Losing a job is one of the most stressful things a person can face. But taking care of a few important tasks in the first few weeks can protect you and help you feel more in control of your situation.
If losing your job came as a shock, it’s best to avoid making sudden decisions on your own. Ask someone you trust to help you through this stage and give you objective, level-headed feedback and support.
All the same, you need to deal with certain matters quickly—usually within 1 to 4 weeks after your last day of work. These are 5 basic tasks you need to take care of:
- Negotiate your severance and settlements
- Get your record of employment
- Ask your former employer for references
- Apply for employment insurance
- Do some financial planning
1. Negotiate your severance and settlements
If you had a permanent job, your employer may have offered you a severance payment or settlement package. Your employer may try to get you to accept the package right away. But you should take some time to think about the offer and do some research. Don’t be afraid to negotiate.
Once you reach an agreement with your employer, get it in writing.
Do some research
Before you sign anything:
- Find out exactly what your company is offering. Make sure you understand the details.
- Understand the difference between a layoff and termination. These are common terms used to describe when someone stops working. Sometimes, people use these words to mean the same thing, but Alberta Employment Standards rules have specific definitions for each term. Understand which one applies to your situation, because they have different rules about what you should get.
A layoff happens when an employer gives an employee proper notice of temporary layoff, and the employer intends to have the employee return to work in the future.
A termination happens when either the employee or the employer ends the employment.
- Get advice from someone who knows about employee settlements to ensure you get the best deal possible.
- Learn about the notice and termination pay employers must legally give you when they terminate your employment.
- Find out about group termination special rules and whether they apply to your situation. Group termination applies when 50 or more people are being let go in a short period.
Make sure the settlement you reach with your former employer clearly states the terms and conditions of your termination in a written document. And make sure the document is signed.
Key points to consider when negotiating a settlement
Note that your employer does not have to give you a severance package higher than the basic amount for termination pay. A severance payment is not a legislated requirement—it’s usually an award given by the employer to the employee being let go for the service the employee has given to the employer.
If your employer does offer you a settlement or severance package, you’ll need to think about a number of topics when you’re negotiating and finalizing it.
Your rights and entitlements
Does the package meet the minimum requirements of Alberta’s Employment Standards Code? Your employer must:
- Give you 1 to 8 weeks’ notice of termination, depending on how long you’ve been with the company, or
- Pay you wages (also called termination pay) if they do not provide adequate written notice, or
- Give you a combination of written notice and termination pay
If you think you may have lost your job due to discrimination, you may wish to contact the Alberta Human Rights Commission for advice and support.
Your benefits
Will you continue to have benefits once you have stopped working? Consider:
- Will your medical, dental, and insurance benefits continue for a while after you’ve been terminated?
- Can you convert any group life insurance that your company provided into a private policy?
- Can you negotiate to have your employer continue to cover you (if you’re not covered under a spouse’s plan)?
- If your employer will not cover you, can you pay part or all of the premiums yourself? If so, you might get a lower group rate than if you get a plan on your own.
Your payout and pension options
What are the payout options? For example:
- Will you get a lump sum or instalment payments?
- If your payout will be paid in instalments, will you stay on record as a salaried employee for a while?
How you are paid may affect your taxable income and your eligibility for employment insurance.
If you had a pension plan, what are your options with regard to the pension you’re owed? The most common options are:
- Keeping your money in the company pension plan
- Transferring your pension to a new employer’s plan
- Transferring your pension to an RRSP
- Unlocking your pension and getting access to the funds before retirement—in Alberta, this can only be done in specific situations
You can talk to your banker or accountant to find out which of these options works best for you.
Outplacement support
Outplacement services help former employees find new jobs.
A good outplacement service will help you with much more than your resumé. It might provide:
- Counselling
- Group workshops on topics such as coping with the job loss
- Exploring new careers
- Networking
- Financial planning
Your former employer does not have to provide outplacement services, but many employers are willing to. If outplacement services are not part of your package, ask for them. If the employer says no, try to negotiate for more severance pay so you can buy outplacement services on your own.
Do you need legal advice?
Before you take legal action, here are some things you should think about:
- Could you file a complaint for termination pay with Employment Standards? This is a no-cost option. Note that this will only address issues related to not meeting the legislated minimum requirements. If you want to claim severance pay beyond the minimum requirements, you must review that option in a civil court.
- Do you need to take legal action? Or would it be better to reach an agreement with your former employer out of court?
- Will hiring a lawyer cost more than you will gain by getting a better settlement?
- Could suing your former employer have a negative impact on your career? For example, will other employers in your field be worried about hiring you?
