During these tough economic times, employers are often looking to increase flexibility. Several of our recent blog entries have discussed ways in which employers can do so â€“ furloughs, work-sharing programs, changing employment contracts, and adjusting the size of the workforce. Recently, the British Columbia Court of Appeal granted Raytheon Canada some flexibility when it said that Raytheon did not have to provide severance pay in accordance with prior promises. (Marija Ciric v Raytheon Canada Limited)
Severance pay promises
In January 2004, Raytheon began downsizing its Richmond, British Columbia, facility. Layoffs had been made, more were expected and were subsequently made, and Raytheon was anxious to retain key employees. In order to do so, Raytheon told employees that were not being laid off that the practice of paying severance pay based on one month’s salary for each year of service, with an upward adjustment for age and level, would continue to apply to employees who were laid off from the Richmond facility in the future.