How is severance and termination pay calculated?
As per section 21(1)(b) of the WEPP Act, trustees and receivers shall determine the amount of eligible wages owing to each worker. For bankruptcies and receiverships that have taken place on or after January 27, 2009, severance and termination pay are included in the definition of eligible wages. Applicable provincial/federal labour standards legislation governs the minimum amount of termination and severance pay which is due to the employee. Severance pay entitlement may also be set out in employment contracts or collective agreements. Trustees and receivers are encouraged to consult with federal, provincial or territorial labour employment standards authorities, the employee, the union or other relevant partners to make a correct assessment.
