Laid off? Protect your severance package

With my former employer in bankruptcy, I chose the lump-sum for the reasons listed above. I am 58, was with the company for 29 years, and was in the pension plan (defined benefit) for 28. I "lost" 10% of the lump-sum pkg as the company wasnt fully paid up on its part of the pension fund.
I learned a lot going through this process, wishing I had known some of this sooner. At my age, and eligible to take an instant but reduced pension, I almost did this. Luckily my accountant made sure I didnt, for the following reasons:
1. Take the 10% loss and get your cash. As mentioned above, you could lose a lot more.
2. The pension at 58 was almost liveable, but would never change. The sum remains the same for your lifetime. No inflation-protection.
3. The biggest "surprise" to me was that even if I opted for a guaranteed 15 year pension,( ensuring income for my spouse), it would reduce the yearly pension amount received . This became a sore point with me because calculating a modest (at the time) interest rate of 4.5 % (4yr bond rate), there would still be almost 60% of the original sum remaining, and that this sum would be RETURNED TO THE COMPANY fund, NOT to my estate.
By taking the lump-sum, one is far more in control of ALL of the monies. I can change the yearly withdrawal as I see fit, the remaining monies go to estate if I die, and I have the potential to increase my income from this lump-sum if interest rates increase.
I saw NO advantage in my situation for taking the yearly payout. I could live to almost 90 before that fund ran its course, and that is at a 4.5% interest rate. I am not happy to be out of work, but I am happy to be in control of my finances. My advice? See both an accountant and a financial planner before doing anything at all, and a lawyer if the company tries to "persuade" you one way or the other when you get that pink slip.

So; I have been with the same company for 12 years. I have worked from bottom to top and now earn in excess of 100K/year. I know I will be laid off in the next month or maybe two. I have been in my current position for 2-1/2 years. What kind of severence can I expect?

Not quite true, that 5yrs with same employer. I worked 14 yrs with Ont. Hydro construction & no severance.

Be weary of what my company did....permanently laid off, first, those who were quickly approaching the 'five-year anniversary' mark, to avoid severance. Then did a temporary lay-off for all other workers (35 weeks), there's no way I can go 35 weeks living on EI Benefits - I'll be forced to find other work and resign my job (as a senior manager), thereby freeing them of the severance laws. Sneaky eh?

TED -- According to the usual guidelines, 25K at the low end, perhaps 35k at the high end. Check with a good enployment lawyer though, particularly if you have some time to consider your options.

For the many reasons mentioned by the other commentators, I became an NDP voter. For all of my life, I was a Liberal. Rain or shine, I voted Liberal. Never again. The liberals and the conservatives have allowed so many hurtful/painful/immoral actions by companies to go forward that it is hard to count them. Even in a court of law you cannot find justice because the laws are stacked against you. I believe that the huge corporations should not be given the backdoor clause to escape their responsibilities towards their workforce and that the pension monies should never be part of a bankruptcy. Once the money is in a pension fund it must remain free from other uses. This includes the severance packages. At what point is a company a responsible part of a democratic society ?

TED - If you reside in ontario and have been with the company for 12+ years you will likely be entitled to 4 weeks for every year of service for severance and should be based on your latest salary. I'm going thru the exact same thing right now - almost 13 years and the lawyer is asking for 4 weeks/yr. If they do not offer you something close to this it will be in your best interest to see a good employment law lawyer. There is the employment standards act and then there is something called 'common law' (that is more generous), which most are not aware of.

I am 65 years old was laid off last year in a mutal agreement with my company. A small company which ran out of work for my department. I worked for this company for 44 years.
Question: Is there a law in the books (Quebec) which says they HAVE to pay me a certain amount of money for my years of service? It doesn't look like I will get anything. Thanks

William ..... Common law principles are not applicable in the province of Quebec. As a civil law jurisdiction, employers' obligations in Quebec are contained in the Civil Code of Quebec which does provide that an employee can claim reasonable notice (or compensation in lieu thereof) of the termination of his or her employment, similar to those of employees in the other common law provinces.

Talk to an employment lawyer.

I do not understand whty the government does not help the people who take early retirement or lose there jobs. We are sent down the river without a paddle. Would you not think if would help the average Joe who maybe lucky to get a buyout or severance package to put the whole thing down on a mortage instead of a RRSP. Then you are screwed because you can not collect E I.

I believe that a company should be held responsible to compensate an employee for their years of service in the form of a severance package, and that the E.I. laws need to be modified to allow a worker to claim E.I. with no consideration given to the severance package. That money should never prevent a worker from claiming E.I.
26 weeks pay is not much when one considers that a person would had to have worked for 26 years for the same company to receive this little amount, anyone who worked less than 26 years, would find even a lessor severance pay out. Then, a double wammie, when that same person finds that they must wait out a penalty to get anything at all from E.I. .
It is not any small task, considering the current workforce situation for anyone to relocate themselves into a new job. Many of the workers being forced to leave their jobs have worked for several years and never collected E.I. It's time we gave a little more respect to the working man.

