Exclusions From Severance Pay

This article was last updated on April 16, 2022

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What is the Employment Standards Act?
The Employment Standards Act is the law that contains basic rules about employing people and working. Both employees and employers have rights and
responsibilities under the Act.
Does the Act cover all employees in Ontario?
Most employees are covered by the provincial legislation. However, employees working in industries that fall under Federal jurisdiction, such as, Post office, Banks, Railways, Radio stations, Airlines, Television stations etc. are not covered. 
If you are member of the trade union and your contract of employment is governed by the collective agreement, you may not be covered by the Act.
If you are currently employed with the company, you may be able to file a claim with a request that your name not be disclosed. The Act protects you when you are exercising your rights under it.
An employee who refuses an offer of reasonable alternate employment from the employer.
The issue of “reasonableness” depends on whether a reasonable employee in the same circumstances would consider the change reasonable.
An employee who refuses to exercise seniority rights to obtain reasonable alternative employment.
The refusal of alternate work under a seniority system can include a seniority system set up by a collective agreement or one that exists without a collective agreement.
When there is no collective agreement, the employer must show that the seniority system was formalized and was not merely ad hoc.
An employee who has been guilty of wilful misconduct or disobedience or wilful neglect of duty that was not trivial and not condoned by the employer.
To utilize this exemption, the onus is on the employer to prove that the evidence supports this exemption.
Wilfulness. The actions or omissions must have been wilful on the part of the employee. The employer must show wilfulness-whether it’s alleging misconduct, disobedience neglect of duty.
Normally, “wilful” means that the employee intended the result that happened. Poor workmanship or accidental or involuntary conduct is not usually considered wilful. However, the employee who behaves recklessly may be guilty of wilful misconduct because he or she ought to have known that his or her conduct would cause the result that happened.     
Misconduct. The following list is illustrative only; it is not exhaustive:
.           Fraud, theft etc.
.           Alcohol or drug abuse (employee is under the influence of alcohol during working
            hours. If the employee’s drinking is due to alcoholism, the employee’s behaviour
            is due to recognized illness and is not wilful)
.           Failure to follow company policy.
.           Recklessness
.           Conflict of interest
Wilful Neglect of Duty. This exemption focuses on the failure to do something rather than doing something.
Disobedience. Although the word “wilful” does not appear before the term “disobedience” in the exemption, it is implied that the disobedience involves an element of wilfulness.
Condonation. It implies that the employee alleged employee’s behaviour was not condoned by the employer.   
Employees who are not regular employees are not entitled to severance pay. These include casual or “elect to work or not” employees.
“Elect to work or not” are employees who can refuse to work when offered and still are given work in future when required.
An employee who retires with a full pension is not entitled receive severance pay.    
If you or the employer disagrees with the investigating officer’s decision, both parties have a right to appeal to Ontario Labour Relations Board within 30 days of the officer’s decision. The Board appoints a referee to hear the appeal. It does not cost the employee to request an appeal but the employer may be required to deposit monies in trust with the Ministry of Labour if it is found to be owing. The referee decision is final and binding on both parties.    
In the past, the Ministry was very aggressive in defending the rights of an employee and would send a legal counsel to represent the employee at the Board’s hearing to deal with the matter. It rarely does so now. Obviously, the employer has advantage over the employee in these circumstances. The question arises, should the employee also engage the services of a professional. It is my view, employee’s may not engage such services at the officer’s level hearing but may do so at the referee level hearing, particularly, if the issues are complex.
It is important that if a hearing has been scheduled, the employee must attend such a hearing to present evidence to support its position or to contest the evidence of the employer, otherwise, the officer or the referee may rely on the evidence of the employer to render a decision.   
This information is provided for guidance only and should not be considered as a legal advice.

This article is provided by Rajinder K. Batra, who is a retired Employment Standards Officer with the Ministry of Labour with 15 years experience in these matters.

If you have any questions regarding your employment, please contact the writer by e-mail at esaconsulting@hotmail.com

If you don’t have access to e-mail; you can fax your question at (905) 331-1805.

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