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Severance Packages ON

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  • Feb 6th, 2018 7:51 pm
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Newbie
Jan 30, 2018
2 posts

Severance Packages ON

Hi everyone.
I work for an American software company with a small office in Ontario. The company is very profitable and has about 1500 employees WW but in ON only 10 or so.
I'm a Sr Account Manager, in my late 40s, and have been working for this company for 14 years. My salary is comprised by a base salary + commissions (25% base, 75% commissions approx - last 3 years)
I'm covering 2 territories, Canada and LatAm and the solutions we sell are very sophisticated (enterprise solutions for IBM specific platforms - e.g. mainframes).
Due to some restructuring, the situation at this company is changing very quickly and a lot of colleagues were let go lately.
I'd like to understand based on these facts, how much I would be entitled to, in case my job is terminated without cause.
I have the impression I may be entilted to one month every one year of service... but a month of what? base salary or base + average commission?
Any information you can provide or share will be greatly appreciated.
Thanks.
Last edited by sonnyRoll on Jan 31st, 2018 5:39 pm, edited 1 time in total.
11 replies
Member
Feb 8, 2017
459 posts
261 upvotes
check the Ontario ESA website for the MINIMUMs you are entitled to and then go from there. sounds like you need legal advice
Deal Addict
Oct 16, 2013
2409 posts
765 upvotes
New Brunswick
First, what does your contract says? Are you part of a layoff?

Min is 1 week/ year of service, but civil cases/ courts will give more base of different factors. I suggest taking a sick day and use the free consults that lawyers offer. Get more than one opinion.
Deal Expert
Oct 6, 2005
16872 posts
2557 upvotes
Ask the company to pay for the legal consult ... they often will because it prevents issues in the future where the person said they were "forced" to sign the package uninformed. 1 hour consult is about $400 - $500.
Newbie
Mar 19, 2017
4 posts
6 upvotes
I was in a very similar situation 2 years ago. I worked as an executive in a private company and had an amazing employment record. I will save you all of the details but the company was looking to cut salary to make itself more attractive to sell. I was brought into an office and offered 6 months severance. I knew it was a low ball and like you felt it was coming so I was prepared. I didn't discuss anything in the moment, went home and relaxed.

I called the company back in the morning, spoke with their lawyer and said I will take 1 year + and an additional month for vacation allowance - so 13 months total severance. The lawyer I spoke with ahead of time, whom I didn't even obtain but was well respected in this space said it was a slam dunk in court that I would 12-15 months, but it would take time and cost money so I would net out less money.

I didn't want the hassle of going to court so I offered 13 months, they accepted, I moved on and started my own business with the money and couldn't be happier.

I did opt to take the money over a 13 month period because the company was stable so it worked out to a set salary for 13 months with no claw back in the agreement if I did get another job. If it matters my salary was 150K plus a small bonus.
Deal Fanatic
Jul 4, 2004
7430 posts
4677 upvotes
Ottawa
I believe, by law, the minimum is 1 week per year worked but you can often negotiate for more. It's not uncommon to hear you should get 1 month for every year worked and many people will use that as a bar but I tend to think that this is actually not that common. It also has to be a reasonable amount of time for you to find something similar which likely works in your favor. Unfortunately, being an American company hurts you as severance is typically much less in the US (I used to work for a large US multinational and one of my coworkers was let go after 26 years of professional (white collar) type work and received 3 months severance ...). They are much more likely to pay the minimum and that's all since it's probably much more than they'd pay to a similar employee in the US.

In your place, I would see what they offer me but I'd probably consult a lawyer.

Best of luck.
Deal Addict
Jan 1, 2017
1826 posts
1876 upvotes
michelb wrote: I believe, by law, the minimum is 1 week per year worked but you can often negotiate for more. It's not uncommon to hear you should get 1 month for every year worked and many people will use that as a bar but I tend to think that this is actually not that common. It also has to be a reasonable amount of time for you to find something similar which likely works in your favor. Unfortunately, being an American company hurts you as severance is typically much less in the US (I used to work for a large US multinational and one of my coworkers was let go after 26 years of professional (white collar) type work and received 3 months severance ...). They are much more likely to pay the minimum and that's all since it's probably much more than they'd pay to a similar employee in the US.

In your place, I would see what they offer me but I'd probably consult a lawyer.

Best of luck.
As long as they have a Canadian office they have to abide by the Canadian employment laws.
Deal Addict
Apr 21, 2014
2321 posts
1106 upvotes
Alberta
ProductGuy wrote: As long as they have a Canadian office they have to abide by the Canadian employment laws.
Yes but there are two types of law statute law and common law based on court decisions. The statute is the minimum the common law is what is referenced as to what you will likely get.


Nobody answered the OP’s question regarding commission. His base salary is quite low compared to the commission. My guess is they should take an average of your gross income over the last few years but I don’t know.
Newbie
Jan 30, 2018
2 posts
They have a Canadian office (an Ontario Corp).
The other issue I see is thet we are just a bunch of employees here and I doubt the payroll is over 2.5M.
Also... all the sales I make as an employee of the Canadian corporation are invoiced by the US Corporation.... I work here but the revenue goes there.
Deal Expert
User avatar
Aug 6, 2001
17811 posts
5762 upvotes
Stuck in a Box
sonnyRoll wrote: They have a Canadian office (an Ontario Corp).
The other issue I see is thet we are just a bunch of employees here and I doubt the payroll is over 2.5M.
Also... all the sales I make as an employee of the Canadian corporation are invoiced by the US Corporation.... I work here but the revenue goes there.
I can recommend a lawyer. It's about framing the ask. Canadian courts favor the employees over the corp for the most part.

Do not sign anything till you have had a proper consult. Good lawyers can also get their fees from the company.
Deal Addict
Sep 2, 2010
1775 posts
823 upvotes
Bummer's Roost
ProductGuy wrote: As long as they have a Canadian office they have to abide by the Canadian employment laws.
I think the 1 week per year factor only works up until 8 years approx. So 8 weeks severance.
If the company is down to hardly any employees you should also consider the possibility that they will just close the office, and if set up in a certain way you'll only have recourse with a closed Canadian business, instead of the US company.

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