Last year July 1st 2008 the company that I had work for over 20 years filled for Chapter 11 bankruptcy.I and more than 1000 plus co- workers was throw out on the street withou any financial support at all......not even a penny eventhough as by law we suppose to receive some kinds of severances or termination pay. This company had sell almost 300 to 450 millions dollars per year for the last 8 year.
We,as a good citizenships of the beatiful country called Canada, went for help by asking The Federal and Prvincial Ministers of Labours plus other Ministers to interfer help us to receive what we entilte for...
THE RESPONDS WERE ALL THE SAME " SORRY,BUT NOTHING WE CAN DO FOR YOU "
Today mark the one year annivesery still we never hear or receive any apology at all .

In January, 2005 I was put on "temporary" layoff by my Quebec-based employer, where I had worked for 36 years. In July of that year the layoff became permanent and I was offered a severance package consisting of 8 weeks pay in lieu of notice and 18 weeks severance.

The company had laid off a number of employees the previous year and their severance packages ranged up to 1 full year for persons with 20 years service. Naturally, I felt I deserved at least as much as the people who were laid off prior to myself. I refused the settlement. The company dug in its heels and refused to sweeten the pot, so I sought legal recourse.

Nothing happened for the longest time and last year the company filed for bankruptcy. I am now an unsecured creditor in ongoing litigation and my legal fees will probably exceed whatever settlement (if any) that I might get.

I feel that if this case could have gotten to court more rapidly (i.e. before the company filed for bankruptcy) I would at least have had the opportunity to accept the original offer under protest. Living proof that justice delayed is justice denied.

While it sucks to get laid off, to be forced to quit your job of 10 years, due to work place harassment, and then having your employer lie to you about a job within your plant that you are legally entitled to do, that would have takin you away from the harassment,also your union not willing to help you (one of thier members) and then having your employer say you quit, we did not force you to quit.My severance was I had to apply to my Provincial Goverment to withdraw my pension to live on.I would love to have been able to get severence, but i am one of the few Canadian workers with out rights in the work place.Due to the fight that I had to go through I could not work, my wife and I had to leave our small town to move into a near by city, after foreclosure. Now we are facing the possibilty of bankruptcy. Its a good thing that some people have decent employers that offer severance even in the face of financial difficulties.

With all of the different circumstances outlined above, is it not obvious that there should be some kiind of common structure to be followed? Even large companies offer their employees less than they are entitled to, in the hopes that the employees will sign off. An article in the Ottawa Business Journal by Dave Moffat states that employees in each of the following levels should expect to receive (in Canada) the following number of weeks for each year of service:

Top Executives - 4.66
Senior Executives - 4.46
Department Heads/Managers - 3.36
Professional/Technical - 2.99
All other employees - 2.35

This should be made to be a requirement regardless of any bankruptcy proceedings. It's time the government started protecting non-union employees because no one should be left to the mercy of a company that is allowed to play with the rules. It is a total disgrace and a black eye for our government that an employee who worked for 36 years for a company is left with nothing.

THIS ARTICLE IS BADLY MISLEADING --provincial employment standards legislation sets the MINIMUM that a person is entitled to receive if terminated without cause (and the phrase 'just cause' generally means that the employee has done something bad which justifies his being fired)---over and above the provincially legislated minimum, the common law requires that the dismissed employee be given reasonable notice or $ compensation in place of that notice --THERE IS NO MATEMATICAL FORMULA FOR DETERMINING HOW MUCH A PERSON IS ENTITLED TO RECEIVE AT COMMON LAW!!- it varies depending on such factors as your age, years of service, seniority of your position, prospect of re-employment, Etc --ANY DECENT EMPLOYMENT LAWYER CAN FAIRLY QUICKLY TELL YOU WHETHER YOU SHOULD GET MORE. Unionized employees are usually stuck with what their collective agreement stipulates. IF YOU ARE A LONG-TERM EMPLOYEE WHO IS FIRED THEN YOU ARE CRAZY NOT TO FIRST SEE A LAWYER!!!!

Lots of upset people posting here but has anybody thought about the other side.

I am laying people off but the alternative is 6 months from now having to lay everybody off as we go bankrupt with nobody getting any severence. Trust me if you are getting laid off you likely should have been gone 6 months before but the company took extra time to make sure it was the only option available. Yes you want to make your company pay for firing you but realistically if you are worth what they are paying you then you should find an equivalent job fairly easily and if you weren't then I would look at the time they employed you as a gift as they paid you more than anybody else would have.

Hi John;
Were you refering to my post?