If you still think your employer may not be offering you a fair settlement package, consider contacting a lawyer who specializes in labour law. The Law Society of Alberta offers a free referral service. When you choose a lawyer, ask for a free half-hour consultation.
What can you do if your employer is bankrupt?
If the company you worked for is closing and declaring bankruptcy, a trustee of bankruptcy will be appointed. Employment Standards may not be able to resolve complaints when the employer is bankrupt or is in receivership. You need to:
- Contact the Government of Canada’s Office of the Superintendent of Bankruptcy to get the name of the appointed trustee and register a claim.
- Act quickly. As a creditor, you have a limited amount of time to make it clear that money is owed to you. For more information, read about the Wage Earner Protection Program.
2. Get your record of employment
You need a record of employment (ROE) to collect employment insurance.
Electronic ROEs
Some employers electronically file ROE reports directly with Service Canada. If this is the case, the employer does not need to give you a printed copy. You do not need to submit a copy to Service Canada to apply for employment insurance. If you would like your ROE for your own records, you have 2 options:
- View and print copies of your ROE from your My Service Canada Account
- Ask your former employer for a print copy
Paper ROEs
Other employers mail out hard copies or have employees pick up their ROEs. If you get a paper ROE, you must submit a paper copy to Service Canada when you apply for employment insurance.
When should you expect to get your ROE?
No matter how your former employer issues ROEs, ask when they will issue it.
Most employers must issue an ROE within 5 calendar days of paying you for the last time. There might be different deadlines depending on the pay period type and how the ROE is issued. If your ROE has not been issued within 14 calendar days of your last pay, contact your nearest Service Canada Office for help.
If you apply for employment insurance, you will need an ROE from every employer you worked for in the past year. Even if you don’t plan to apply now, you may need an ROE down the road, so make sure you get it.
3. Ask your former employer for references
You will need references when you’re looking for a new job. Ask your supervisor if you can list them as one of your references or if they would be willing to write a letter of recommendation. Although your next employer will probably contact your references by phone, it’s still a good idea to ask for a letter of reference.
How to Choose the Best Job References has some practical tips, including what to ask for and when reference letters are most useful.
4. Apply for employment insurance
File for employment insurance (EI) as soon as you stop working. Do this even if you don’t yet have your ROE and even if you’ll still receive money from your former employer.
You could lose benefits if you do not file for EI within 4 weeks of your last day of work.
Not sure whether you qualify for EI? Apply anyway. Your situation cannot be assessed until you have an active claim. The sooner you apply, the sooner your claim can be settled. Even if you don’t get benefits right away, having a claim open may mean you can get other services such as employment and training programs.
File your EI claim online or in person at your nearest Service Canada Office.
5. Do some financial planning
You’ll need to make sure you can pay your bills until you’re back on your feet.
Budget carefully
Now, more than ever, it’s important to budget carefully:
- Take a close look at your spending habits and think about how you can live on less. You may want to put away the credit cards.
- Talk to your banker about ways you can manage your money better, like consolidating your loans or lowering your mortgage payments.
- Use Money Mentors, an Alberta not-for-profit counselling agency that can help you manage debt and plan your finances.
Manage your pension and severance payouts
If you get a pension or a severance payout, you need to figure out how to handle this money. Should you transfer it directly to an RRSP? Put it into a savings account? Make an investment? Here’s what you need to consider:
- The taxes you’ll have to pay
- Whether the payout affects your EI claim
- Your long-term financial goals
Consult other financial planning resources
Talk to your accountant, your banker, or your investment advisor. Make sure your advisor is someone you trust who can explain your options in plain language. Some advisors will steer you to a deal where they make money in high commissions. Take care of yourself by finding out up front what the advisor charges.
If you don’t have an accountant, banker, or investment advisor, ask a friend to recommend someone. You can also find financial planning help in other ways:
- Check the Canada Revenue Agency website for current information about taxation.
- Find up-to-date financial information at your local bookstore or library.
- Find other resources and seminars offered through Money Mentors.
Get expert financial advice from other sources:
- 211 Alberta
- Credit Counselling Society
- Community organizations—Find a community organization through:
- Family and Community Support Services Association of Alberta (FCSSAA)
If you find yourself in a situation where you don’t have a severance package, aren’t eligible for EI, and have no other resources—including family support, investments, or savings—you can apply for family and social supports through Alberta Supports Centres. These include helping people meet basic food, clothing, and shelter needs for an interim period until they can support themselves again. People who are eligible for income support may also receive health benefits and information and training to help them find a job.
Losing your job is never easy. But by getting some key things done in the first few weeks, you will protect yourself and start to feel a bit more in control of your life. Once you’ve taken care of these tasks, you’ll find it easier to cope and focus on finding work.