Many workers are thinking of making a career change or leaving secure employment, and one recent Bloomberg article explores the numerous benefits of changing your career every decade. Below, we discuss the drawbacks of doing so from an employment law perspective, especially if you are considering leaving a secure job without your next position already lined up.
The Downsides of Leaving a Secure Job
Although career changes can be exciting, there are some important points to consider before making the leap. When in doubt, contact an experienced employment lawyer to guide you through the process. Here are the downsides to keep in mind when leaving secure employment:
Loss of Benefits
Employees who have been with a single employer for a long time often enjoy benefits they have earned over the years. These benefits are wide-ranging and can include:
- registered retirement savings (RRSPs)
- stock options
- health benefits
- vacation accumulation
- disability benefits
These types of benefits have a dollar value and provide long-term security. They are designed to help with financial planning for later stages in life when you may want to work less or retire.
Employees considering a career change must account for added financial pressures that may result from losing the benefits associated with seniority or tenure. Starting new employment means working your way up from the bottom and spending years re-gaining the status already achieved. When starting a new position, employees may have to wait three months before receiving health benefits and up to one year before participating in an employer’s pension or RRSP.
Loss of Legal Rights
If you resign from a long-term position instead of being dismissed, you also give up your legal rights. According to the governing law in Ontario, the Employment Standards Act 2000 (ESA), employees who are dismissed by their employer are entitled to minimum notice, or pay in lieu of notice, of one week per year of employment, up to a maximum of eight weeks.
Employees working for a company with a payroll of over $2.5 million, who have a length of service of more than five years when terminated, are also entitled to statutory severance pay, which provides an additional one week of pay for every completed year of service, up to a maximum of 26 weeks. For employees with a decade or more of service, these amounts can quickly add up to big money.
People who are let go without fault or wrongdoing on their part have even more income protection based on what the courts or judges’ reason is fair. This is called “reasonable notice of termination” and can work out to a month or more per year of service, depending on an employee’s age, length of service, position, and the state of the labour market.
Employees who resign are not entitled to any pay from their employer, no matter how long they have worked for the company since they are choosing to cut ties. As such, they must provide two weeks of notice of their resignation or longer as written in their employment contract.
Loss of employment insurance
Resigning from your employment also means forfeiting any claim for financial support through employment insurance (EI). When an employee is dismissed by an employer, they can apply for EI benefits to receive some income while searching for new employment. Employees who choose to resign do not qualify for EI benefits and may face a challenging financial situation if they encounter delays finding footing in a new career.
Employment Lawyers in Toronto
While a career change may help employees who feel stagnant in their current employment, it is crucial to be aware of what you are giving up. If you feel unfulfilled in your current position, a first step may be to open a dialogue with your employer about the conditions of your employment and room for growth.
If you have any doubts about how your employer is treating you, or you are considering a career change, call us at 866.945.1819 or fill out our online contact form. At Lecker & Associates, our experienced employment lawyers will assess your situation and provide legal advice to support you.