Think you’re entitled to severance or some sort of compensation if you suddenly lose your job? Maybe not. There are three fairly common circumstances where an employer has no obligation to provide you with any sort of a severance package when you go.

First, the most common situation is when you voluntarily resigns from your job.  When an employee quits, the employer has no obligation to provide them with a severance package.  In fact, on the contrary, it is typically the obligation of the departing employee to provide fair notice to the employer.  It is common, however, for that notice to be fairly short. Nevertheless, departing employees choosing to resign their employment ought to consider what fair notice to their employer might be. Leaving a former boss in the lurch is not only unprofessional, but it can also hurt your career in the long run.

Second, if your employer has just cause for terminating you, then it has no obligation to provide you with any severance. Of course, in this case, the onus is on the employer to establish just cause for the firing, if you challenge the assertion.  Common examples of just cause for termination include theft, dishonesty, fraud, gross insubordination, conflict of interest or serious incompetence preceded by a number of progressive warnings.

Third, the employment relationship can end, without any obligation on the part of the employer, if the employment relationship itself is frustrated by events which are not the fault of the employer.  For example, if you are incarcerated for an extended period of time, you won’t be able to bring to the employment relationship that which you have promised to do, and thus the relationship itself becomes frustrated by external events.  Similarly, if you are disabled, and the prognosis is that a return to work is unlikely or will take an extended period of time, depending on the circumstances, the employer may be able to treat the employment relationship as having become frustrated.  Again, in these circumstances, while the onus is on the employer to establish proof of the frustration, there will be no obligation to pay you any severance or compensation.


Norman Grosman tackles your employment law dilemmas regularly on Workopolis. More information about him and his legal services can be found on his website