"Salary continuance" refers to a situation where an employee continues to receive their regular salary or income even though they are unable to work due to reasons like sickness, injury, or maternity/paternity leave. It helps the employee financially during their time away from work.
Full definition
Severance pay is considered insurable time but only where it is paid
as salary continuance and not as a lump sum.
The key point is that the amount to be paid
via salary continuance must be at least the reasonable amount of notice to which the employee is entitled.
This notice may be provided as working notice,
by salary continuance in life of notice, or as a lump sum payment in lieu of notice.
Check whether your ex-employer is
offering salary continuance or a lump sum payment, and whether you're still entitled to extended benefits or any kind of employment support.
Salary continuance means your company will continue to pay your salary (as if you were working) for a specified period of time.
This statement of law applies to contracts that specify payment of a lump sum or payment by way
of salary continuance.
Income protection insurance, also known
as salary continuance, can help you manage your expenses if you are unable to work for a certain amount of time if you are sick or injured.
The takeaway for employers is that if you are concerned that your employee may fail to mitigate his damages following termination, you may be well served by employing
a salary continuance approach to termination, rather than offering a lump sum.
Even though
salary continuance is not a legal mechanism for the payment of statutory termination pay, and even though judges will often not order it as a remedy in a wrongful dismissal case, that does not necessarily mean that (a) salary continuance is never «legal» or (b) employees may not have to accept it.
When it is paid as
salary continuance, all of the same ordinary tax deductions are made, so the government considers this employment income just as if you were working.