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need advice for severance package ontario

  • Last Updated:
  • Apr 12th, 2021 8:26 pm
[OP]
Newbie
Sep 7, 2020
14 posts
1 upvote

need advice for severance package ontario

Hi,

today I got layoff from a company that I worked for 4 yrs.

Q1). should I go for salary or lump
sum payment for ?
Q2). how can the company know if I find another job?
Q3)can I ask for extending the benefit coverage?
Q4). how does the company come up the vacation pay? I have around 25 days of vacations left.
Q5) what else should I ask for?


Termination Settlement Offer
1. CompanyX will continue your base salary of $xxx per week (less statutory, pension and applicable benefit deductions) for a 19.50 week period from April 8, 2021 up to and including August 2x, 2021 or until the date you obtain alternate employment or become self-employed, whichever is earlier (the “Salary Continuation Period”). This payment is inclusive of any contractual or statutory entitlement to termination and severance pay (as applicable). If you obtain alternate employment or become self-employed before August 2x, 2021, all salary continuation payments will cease immediately, and Companyx will pay you a lump sum payment (less applicable statutory, pension and benefit deductions) equal to 50% of the balance of any outstanding salary continuance payments to August 2x, 2021. 


2. CompanyX will maintain your existing group benefit coverage to May 5, 2021, following which your group benefit coverage and the Health Care Spending Account (but excluding long-term disability coverage, out-of-country coverage, basic life insurance, supplemental and dependent life insurance coverage) will continue until the end of the Salary Continuation Period.

Vacation Pay
Irrespective of whether you accept the above settlement offer, you will receive a lump sum payment of $xxx (less statutory deductions) representing your vacation pay for accrued and unused vacation days up to the end of the statutory notice period. This payment will be made on the next payroll deposit following the Termination Date.
Last edited by newbies1234 on Apr 8th, 2021 7:33 am, edited 3 times in total.
12 replies
Deal Expert
Aug 22, 2011
35724 posts
21807 upvotes
Center of Universe
IMO, that's a very generous package.
Health benefits are commonly extended for 3 months.
I recommend to take the payment in full and you do not have to report back to them when you find a new job.
Deal Expert
User avatar
Feb 8, 2014
21152 posts
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newbies1234 wrote: Hi,

today I got layoff from a company that I worked for 4 yrs.

Q1). should I go for salary or lump sum payment for ?
Q2). how can the company know if I find another job?
Q3)can I ask for extending the benefit coverage?
Q4). how does the company come up the vacation pay? I have around 25 days of vacations left.
Q5) what else should I ask for?


Termination Settlement Offer
1. CompanyX will continue your base salary of $xxx per week (less statutory, pension and applicable benefit deductions) for a 19.50 week period from April 8, 2021 up to and including August 21, 2021 or until the date you obtain alternate employment or become self-employed, whichever is earlier (the “Salary Continuation Period”). This payment is inclusive of any contractual or statutory entitlement to termination and severance pay (as applicable). If you obtain alternate employment or become self-employed before August 21, 2021, all salary continuation payments will cease immediately, and Ontario Teachers’ will pay you a lump sum payment (less applicable statutory, pension and benefit deductions) equal to 50% of the balance of any outstanding salary continuance payments to August 21, 2021. 


2. CompanyX will maintain your existing group benefit coverage to May 5, 2021, following which your group benefit coverage and the Health Care Spending Account (but excluding long-term disability coverage, out-of-country coverage, basic life insurance, supplemental and dependent life insurance coverage) will continue until the end of the Salary Continuation Period.

Vacation Pay
Irrespective of whether you accept the above settlement offer, you will receive a lump sum payment of $xxx (less statutory deductions) representing your vacation pay for accrued and unused vacation days up to the end of the statutory notice period. This payment will be made on the next payroll deposit following the Termination Date.
I'm going to guess that the Teachers contract is already negotiated and rather rigid. That said:

Q1). should I go for salary or lump sum payment for ?
If the amount is the same in theory it does not matter. However if you live paycheck to paycheck and increase your spending when your income increases then a lump sum will be gone before the regular pay period deposits would be. If you are able to reduce your spending from where it is now then take the lump sum. Don't fool yourself, if you are not the type to live below your means then don't screw yourself by taking the lump sum.
That said if you are going to find employment quickly and don't have to pay any excess back then a lump sum may make sense. Figure out how this works if you take the lump sum.

