Frustration of employment

I got the letter finally… 7 years on LTD and they’re ending my employment Eff Nov 15,2023. I will continue benefits until Nov 2024 but otherwise, I’m getting a severence pkg.

Im interested in how they calculate the amount. Is it based on total years employed, or total years MINUS those on disability?

If it’s total years, they shorted me by double if I’m doing the calculations right for BC.

I need advice. I have never been on a situation like this before

Thank you all

I don’t know the answer. Does your LTD insurer get to deduct your termination pay?

It says all taxes and deductions will be applied

Look at your LTD benefits booklet, is the insurer allowed to deduct severance or termination pay or generally anything paid to you by your employer from your monthly LTD payments?

Do you work for a large entity? The reason I ask is that they have in place an insurance program for employees who may be disable for a long time. And this program may cover them during their disability up to age 65. This would be most LTD insurance. If the employer bought this protection, they had in mind, that this event could happen. If so, it calls into question whether this employment contract can be frustrated to begin with.

It would be beneficial to most of us to keep the benefit package of our employment. On top of that, it is possible your LTD insurer will be the one who benefits from the severance, not you. That is, they may stop paying you your benefits up to the value of the severance, then restart benefit payment again.

So, you may want to challenge the termination. Maybe get a free consultation with Resolute Legal.

Hope you may keep us updated so we can learn from your situation as well.

It would also be interesting to know what @David_Brannen thinks.

Yes very large international company with Sunlife as the LTD provider. That’s a good point. I would like to hear @David_Brannen thoughts on that too.

This severence they’re offering is taxable income including CPP which doesn’t make much sense since I also get CPPD. My Sunlife LTD payments are tax free. :thinking:

My initial thoughts to ask my employer HR liason is…
Please confirm
-the breakdown of calculations used to determine severence
-explain how someone on CPPD would be paying into a program that they’re not part of at this point.

  • provide certificate of insurance and/or complete booklet outlining severence and LTD insurer repayment requirements

@David_Brannen when should i get the consult. Employer states they’re paying per employment standards

It should be, you were still “employed” but I don’t know.

Since you have been on LTD for 7 years and there’s no chance you will return to work your employment contract is definitely frustrated.

In some provinces a frustrated contract means the employer owes yi szero $ of severance. In Alberta if am employment contract is frustrated severance owed is $0. In Ontario and BC severance on a frustrated contract is minimim severance base on the Employment standard Act which I think maxes out at 8 weeks.

Definitely call a lawyer to do a consult.

It is normal for them to include all the payroll deductions, but you shouldn’t be paying into CPP disability if you are also a receiptent of CPPD. I doubt you would convince the employer NOT to deduct and remit it, but it is somehting you can address with Revenue Canada to get CPP disability payroll deduction refunded to you.

I can’t give specific advice on severance offers in the forum because there are too many factors to consider. You would need to get 1:1 legal advice. Keep in mind there are provincial employment standards legislation that sets out the bare minimum companies must pay for notice of termination. then there is the common law requirements for termination pay that will apply to many, but not all people.

Frustration of contract will often apply in situations like you are describing, but some employers will not go that route and instead try to negotiate a severance so they can have the employee sign a release.

David Brannen

Disability Lawyer with Resolute Legal

The response posted above is based on the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with a lawyer, fully explain your situation, and allow the lawyer enough time to research the applicable law and facts required to give an adequate opinion. The basic information provided above is intended as a public service only, a full one-on-one discussion with a lawyer should be done before taking any any action. The information posted on this forum is available to the viewing public and is not intended to create a lawyer client relationship with any person. If you want one-on-one advice, please click here to request a free consultation or call toll free 1-877-917-7050 to speak with a member with our disability claim support team.

What is the release regarding?

A release refers to a “Release of Liability.” So, it saysing the severance agreement is a final settlement and the employee can’t sue the employer in future for anything arising out of the employment, including human rights, more severance pay, etc. Releases will often include a confidentiality and non-disparagement clauses as well.