The Art of Calculating Severance Pay
As discussed below, there is no simple formula that can be used to calculate severance according to the common law. Instead, Judges will assess a number of key factors, giving each factor its due weight based on the specifics of each case.
While this means that it is impossible to know in advance exactly how much common law severance an employee is entitled to, it also means that we can use previous decisions (case law - the more similar the case to your particular situation the better) to determine a likely range of outcomes.
So how do you use case law to calculate severance?
Severance pay calculator?
Can I use an online severance calculator to find out how much severance I am owed?
Online severance calculators, especially free ones where you enter a few key pieces of information, will not account for many important characteristics of your previous employment and your future employment prospects. They can be useful in helping you determine if your employer’s severance or termination package is broadly within the realm of what is reasonable but will rarely provide you with case law similar enough to your circumstances to serve as support in negotiating a higher severance package.
How to calculate severance pay like a lawyer.
There is no substitute for conducting legal research. Judges across Canada will determine reasonable notice periods based upon an analysis of how the Bardal factors apply to each particular case. (Wages earned over the notice period are colloquially referred to as severance. For an introduction to both reasonable notice periods and the Bardal factors, click here.) In conducting legal research, the goal is to find cases with characteristics as similar as possible to the matter at hand.
Though lawyers often use paid research tools and products to help them work more efficiently, all Canadians have access to the fundamental tools they need to conduct their own legal research through CanLII, the Canadian Legal Information Institute (click here to learn more about CanLII).
The basic research process entails identifying the Bardal factors in the matter at hand, conducting numerous searches for cases with similar characteristics, reviewing the cases found through searches to ensure they are applicable (for example, a case similar to the matter at hand may have an employment agreement with significantly different terms, rendering the case irrelevant), and compiling a list of awarded notice periods (i.e. severance awards).
In addition to being able to find cases with characteristics more closely resembling the matter at hand, conducting legal research has the added benefit of allowing you to review the commentary of Judges, which can help you better understand how the relevant legal principles apply to your specific matter.
Though we always recommend speaking to an employment lawyer to ensure you have not missed anything critical in your analysis, we recognize, and it is our experience, that many British Columbians with claims for small sums, often stemming from very short employment terms, decide to represent themselves in negotiating with their employers. It is our hope that the information provided here will be of some assistance in helping British Columbians better understand their severance entitlements.
Resources:
(click on links below)
Our team has years of experience calculating severance along with access to the best tools available in Canada to help us sift through large volumes of case law. This combination of experience and technology allows us to provide you with timely severance reviews and estimates that you can rely on.