It’s not just a fear: you’ve been laid off. Here’s what you need to know
FP Magazine February 03, 2009
When Pete Evans showed up for work on a Monday in early December — a pay day — he had no idea he’d be out a job by the end of the week. “It happened so fast,” the 28-year-old writer explains. His first clue that something was wrong was when he learned the paycheques hadn’t been issued. Complaints to the boss led to a meeting where staff was told everything was “fine.”
Evans was hired just two months earlier at the online publishing company, with no indication that anything was the matter. “I left a job at a newspaper to take the position,” he says. “The new company hired me to work full time, with a $50,000 salary, benefits, vacation. I thought it was too good to be true. It was.”
The following Friday, when Evans got to the office, the doors were locked. A note was taped to the entrance: “Go home,” it said. “The company is closed.” Evans’ employer was bankrupt, and suddenly, he was jobless — and out three weeks pay.
Whether you can see if coming from a mile away, or if it comes completely out of the blue, losing your job is often a traumatic event. Here are the essential things you need to know to make the most painless transition possible to getting a new job — one that may be even better than the one you lost.
First of all, don’t be embarrassed about being laid off. It’s important to be open about what happened with your family so they understand what you’re going through — they will be an important support system as you look for a job. “A layoff is very much like a death,” says Alan Kearns, a Toronto career coach. “There are the same layers of grief — anger, denial and depression.”
On a more practical level, once you get your Record of Employment (ROE) from your employer, you can apply for Employment Insurance (EI). The process of applying for EI is relatively simple, but expect it to take six to eight weeks after you’re approved to receive any money. You can fill out Service Canada’s EI application online, or at a local Service Canada Centre. If you wait longer than a month after your dismissal to file for EI, you may lose eligibility.
How much money you will get varies from person to person, but the basic benefit rate for EI payments is 55% of your average earnings, up to a yearly maximum of $41,100. So no matter what your salary was, you can receive a maximum of $1,740 per month (and yes, your EI payment is taxable income).
In some cases, such as Evans’s, applying for EI is more complicated: Since his company essentially doesn’t exist anymore, there is no one to give him his ROE. Service Canada does have a procedure to accommodate people like Evans who, for whatever reason, can’t get their ROEs.
In addition to EI, you may be entitled to severance if you weren’t given proper notice of losing your job. The amount you’re entitled to depends on various factors, such as how long you’ve worked for the employer. But be careful not to sign any contracts without having a lawyer review it. “You wouldn’t enter into a large business transaction without having the agreement read by a lawyer,” Toronto employment lawyer Daniel Lublin points out. “This is the same thing. Someone offers you money, you can choose to accept it, negotiate it or reject it.” Seek an employment specialist who can help untangle the legal jargon that bogs down the typical employment contract. You might not have understood what you signed when you took the job, but Lublin says it’s never too late to change it. “Even if you signed something that limits severance or notice to two weeks, the common law will consider what’s reasonable,” he says. “And that’s always going to be a larger amount of severance pay.”
But what about lost wages, such as Evans’s unpaid three weeks? Lublin says it may not be worth the effort for Evans to try to get it — because the company is bankrupt, there’s no guarantee he would succeed. However, if the amount was larger, it might be worth discussing your case with an employment lawyer.
Thankfully, Evans has no debt, and holds about $8,000 in investments and savings. He can survive a couple months without any new income. “I was that 20-something nerd who always put away some of my paycheque for a rainy day,” he says. “Well, right now it’s raining.”
Once you’re sure you can pay your next month’s rent or mortgage, it’s time to focus on the job market. In these competitive times, the freshly unemployed better be ready to network themselves hoarse. “Talk to everyone about your situation,” Kearns says, and join online networks like LinkedIn and Facebook. “It’s really important to connect with people you wouldn’t normally connect with, or seek situations you wouldn’t normally be in. Most opportunities come from your networks or your network’s network. You don’t know who will help, and who will be a dead end.”
Be sure to give yourself a realistic time frame for the job search, and warn friends and family that it may take a long time to get your career back on track. “The rule of thumb for finding a job is one month of searching per $10,000 of the salary,” Kearns says, so don’t be afraid to accept financial or career help when it’s offered.
But before you jump into the job search, make sure you do some soul searching and give yourself a bit of time to develop a positive attitude. Consider how to package your skills and sell them to employers, and think of this break in your career as a chance to do something completely new. “For some people that means taking a bit of time for themselves,” says Kearns. “A lot of people get severance packages, and their initial response is not to spend money, but they should really try a short vacation to de-stress.” Evans is taking the opportunity to try his hand at freelancing, something he’s always wanted to do. Kearns sees this happen a lot with layoffs. “People change careers, discover new passions,” he says. “It may not feel like it now, but this could be the best thing that happened to you.”