If your employment history includes gaps and you’re wondering whether you’re still entitled to severance pay, you’re not alone. It’s a common question, and the answer depends on a few key factors. Severance pay is meant to help employees financially when they are let go without cause, but the presence of gaps in your employment can complicate things. Let’s break down how employment gaps affect your severance rights and what you need to know.
What is severance pay?
Severance pay is a form of financial support that an employer provides to an employee who is terminated without cause. It helps ease the transition to new employment and is typically calculated based on how long you’ve worked for the company, your position, and any terms outlined in your employment contract. In Canada, employees who have been with a company for a certain period of time are generally entitled to severance pay, but what happens if there are breaks in your employment?
Do gaps in employment affect my severance pay?
The short answer is that gaps in employment don’t automatically disqualify you from receiving severance pay. However, the length and nature of these gaps can affect how your severance is calculated and whether you are entitled to it at all. Let’s go over a few scenarios where gaps in employment might impact your severance rights.
1. Continuous vs. intermittent employment
If your employment with a company has been continuous, meaning you didn’t take long breaks, then you are likely entitled to severance pay. However, if your employment has been intermittent, meaning you’ve had breaks between periods of working for the same employer, the employer may view your relationship as separate periods of employment.
In cases like these, your total length of service, including the time spent away from the company, may be considered when calculating severance. A single gap in employment is less likely to impact your severance, but multiple or long breaks could be a factor in how the employer calculates the length of your service.
2. The length of the employment gap
The length of the gap between your periods of employment can also play a role in your severance pay. If the gap is short and you were re-hired under similar terms, the employer might still consider your entire time working for them, including the gap, when calculating severance.
However, if the gap was long enough that the employer treats your new employment as a fresh start, you might only be entitled to severance for the most recent period of employment. For example, if you worked for the company for five years, then took a two-year break, and then returned, your severance might be based only on the most recent period of work if the employer views it as a new start.
3. Re-hiring and new employment contracts
If you were re-hired after a break, your new employment contract may affect your severance pay. Employers may treat the re-hiring as a fresh start, especially if the gap is substantial. In such cases, the severance entitlement could be based solely on the new employment period rather than considering your total time at the company.
If your break was relatively short or the terms of your re-hiring didn’t change, your employer might still consider your original employment period when calculating severance pay.
4. Employment contracts and severance terms
It’s also important to review your employment contract, if you have one. Many contracts specify terms for severance pay and may address gaps in employment. If your contract includes provisions about severance in the case of breaks or re-hiring, those terms will generally take precedence over the general rules of employment standards.
What should you do if you have gaps in your employment?
If you have gaps in your employment and are concerned about your severance pay, it’s important to take action. First, review your employment contract to understand your rights. If you don’t have a contract, consider speaking with an employment lawyer to help clarify how your specific situation might be affected by employment gaps.
An employment lawyer can help you determine if you’re entitled to severance based on your total length of service, including any breaks, and guide you on the next steps if you believe your severance pay is being undercalculated.
Final thoughts
Gaps in employment don’t automatically disqualify you from severance pay, but they can influence how it is calculated. The key factors are the length of the gap, whether your employment is considered continuous, and the terms outlined in your employment contract. If you’re unsure about your entitlement to severance pay or have concerns about your situation, it’s a good idea to seek legal advice.
At Resolute Legal, we specialize in employment law and are here to help you understand your rights. If you’re facing termination and have questions about severance pay, even with gaps in your employment, we can provide the guidance you need. Contact us today for a consultation, and let us help you get the severance you deserve.
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