The Law of Work
  • Home
  • About
  • Professor David Doorey
  • Osgoode Hall LLM
  • Books
  • Guest Contributors
  • Useful Links
    • Archive
  • Home
  • About
  • Professor David Doorey
  • Osgoode Hall LLM
  • Books
  • Guest Contributors
  • Useful Links
    • Archive
The Law of Work
Law of Work Archive

So, You 'Overpaid' Severance and Now You Want the Money Back?

by David Doorey February 25, 2009
written by David Doorey February 25, 2009

Did you catch the story in the papers the other day about how Microsoft ‘overpaid severance’ to some employees it had terminated?  The company has asked employees to pay money back!  This is an American story, so the law on this would be determined, I presume, by whatever the terms of the contracts provide in terms of notice, if they provide for any notice at all.  In the U.S., employment is ‘at will’–which means that there is no common law requirement for employers to provide notice of termination at all.
More interesting to us is how would this be dealt with in Canada.  I haven’t done any research.  However, a few things seem clear. If the contract itself specified the amount of notice required, and the employer pays more by accident, then the employer might be able to sue in contract based on notions of mistake.  Assume though that the contract is silent on notice of termination.   In that case, the Canadian employer is obliged to give both statutory and common law notice of termination. 
In Ontario, we have a statutory requirement to pay notice of termination. The amounts required are clearly defined in the Employment Standards Act and are based on years of service.  But these amounts represent only the ‘minimum’ amount of notice required.   There is also a requirement to pay common law “reasonable notice”, which is often greater than the minimum statutory notice period.  Neither the employer nor the employee knows for sure what that common law notice period is at the time of the dismissal, because courts decide based on the application of a bunch of factors.  By looking at past decisions, the parties can estimate what the notice will be, but they can’t know for sure how much notice a court would order without going to court. 
The point is that, in Canada, it will often not be clear whether an employer has ‘overpaid’ the employee’s common law notice entitlements.  Quite frequently, in fact, employers ‘underpay’ employees, knowing that they will not bother to hire a lawyer and sue them for more.  Remember Howard Levitt’s classic advice to employers to do just this!  So, just because an employer says it has ‘overpaid’ the employee’s severance package, it doesn’t mean they have, legally speaking.   They might have paid more than they wanted to, but that is the employer’s problem.  From the ex-employees’ perspective, the issue is whether they have received ‘reasonable notice’, and what is ‘reasonable’ is a quite flexible standard. If the amount the employer gives the employee is in the ballpark of what courts order as ‘reasonable notice’, I can’t see any legal reason why the employee would need to give it back. 
In any event, for you law students, assuming there is no contract term specifying the amount of notice required, what cause of action does the employer have to recover a payment given to an employee in error?  Can anyone think of a tort?

2 comments
0
FacebookTwitterLinkedinEmail
David Doorey

Professor Doorey is an Associate Professor of Work Law and Industrial Relations at York University. He is Academic Director of Osgoode Hall Law School’s executive LLM Program in Labour and Employment Law and a Senior Research Associate at Harvard Law School’s Labor and Worklife Program. Professor Doorey is a graduate of Osgoode Hall Law School (LL.B., Ph.D), London School of Economics (LLM Labour Law), and the University of Toronto (B.A., M.I.R.).

Leave a Comment Cancel Reply

You must be logged in to post a comment.

previous post
The Changes to the Federal Pay Equity Model
next post
Employment Law Practice is Booming, But Someone Should Tell the Law Schools

You may also like

This Blog Entry is About the Lunacy of...

July 21, 2019

A Cross Country Update on the Card-Check versus...

October 3, 2018

The Folly of Not Voting to Strike in...

September 16, 2018

Unifor Posts Photos of Replacement Workers as Gander...

September 10, 2018

A Wrongful Dismissal Case and the Absence of...

August 29, 2018

China Said to Quickly Withdraw Approval for New...

August 27, 2018

The Latest Hot E-Commerce Idea in China: The...

