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Severance Pay and Employment Insurance (Ei): Can I Get Both after Losing My Job?

Oracle Legal Services > Blog  > Severance Pay and Employment Insurance (Ei): Can I Get Both after Losing My Job?

Severance Pay and Employment Insurance (Ei): Can I Get Both after Losing My Job?

Severance Pay And Employment Insurance

The first question before asking if you qualify for both is how were you terminated by your employer. Is it termination with cause due to willful misconduct, or is it dismissal without cause due to company restructuring, cost cutting, lack of work, or poor work performance? Employment law and matters involving severance pay can be a tricky field to maneuver, but we here at Oracle Legal Services want to help.

WITHOUT CAUSE

It is important to note the kind of termination because it also answers the next question. Can I obtain Employment Insurance (EI) benefits and severance pay if I’m being let go without cause? The clear answer is YES. Without cause termination usually entitles you for EI benefits because it was made for that specific purpose: to help workers who were terminated and for them to have accessible income in between job search.

But what about severance pay? You are entitled to a severance pay depending on your employment contract. Your employment agreement will either follow the minimum provision set up under the Employment Standards Act (ESA) or it follows a severance clause under the employer written contract during your job offer. 

WITH CAUSE

On the other hand, if you are an employee who got terminated with cause either through willful misconduct, fraud, or disclosure of confidential matters, etc. just for these reasons alone will not guarantee you severance package even EI benefits. If you were dismissed due to these grounds, your employer is not obligated to provide a notice of termination, and surely your employment contract will include a clause discouraging these types of behavior in the workplace as it does not include a severance package.

As for EI benefits, employees terminated with cause disqualifies them for obtaining EI. However, the employee will have the opportunity to dispute this through Service Canada, but even that constitutes an investigation which will include the Employer. Furthermore, if that still does not work in favor of the dismissed employee the last resort for EI benefits will have to go through a “Request for Reconsideration” which lengthens the process further.

CAN I GET BOTH AFTER LOSING MY JOB?

The simple answer is you can BUT not at the same time.

The general rule is, upon termination an employee who receives a severance pay from his/her employer cannot receive EI benefits. However, once your severance pay is fully exhausted, your EI benefits can then kick in. The concept behind this is both EI and severance pay justifies the same function after termination and that is to help with the financial situation of an individual in between work gaps. Therefore, an individual in general cannot double dip and have both at the same time as EI and severance serves the same purpose.

To learn more about our Toronto employment law services, you can call us for a FREE 30 minute phone consultation at (647) 872-3484 or submit a request on this website.