Toronto employment lawyer Andrew Monkhouse explains how Employment Insurance (EI) and severance pay interact after a termination. Learn when EI benefits begin, how severance affects EI payments, and why employees may still have a claim for additional compensation.
Does Employment Insurance Replace Severance Pay?
If you are let go from your job, Employment Insurance (EI) and severance pay work together to provide income support while you search for new employment. It is not a matter of receiving one or the other.
In most cases, employees should first receive severance pay from their employer. Once the severance period ends, EI benefits may become available, depending on the individual’s circumstances and eligibility.
How Severance Pay Affects EI Benefits
Consider the example of an employee with 12 years of service who is entitled to a 12-month reasonable notice period. During that period, the employee may receive compensation equivalent to their regular earnings through a severance package.
After the severance period ends, the employee may qualify for EI benefits for an additional period, subject to eligibility requirements and the rules in their province or region.
Because EI benefits are generally lower than regular employment income, employees should ensure they understand their full severance entitlements before accepting a package from their employer.
Should You Pursue Severance If You Receive EI?
Yes. Receiving EI benefits does not prevent you from pursuing severance pay from your former employer.
Severance compensation and EI benefits are designed to work together. In many cases, severance entitlements are significantly greater than the amount available through EI.
If you have been dismissed without cause, it is important to review your severance package before signing any agreement or release.
Speak With a Toronto Employment Lawyer
Navigating workplace issues can be challenging. At Monkhouse Law Employment Lawyers, we provide clear, practical legal advice to help employees understand their rights and options.
Call 416-907-9249 or complete the form below to schedule a free 30 minute phone consultation.
This information is provided for general educational purposes only and does not constitute legal advice. Eligibility for EI benefits and entitlement to severance pay depend on the specific facts of each case.