Calculating compensation in labour and employment law cases
Question: I have been let go, and I would like to know how my compensation will be calculated for severance purposes.
Answer: In general, the lawyers involved in your case will look at all sources of compensation that you, as the worker, are entitled to at the time of termination/separation.
Workers are not limited to claiming a loss of salary or wages alone when calculating severance. In fact, the law is meant to provide workers with a cushion with respect to all losses of compensation and benefits associated with a termination without notice.
In this regard, it is necessary to tally up all sources of compensation and benefits that would have arguably been earned had you, as the worker, received ample forewarning/notice of the termination.
There are a number of tools we use to deal with the complexities. For instance, if your wages, salary, commissions and/or bonuses are inconsistent, we will use historical averages if appropriate.
In other cases, we will use a forward-looking approach if it is more appropriate; for instance, if you would have been on pace to earn significantly more in future months ahead.
If benefits are not being continued for a reasonable period of time, calculating their approximate cash value will often be necessary as well.
To estimate the value of benefits, there are a several approaches lawyers use, including one method which is to look at the actual or estimated monthly cost of the benefits to the employer, and the related savings that the employer will save by virtue of the termination without notice.
This article was originally published by The Hamilton Spectator.
