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Legal Ease
Legal Ease, Lawyer
Category: Canada Law
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Experience:  Lawyer
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I have only one employee, 65 yrs old, and he has been with

Customer Question

I have only one employee, 65 yrs old, and he has been with me for twenty years. If I close my business what do I owe him in severance or termination pay?
Submitted: 10 months ago.
Category: Canada Law
Expert:  Legal Ease replied 10 months ago.
Your employee would be entitled to receive reasonable notice or pay in lieu of notice or a combination of the two.Generally, in deciding what to reasononable notice is a court would consider various factors such as the age of your employee, how long your employee worked for you, what position the employee held with you, how difficult it will be for them to find a new job etc.At the high-end, if your employee is in a managerial position it is possible that a court would order one month's pay or one month notice for every year of service so that you may have to pay the employee close to 20 months pay or provide the employee with 20 months notice or a combination of the two.Does that help you understand how the law works with respect to termination of an employee ?
Customer: replied 10 months ago.
Thanks. Is there no starting point or minimum amount then? I certainly want to be fair but cannot afford 20 months...he is my only employee, he is 65 and an hourly employee earning 25:00/hour.
Expert:  Legal Ease replied 9 months ago.

There is a minimum but that has nothing to do with a case where the employee has worked there for 20 years.

But you can reduce what you have to pay by giving notice now and for the time the business is still open that counts as part of the notice period.

And 20 months is only for the most senior executive.

As well, if the business is a corporation and there are no assets the employee cannot sue and then enforce a judgment if there are no assets.

If there is no corporation then you would be sued personally unfortunately.

Customer: replied 9 months ago.
Thanks for that info. Then where do I start? I want to be fair to him but do not have unlimited funds. Would one week per year, in a combination of pay and notice be reasonable in your opinion?
Expert:  Legal Ease replied 9 months ago.

No in my view that is considerably less than what the court would award such a long time employee but you can try of course.

Customer: replied 9 months ago.
Well, what I am looking for is an educated guess based on previous expertise and knowledge as to what a reasonable starting point might be.
Expert:  Legal Ease replied 9 months ago.

Then start with one week per year and see how that goes. Some people believe that is all they can get so it may work.

Customer: replied 9 months ago.
I was thinking 6 months notice then 1 week per year at the end of that.....
Expert:  Legal Ease replied 9 months ago.

That is a good idea in my view and it may work.

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