Unless you have a contract permitting payment by salary continuance, the Courts generally require an employer to pay damages for wrongful dismissal in a lump sum. Sometimes, if the matter gets to Court before the end of a reasonable notice period and there is evidence suggesting the dismissed employee may get another job before the end of the notice period, the lump sum award could be reduced to reflect this contingency.
In a leading case dealing with salary continuance versus lump sum awards (Tull v. Norske Skog, a copy is on our website under “Our Cases”), the trial judge stated that the Courts do not generally sanction a salary continuance arrangement unless the length of the notice period offered is on the high side of the range of reasonable notice.
The method of payment is frequently an issue that the parties can agree on in settling a case. Some severance offers include a term to the effect that salary continuance will continue for a number of months but if the employee gets another job during the salary continuance period, the employer will pay out a percentage of the remaining amount of salary continuance. Again, this is not a term that the Courts will imply into a contract and dismissed employees are not required to accept this method of payment. This arrangement may be a beneficial way to settle a lawsuit if the length of salary continuance and the percentage of payout are acceptable to both parties.