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Topics Covered: <a href='/resources/search/?query=Sales Management'>Sales Management</a>
Talent & Recruitment
Jan 3, 2018 | Canadian Professional Sales Association lock

While sales is a rewarding career, like many other high pressure professions, there is a high turnover rate. If you find yourself in the less than optimal position of losing your sales job, perhaps due to company restructuring or territory changes, the question of whether you will be entitled to severance pay will arise and is often complex. Read on to find out your legal rights in Canada.

The first thing to understand is that Severance Pay is what your employer pays you when you lose your job through no fault of your own. An employer is within their rights to dismiss an employee from employment without notice and without severance where it has “cause” in law to do so. Such “cause” covers serious misconduct such as stealing or misappropriating assets but also includes less extreme situations. For example, repeatedly failing to meet an employer’s established standards in such areas as attitude, attendance or job performance problems. But in this case, the burden in on your employer to prove that you have been repeatedly given warning that your conduct is unsatisfactory, that your position in the company is in jeopardy and you have been given reasonable opportunity to improve before your position was terminated.

In the case that your sales position is terminated and you are not at fault. While the federal, provincial and territorial governments do make regulations about severance pay, the amount of severance is based on a number of factors and can vary widely. One common misconception is that severance is based on length of service. In fact, this is only one of many factors; there have been cases where an employee who worked for only two weeks received 12 months severance and others where employees working for over 20 years received less than 12 months. The Employment Standards Act differs from province to province but generally awards one week per year of service up to eight weeks. Check your rights by province but understand that this is just a baseline. If taken to court, the amount of severance awarded can range from 2 to 30 months depending on the circumstances.

How Much Severance You’ll Receive Depends on the Following:

  • Regulations in your province or territory
  • If you are part of a union, your union’s collective agreement
  • Your employment contract
  • How long you worked for your employer
  • Why you lost your job

What to Do If Your Sales Position is Terminated And You Are Not at Fault

  1. Much about severance pay depends on the terms of your employment, so the first step is to review your offer letter or employee handbook which should include information about dismissal and to what you are entitled.
  2. Read the severance agreement provided by your company carefully. Pay close attention to severance figure as well as the amount listed in your pension. If severance benefits are provided, make sure you understand how long they will last and what, if any, fees or premiums you need to pay. If you have any questions or concerns, consult a lawyer before you sign.
  3. Make sure you understand your legal rights by province and the circumstances by which you are being dismissed.
  4. Consider your opportunities for alternative employment. If you take your case to court, it’s likely that they will consider how easy it will be for you to find another job when calculating your severance. They may take into account your age, the number of jobs in your field and the status of your position.
  5. Consider how your severance will be paid. Some employers will let you choose between lump sum, salary continuance or deferred payments. If you do get a choice, think carefully. You will have to pay income tax on your severance pay and this amount may be less if you take a salary continuance rather than a lump sum. How you receive your severance may also affect EI payments

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