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Severance Pay

Policy Statement

Employees who have completed 9 years of continuous service are eligible to receive up to 20 weeks severance pay upon resignation, retirement or termination of employment with or without cause. In the case of an employee's death, severance pay is paid to the employee's estate.


Application

This policy applies to all employees. Bargaining unit employees should also consult their respective collective agreement.


Definitions

Continuous service:
unbroken and accumulated complete years of service (since last date of employment) from within a government department or within an agency from which an employee has transferred pension credits and other benefits.

Service:
any period of employment during which an employee is in receipt of salary or wages, including periods of special leave without pay, not exceeding 20 working days in the aggregate in any given year.


Responsibilities

It is the responsibility of the Departments and Agencies to:

  • maintain proper records of employment; and
  • pay severance pay based on salary earned immediately prior to the resignation, retirement, termination of employment with or without cause or death of an employee.

Recognized Service

Treasury Board will consider requests for recognition of prior service with a provincial crown corporation or agency for severance pay calculation where:

  • the previous employer follows a severance pay policy that is the same as or equivalent to the severance pay benefits as outlined in this policy (TBM 385-91) ; and
  • the employee did not receive severance pay on termination of employment with the corporation or agency.

The following periods of leave will not be considered a break in service, but they will not be counted as continuous service for the purposes of calculating severance pay:

  • special leave without pay;
  • seasonal lay-off not exceeding 24 months; and
  • leave under the Deferred Salary Leave Plan.

Periods of parental leave are counted as service for purposes of calculating severance pay.

Where employees are working less than full time, or where they have had periods of employment less than full time, severance pay will be calculated by multiplying the number of complete years of accumulated service by the employee's weekly salary to a maximum of 20 weeks pay.


Payment of Severance Pay

Employees who move from one provincial government department or public sector agency to another are not entitled to severance pay benefits if the employing department or public sector agency has the same or equivalent severance benefits as outlined in this policy. (TBM 2000-094)

Severance pay is based on the salary of the employee's permanent position or salary earned at time of departure, at a rate of 1 week's pay per year of service, to a maximum of 20 weeks.

The maximum severance pay which may be paid to employees for their total periods of employment in the public service, whether or not they were re-employed at any time after the payment of severance pay, cannot exceed 20 weeks.

Employees who receive severance pay and who are subsequently re-employed, in any capacity, in the public service prior to the end of the period for which they had received severance pay, will be required to pay back that portion of the severance pay which overlaps with their return to work. Where employees receive severance pay as a result of termination of employment, the severance pay period will follow the notice period or the pay in lieu of notice period.

The repayment period will not exceed the number of weeks for which the employee was eligible for severance pay. The interest rate to be charged on repayments will be that which is set, from time to time, by the Department of Finance.

Last Policy Update: March 1, 2012

 
Last Updated:
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