There are a few limitations on the right to severance pay, which is not limited to the following:
When there is a break in the employee’s service (more than 12 months), the employee will not be entitled to severance pay for the years exceeding the break in service;
If the employee worked on a fixed-term contract for less than two years, the employee will not be entitled to severance pay. The employer will be liable for one week’s salary for each continuous year of service where the contract exceeded two years;
An employee will not be entitled to severance pay for the period that he/she worked as an independent contractor for the employer; and
When an employee reaches the age of retirement, he/she will not be entitled to severance pay if requested to retire at that age. The employee is not entitled to severance pay should he/she be allowed to work beyond the retirement age.
Therefore, it is on the employer to prove that one of the above-mentioned limitations exists to be absolved from the liability to pay an employee severance pay.