Q2). how can the company know if I find another job?

In many ways its the honour system but they may have other ways of getting access to your employment information. They may also require you to show them your tax slips next year as part of your final agreement.
Don't play games, the last thing you need is a court case or mandatory arbitration where you have committed fraud.
If you get a new job however you can try to push forward the start date which keeps you in compliance with this requirement.
And if you start teaching in the fall then your fine.

Q3)can I ask for extending the benefit coverage?
Of course you can ask. Whether or not you will get it is above my pay grade.

Q4). how does the company come up the vacation pay? I have around 25 days of vacations left.
You will have to ask them.

Q5) what else should I ask for?
This one i can't help much with.

Do consider getting some professional help in navigating this, i have no idea what it might cost but many professionals will do a free consult to evaluate your situation and will explain their rates. It never hurts to have a professional negotiator on your side since they will have professional negotiators on theirs.
In fact in Rand McNally they wear hats on their feet and hamburgers eat people
Deal Addict
Feb 4, 2010
4877 posts
3769 upvotes
First off, sorry you got laid off. Second, I disagree that this is a generous package...it's not bad, but it's not great either.
Q1) if you need benefits during this time then salary continuance would be better or if you're not good with money might spend it all if you get a lump sum
Q2) get this clause removed - not sure if it's worthwhile for you to get a lawyer or paralegal to negotiate this and your benefits on your behalf
Q3) generally with SC you should be have access to your benefits during this time - you need to negotiate that you want benefits covered until end of SC
Q4) not sure I understand your Q - they'll pay you for 25 days based on your salary.
Q5) they'll provide good references?
Deal Fanatic
User avatar
Jan 31, 2006
7295 posts
1881 upvotes
Toronto
newbies1234 wrote: Hi,

today I got layoff from a company that I worked for 4 yrs.

Q1). should I go for salary or lump
sum payment for ?
Q2). how can the company know if I find another job?
Q3)can I ask for extending the benefit coverage?
Q4). how does the company come up the vacation pay? I have around 25 days of vacations left.
Q5) what else should I ask for?
Q1: Lump sum is better.
Q2: Chance is slim to none.
Q3: Benefit coverage is company discretion, some company terminate the benefit as soon as you are terminated, some company give you extra months (e.g 3 or 6 months)
Q4: Is your 25 days accrued already or includes the full year (some company allows you to carry over your vacation from last year) + number of vacation entitlement this year?
Deal Addict
Mar 10, 2011
2322 posts
442 upvotes
Toronto
newbies1234 wrote: Why lump sum is better?
In theory, if the lump sum equals the amount of salary you make in the case of the full period of salary continuance, then lump sum might be better since you wont have to report that you got a job and would not have to give up any dollars.
However many companies like to use lump sum because they discount it versus paying full salary continuance, so it saves them money.

Your offer description above does not mention a choice of lump sum( except in the case of you getting a job before salary continuance runs out) they’ll pay you half of what you would have got vs your salary continuance running its full course. You are planning to ask them for lump sum although their initial offer is only for salary continuance, right?

Honestly you don't have a lot of time to search for a job as you were only employed for 4 years at the employer and your severance is based on this short period. Do you have a job lined up or are jobs in your industry easy to come by in a short time?
[OP]
Newbie
Sep 7, 2020
14 posts
1 upvote
My understandings of #1 are
1) the company would continue paying me as a regular full time employee until aug 2021 . For example, my monthly pay is $2k. From now to aug would be $2k x 4 = $8k. Assuming that I do not have another job during that period.
2) if I found a job in June, they would only pay me $2k *2 =$4k
3) if I go for lump sum , they would only pay me $8k/2 =$4k

This is how I interpret.
Deal Expert
User avatar
Feb 8, 2014
21152 posts
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Socially Distanced
newbies1234 wrote: My understandings of #1 are
1) the company would continue paying me as a regular full time employee until aug 2021 . For example, my monthly pay is $2k. From now to aug would be $2k x 4 = $8k. Assuming that I do not have another job during that period.
2) if I found a job in June, they would only pay me $2k *2 =$4k
3) if I go for lump sum , they would only pay me $8k/2 =$4k

