This is the kind of question that entire textbooks can (and have) been written about. Even an entire year of law school would just barely be enough to cover the wide variety of legal issues that can come up in the vast topic of employment law in Ontario.
But it is still possible to understand some of the basics of what employees are entitled to when they are terminated in Ontario. Keep in mind that this article does not apply to unionized employees, or federally regulated industries (such as banking or airline employees).
In Ontario, your employer is free to fire you at any time and without explanation. They must, however, give notice of termination or pay a substitute sum in its place. A termination for reasons other than grave employee misconduct, such as willful misconduct, fraud, or harassment, is referred to as a termination without cause. Frequently, the employee is innocent of any wrongdoing. Examples of termination without justification include being fired due to subpar work output, financial difficulties at work, or a lack of “fit” with the team.
It should be noted that there are restrictions on when an employer may terminate an employee without cause. For example, under the Ontario Human Rights Code, an employer is not permitted to do so for discriminatory reasons, in retaliation for an employee upholding certain rights, such as your right to a safe workplace under the Ontario Health and Safety Act, or in extremely difficult situations. The termination is unlawful in those circumstances, and you might be entitled to compensation.
If an employee has been working continuously for at least three months, they are entitled to notice of termination (or termination pay in lieu of notice). A person is deemed to be “employed” not only when they are actively working but also whenever they are not working but there is still a working relationship (for example, time in which the employee is off sick or on leave or on lay-off). The “period of employment” determines how much notice an employee is entitled to. With the following exceptions, an employee’s period of employment includes both the time they are actively working and any other time during which they are still in an employment relationship.:
- Even though they may still be employed for the purposes of the “continuously employed for three months” qualification, an employee’s employment is considered to have ended on the first day of a layoff if it lasts longer than a temporary layoff. Any time after that does not count as part of the employee’s period of employment.;
- Only the most recent period of employment counts for the purposes of the notice of termination, if two distinct periods of employment are separated by more than 13 weeks..
In some cases, a person may have been “continuously employed” for three months or longer while still having a period of employment that is shorter than three months. An employee who has been continuously employed for at least three months is entitled to notice, and anyone who has worked for less than a year is subject to the one-week minimum notice requirement. In these circumstances, the employee would be entitled to notice.
Is “severance pay” and “termination pay” the same?
No. The distinction between termination pay and severance pay must be made clear. These terms are not interchangeable because these pay types differ. A different set of criteria than those outlined above are used to determine eligibility for termination pay, which is given in lieu of the required notice. Since they did not provide you with enough advance written notice of termination, if your employer wants to fire you immediately, they must pay you the appropriate termination pay. Written notice of termination is required for workers who have been employed for at least three months. Only if they give the right amount of termination pay, can an employer avoid giving written notice of termination.
Severance pay is not always due to every employee who is fired from their job. The following conditions must be met for an employee to be eligible for severance pay under the Employment Standards Act (“ESA”) in Ontario: They had worked for the employer for at least five years and,
(a) the employee was one of 50 or more workers who had their employment relationship terminated within six months as a result of the employer permanently discontinuing all or part of its business at the establishment; or
(b) the employer’s payroll is at least $2.5 million.
If these conditions are satisfied, the employee is entitled to severance pay, which is determined by taking into account the employee’s regular salary as well as the number of years and months of employment. Severance pay is subject to some exceptions that must be navigated with the help of an employment lawyer. If an employee engages in willful misconduct, performs specific types of construction or on-site maintenance, or if certain unforeseeable events may affect the ability of the contract to be fulfilled, they may not be eligible for severance pay.
How much notice pay can I get?
Notice pay in Ontario is governed by section 57 of the ESA and is based on the date of termination and the period of employment. If an employee is being let go without cause or if their position or industry qualifies as an exception, the employer is always required to give them a reasonable amount of notice or notice pay. Giving employees notice has the purpose of giving them the chance to find alternative employment. The employee has two options during the notice period: either they continue working and receive their salary and benefits, or they stop working and get paid in lieu of notice. If you are terminated “for cause”, you are generally not entitled to notice pay.
Only the minimum requirements and entitlements that employees are due upon termination are provided by the ESA. It’s important to be aware that there is a different way to get more rights after termination; this is called common law notice.
This can be acquired either through a court order or a negotiated settlement. To maximise what you are entitled to from your employer under this option, it is best to hire an employment lawyer who can help you navigate the Ontario legal system.
Again, when an employee is fired, they might be entitled to more than what their employer initially provides. As a result, it is wise to refrain from signing any contracts before carefully weighing all the variables that may affect the amount of money you will be entitled to upon termination.