August 27, 2018

The Trump Administration Just Did Something Unambiguously Good...

August 27, 2018

Unstable Situations Require Police In Riot Gear Face...

August 27, 2018

Trump’s War on the Justice System Threatens to...

August 27, 2018

Follow Us On Social Media

Twitter

Latest Tweets

David J. Doorey🇨🇦 @TheLawofWork@mas.to Follow

Law Prof. Talking #labor & #employment #law to the masses. @YorkUniversity @OsgoodeNews @LSELaw @CLJEHarvard @Jacobin @OnLaborBlog https://t.co/5V9r8VPHsh

TheLawofWork
thelawofwork David J. Doorey🇨🇦 @TheLawofWork@mas.to @thelawofwork ·
14m

President Biden calls for passage of #PROAct

Act bans employer captive audience anti-union meetings;

Expands def of “employee” to capture essentially what we call “dependent contractors” in Canada;

Increase penalties for unfair labor practices;

Doesn’t adopt card-check.

Steven Greenhouse @greenhousenyt

President Biden: "I'm so sick and tired of companies breaking the law when workers are seeking to unionize"

Reply on Twitter 1623164729530191874 Retweet on Twitter 1623164729530191874 Like on Twitter 1623164729530191874 4 Twitter 1623164729530191874
thelawofwork David J. Doorey🇨🇦 @TheLawofWork@mas.to @thelawofwork ·
4h

My fingers are just too big to play an A chord on the #guitar.

Otherwise I would be a rock star. This is the only thing holding me back.

Reply on Twitter 1623109078431027200 Retweet on Twitter 1623109078431027200 Like on Twitter 1623109078431027200 12 Twitter 1623109078431027200
thelawofwork David J. Doorey🇨🇦 @TheLawofWork@mas.to @thelawofwork ·
4h

Not seen comparable stats for Canada.There are terminations, but also better laws in most Canadian jurisdictions, including

- remedial certification
- interim reinstatement
- card-check/quick votes

“1 in 5 workers in US is fired for organizing a union” https://onlabor.org/labor-law-reform-is-needed-for-unions-to-succeed/

Reply on Twitter 1623103873161330688 Retweet on Twitter 1623103873161330688 Like on Twitter 1623103873161330688 1 Twitter 1623103873161330688
Load More

Categories

  • Alberta
  • Artificial Intelligence
  • Australia
  • British Columbia
  • Charter of Rights and Freedoms
  • Childcare
  • Class Action
  • Climate and Just Transition
  • Collective Bargaining
  • Common Law of Employment
  • Comparative Work Law
  • competition law
  • construction
  • COVID-19
  • Diversity
  • Employee Classification
  • Employment Insurance
  • Employment Regulation
  • Europe
  • Financial Industry
  • Fissured Work
  • Freedom of Association
  • frustration of contract
  • Gig Work
  • Health and Safety
  • Health Care
  • Human Rights
  • Immigration
  • Interest Arbitration
  • International Law
  • Labour Arbitration
  • Labour Economics
  • Law of Work Archive
  • Legal Profession
  • Manitoba
  • Migrant Workers
  • Minimum Wage
  • Newfoundland
  • Nova Scotia
  • OLRB
  • Ontario
  • Pension Bankruptcy
  • Privacy
  • Public Sector
  • Quebec
  • Real Life Pleadings
  • Saskatchewan
  • Scholarship
  • Sports Labour
  • Strikes and Lockouts
  • Student Post
  • Supreme Court of Canada
  • technology
  • Transnational Law
  • Uncategorized
  • Unions and Collective Bargaining
  • United States
  • Videos
  • Women and Work
  • Wrongful Dismissal
  • Home
  • About
  • Guest Contributors
Menu
  • Home
  • About
  • Guest Contributors
  • Legal Scholarship
  • Useful Links
  • Archive
Menu
  • Legal Scholarship
  • Useful Links
  • Archive

2020. Canadian Law of Work Forum. All Rights Reserved.