Toivanen v. Electronic Arts (Canada) Inc. (No. 2 ... - Canada.com

Severance pay recognizes that an employee does make an
investment in his employer’s business – the extent of this
investment being directly related to the length of the
employee’s service. This investment is the seniority that the
employee builds up during his years of service…Upon
termination of the employment relationship, this investment of
years of service is lost, and the employee must start to rebuild
at another place of work. The severance pay, based on length
of service, is some compensation for this loss of investment:
excerpt cited in MacRae v. Interfor (No. 2), 2005 BCHRT 462
at para. 140 from Re Telegram Publishing Co. v. Zwelling
(1972), 1 L.A.C. (2d) 1 (cited with approval in Rizzo & Rizzo
Shoes Ltd. (Re), [1998] 1 S.C.R. 27 at para. 26)
The purpose of severance was also addressed in detail in Ontario Nurses’
Assn. v. Mount Sinai Hospital, [2004] O.J. No. 162 (“Nurses, Div. Ct.”)
and by the Court of Appeal in Ontario Nurses’ Assn. v. Mount Sinai
Hospital (2005), 75 O.R. (3 rd ) 245, [2005] O.J. No. 1739 (“Nurses”).
In the Nurses decision, a provision in the Ontario Employment Standards
Act (“ESA”) that disentitled disabled employees from receiving severance
pay was challenged under s. 15(1) of the Charter. The arbitration board
applied Law v. Canada (Minister of Employment and Immigration), [1999]
1 S.C.R. 1 (the “Law Analysis”), and determined that there was no
violation of s. 15(1) of the Charter, as the benefit of severance was denied
because of the non-viability of the employment contract and not due to the
nurse’s disability. The Divisional Court disagreed with the board’s
Charter analysis, and found that the dignity of the severely disabled was
violated by their exclusion from entitlement to severance pay. The
Divisional Court held that s. 58(5)(c)of the ESA was contrary to the
Charter and of no force and effect. The Court of Appeal upheld the
decision of the court below, and found that the provision had a profoundly
discriminatory impact on the most disabled.
Although the Nurses decision is a Charter case, I find the Courts’
determinations concerning the purpose of severance applicable and helpful
to the present case.
The Court of Appeal held that the purpose of severance was to provide an
earned benefit to long-serving employees: at para. 38. It went on to state:
Further, to the extent that severance pay is intended to ease the
transition of terminated employees to other employment, the
need of disabled employees for support in retraining and the
acquisition of new skills may be even more pressing that that
of other terminated employees…
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