An Act respecting
the payment of Severance Pay
to Public Sector Employees
Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:
1. In this Act, "
Council" means the Public Sector Employees' Severance Pay Council established under subsection 6 (1); ("Conseil") "
employee" includes a director or officer of an employer, and a holder of office elected or appointed under the authority of an Act of Ontario; ("employ") "
employer" means an employer in the public sector that does not carry on its activities for the purpose of gain or profit to its members of shareholders, and includes the Crown and a body to which a person is elected or appointed under the authority of an Act of Ontario; ("employeur") "
Minister" means the Minister of Finance; ("ministre") "
public sector" means the public sector within the meaning of the Public Sector Salary Disclosure Act, 1996. ("secteur public")
2. This Act applies with respect to the termination of employment of an employee who is not subject to a collective agreement.
Limit on severance pay
3. (1)Where an employee's employment is terminated, the employer shall not give the employee a severance pay,
(a)in an amount that exceeds the amount of wages the employee received from the employer in the 24 months before the termination of employment or in such lesser amount as may be prescribed by regulation;
(b)in a manner that is contrary to the regulations or subject to terms or conditions that are contrary to the regulations; or
(c)in the case of a severance pay in an amount that is equal to or greater than $100,000, without first obtaining the approval of the Minister.
Approval of severance agreements by Council
(2)Any agreement between an employer and an employee with respect to the severance pay to be paid to the employee upon termination of employment shall be reviewed and approved by the Council.
(3)If a provision in an agreement referred to in subsection (2) conflicts with a provision of this Act or the regulations, the provision in this Act or the regulations prevails.
Obligation to reimburse severance pay
4. (1)An employee whose employment is terminated and who receives a severance pay in accordance with this Act shall reimburse the portion of the severance pay determined by regulation to the employer if, within the period of time after the termination date that is prescribed by regulation, the employee begins another employment within the public sector.
(2)Any person who fails to reimburse a portion of severance pay received from an employer contrary to subsection (1) is guilty of an offence and on conviction is liable to a fine of up to $25,000.
Public disclosure of severance pay
5. (1)Where an employee's employment is terminated and a severance pay of $100,000 or more is given to the employee in accordance with this Act, the employer shall immediately make available for inspection by the public without charge a written record of the amount of severance pay given.
Failure to disclose
(2)If an employer fails to comply with subsection (1), the Management Board of Cabinet shall require a ministry of the Crown to withhold part or all of any amount authorized by appropriation of the Legislature or by statute to be paid by the ministry to that employer to fund any activity or program of that employer.
When amount withheld may be paid
(3)Subject to subsection (4), an amount withheld under subsection (2) shall be paid to the employer from whom it is withheld only when the employer complies with subsection (1).
Failure continuing past fiscal year end
(4)An employer ceases to be entitled to payment of any amount withheld under subsection (2) if the failure to comply with subsection (1) continues to March 31 next following the date on which the direction to withhold was given and in that case the amount withheld is part of the Consolidated Revenue Fund.
6. (1)A Council know in English as the Public Sector Employees' Severance Pay Council and in French as Conseil de l'indemnit de cessation d'emploi des employs du secteur public is hereby established.
(2)The members of the Council shall include the Minister and eight persons to be appointed by the Lieutenant Governor in Council each of whom shall be a member of the Executive Council or a deputy minister.
(3)The Minister shall chair the Council.
Absence of chair
(4)The chair may authorize another member of the Executive Council to act as chair of the Council during his or her absence from a meeting of the council.
(5)The Council shall review any agreement between an employer and an employee with respect to the severance pay to be paid to an employee and shall approve the agreement if it complies with the requirements of this Act and the regulations.
7. (1)Upon the recommendation of the Council, the Lieutenant Governor in Council may make regulations,
(a)governing and establishing standards with respect to the severance pay payable by employers upon the termination of an employee's employment, including prescribing the amount of severance pay to which an employee is entitled, the time and manner in which payments are to be made by the employer and conditions respecting the payment;
(b)prescribing the portion of a severance pay that must be reimbursed for the purposes of subsection 4 (1) and prescribing the period of time referred to in that subsection.
Classes of employees
(2)A regulation under clause (1) (a) may create different classes of employees and employers and may establish different entitlements to severance pay for each class and impose different requirements, conditions or restrictions for each class.
8.This Act comes into force on the day it receives Royal Assent.
9.The short title of this Act is the Public Sector Employees' Severance Pay Act, 2000.
This Bill provides that a public sector employee who is not subject to a collective agreement is, upon termination of employment, entitled to a severance pay of no more than an amount equal to 24 months worth of wages. Further terms and conditions relating to the payment of severance pay may be set by regulation. In the case of a severance payment in an amount of $100,000 or more, the employer is required to obtain the approval of the Minister before the amount is paid to the employee. The Bill establishes the Public Sector Employees' Severance Pay Council to review all agreements relating to severance pay entered into by public sector employers and determine whether they comply with the Act and the regulations.
The Bill also provides that if a public sector employee who receives a severance pay finds other employment in the public sector after his or her termination, he or she will have to reimburse a part of the severance pay determined by regulation to the employer in certain circumstances that may be set by regulation.
Finally, the Bill requires that if a public sector employee is to receive a severance pay of $100,000 or more, the employer must make available for inspection a written record of the amount of the severance pay.