This is how I interpret.
You can't run on interpretation, you need to determine the facts.
In fact in Rand McNally they wear hats on their feet and hamburgers eat people
Deal Fanatic
User avatar
Jan 31, 2006
7295 posts
1881 upvotes
Toronto
newbies1234 wrote: My understandings of #1 are
1) the company would continue paying me as a regular full time employee until aug 2021 . For example, my monthly pay is $2k. From now to aug would be $2k x 4 = $8k. Assuming that I do not have another job during that period.
2) if I found a job in June, they would only pay me $2k *2 =$4k
3) if I go for lump sum , they would only pay me $8k/2 =$4k

This is how I interpret.
The reason they choose continues pay is because they can stop paying you once you found a job ( chance is slim), than hiring a lawyer/ collection agency to collect the lump sum part.
Deal Expert
User avatar
Dec 23, 2003
15469 posts
3765 upvotes
Toronto
that is pretty generous as most give you 4 weeks per year which is 16 weeks.

to answer your questions:

Q1). should I go for salary or lump sum payment for ?

SALARY as you get more $$

Q2). how can the company know if I find another job?

Don't tell them, keep your mouth shut and don't announce it on Linkedin or anywhere else

Q3)can I ask for extending the benefit coverage?

You can always ask to get it extended till the end of the payments

Q4). how does the company come up the vacation pay? I have around 25 days of vacations left.

It is calculated based on prescribed rates less taxes. You can check the formula online I believe.

Q5) what else should I ask for?

Ask for a letter of reference as it is obvious you were terminated WITHOUT CAUSE or else you would not get any settlement.
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Deal Addict
Dec 27, 2007
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Edmonton
newbies1234 wrote: Hi,

today I got layoff from a company that I worked for 4 yrs.

Q1). should I go for salary or lump
sum payment for ?
Q2). how can the company know if I find another job?
Q3)can I ask for extending the benefit coverage?
Q4). how does the company come up the vacation pay? I have around 25 days of vacations left.
Q5) what else should I ask for?


Termination Settlement Offer
1. CompanyX will continue your base salary of $xxx per week (less statutory, pension and applicable benefit deductions) for a 19.50 week period from April 8, 2021 up to and including August 2x, 2021 or until the date you obtain alternate employment or become self-employed, whichever is earlier (the “Salary Continuation Period”). This payment is inclusive of any contractual or statutory entitlement to termination and severance pay (as applicable). If you obtain alternate employment or become self-employed before August 2x, 2021, all salary continuation payments will cease immediately, and Companyx will pay you a lump sum payment (less applicable statutory, pension and benefit deductions) equal to 50% of the balance of any outstanding salary continuance payments to August 2x, 2021. 


2. CompanyX will maintain your existing group benefit coverage to May 5, 2021, following which your group benefit coverage and the Health Care Spending Account (but excluding long-term disability coverage, out-of-country coverage, basic life insurance, supplemental and dependent life insurance coverage) will continue until the end of the Salary Continuation Period.

Vacation Pay
Irrespective of whether you accept the above settlement offer, you will receive a lump sum payment of $xxx (less statutory deductions) representing your vacation pay for accrued and unused vacation days up to the end of the statutory notice period. This payment will be made on the next payroll deposit following the Termination Date.
Congrats!!!! You are one of the lucky ones.
Not only you get a good vacation. You get a really good severance!
Also on the lump sum vs salary. We need to get real numbers. Also if it's same/nearly same, remember you can invest the money to get some good %
warming up the earth 1 gas fill-up at a time...
You only live once, get a v8
[OP]
Newbie
Sep 7, 2020
14 posts
1 upvote
The lump sum would be the two months of my regular payroll. For example, if my monthly pay check was $2k, I would receive total of $8K if I don't get a job before aug. I would only get $4K for lump sum. if I get a job in July , I would get $4K+$2K = $6K. I just found out that the benefit would continue the end of payroll or I find new employment.

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