Severance Pay: a crash course
I have been receiving questions about information on severance pay (I use the term in its generic sense rather than the legal one). Rather than reinventing the wheel, I would reference readers to my previous posts about severance pay. Specifically,
If you are a contractor for a business which is insolvent or bankrupt, the unfortunate situation is that generally there are no special provisions helping unpaid contractors as opposed to employees in a similar situation; the assumption being, as a private agreement negotiated between sophisticated parties, the business providing the service would have taken sufficient steps to protect themselves from non-payment (deposits, with-holding work, trade-credit insurance coming to mind) or commence legal proceedings to collect.
The situation most likely affecting many employees recently is constructive dismissal. Constructive dismissal occurs when the employer makes a large change to the employee’s job- whether the roles and responsibilities, hours (for employees not working on call or an as needed basis) or salary (a turn for the worse in working conditions can also be a ground for constructive dismissal). Assuming the employee resigns in protest not soon after such a change, the employee may have grounds for severance. Given the law of constructive dismissal is so complex, qualified legal advice should be sought immediately.
As employee rights differ from jurisdiction to jurisdiction, qualified legal advice should be sought regardless. For those in middle management, employers will sometimes compensate (either in whole or in part) reasonable legal fees in connection with reviewing severance packages. For those in unions or a part of a large layoff, pre-paid legal services or a group hiring a lawyer may be cost-effective ways to go. Many law schools will also offer legal advice through legal aid clinics. Good luck.