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Aged Employees Entitled To Severance

Employees who could retire with a full pension are still entitled to a severance package if they are terminated without cause, says a Fasken Martineau ‘Bulletin.’ When an employee is terminated without cause, the employer must provide the employee with reasonable notice of termination or pay in lieu of reasonable notice. The calculation of the notice period is based on a number of factors including the employee’s age and length of service. Although there is no legal cap on the length of notice periods, generally, notice periods do not exceed 24 months. However, an Ontario Superior Court of Justice decision in ‘Filiatrault v Tri-County Welding Supplies Ltd.’ suggests that with the abolishment of mandatory retirement, employers should expect notice periods to be longer than they were in the past. While in this case the plaintiffs limited their claim to 18 months’ notice, the judge acknowledged that had they not done so, they would have been entitled to larger severance payments given their lengthy 42 years of employment in executive positions. This suggests that notice periods greater than 24 months may no longer be a rarity given the end of mandatory retirement and the likely increased prevalence of older workers with long periods of service.

Courtesy of Benefits and Pensions Monitor website News Alerts 

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