Laid-off employee wants old severance deal

Employer offered severance package in 2004 to anyone who stayed on but terminated employee with only working notice in 2006
|Canadian Employment Law Today

This instalment of You Make the Call involves a dispute over a severance package during layoffs.

Marija Ciric worked as a software engineer in the British Columbia facility of Raytheon Canada, an Ottawa-based manufacturer of air traffic management systems. In January 2004, Raytheon was downsizing through layoffs but wanted to retain key employees. To encourage those employees to stay on, Raytheon assured employees that anyone who was laid off in the future would receive severance pay of one month’s salary for each year of service plus further adjustments based on the age and level of the employee. Employees who accepted this package would sign a release they wouldn’t pursue their right to pay in lieu of notice and employment would end within a few days of being laid off.

In September 2005, Raytheon announced the B.C. facility would close permanently in September 2006 with all employees receiving one year working notice. Ciric was told her employment would end on June 10, 2006. Raytheon also informed her she was entitled to 9.4 months’ notice, one month more than the working notice and would be paid the difference when she signed a release.