Ontario’s Severance Pay Chart
What Does Ontario’s Severance Pay Chart Say About Your Rights?
One of the biggest questions on workers’ minds when they are being let go is what their entitlements are. It can be difficult to parse whether what an employer is offering you really is reasonable. While employers very rarely put their best offer up first, here are some guiding principles to consider before reaching out to an employment lawyer.
What does the Employment Standards Act (ESA) say about termination?
Most employees in Ontario are provincially regulated, meaning they fall under the purview of the Employment Standards Act, 2000 (“ESA”). Notice of termination or pay in lieu of notice kicks in if you have been continuously employed for at least three months, per the chart below:
| Period of employment | Notice required |
| Less than 1 year | 1 week |
| 1 year but less than 3 years | 2 weeks |
| 3 years but less than 4 years | 3 weeks |
| 4 years but less than 5 years | 4 weeks |
| 5 years but less than 6 years | 5 weeks |
| 6 years but less than 7 years | 6 weeks |
| 7 years but less than 8 years | 7 weeks |
| 8 years or more | 8 weeks |
Notice of termination owed may be greater in cases of mass terminations.
Severance pay, on the other hand, kicks in when: 1) your employer’s global payroll is at least $2.5 million; and 2) you have worked for your employer for at least five years. The number of weeks of pay you would be owed would be equal to the number of years served, including fractions of years, up to a limit of 26 weeks.
What Are Your Entitlements Beyond Ontario’s Severance Pay Chart?
These statutory minimums, up to 34 weeks at most, must be paid out no matter what without any requirement for a signed release. That is the law under the ESA. They can only be withheld if you engage in “wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer”. This is a very high threshold, even beyond that of ‘just cause’ under common law.
Beyond these statutory minimums lie potential common law entitlements. By default, all employees terminated without cause are generally entitled to reasonable notice at common law, unless restricted by your employment contract. Common law entitlement is meant to act a sort of ‘bridge’ to your next comparable job, and the length is based on factors such as age, position, tenure, and salary. In most cases, reasonable notice eclipses your entitlements under the ESA, and is inclusive of those entitlements. It can go up to 24 months; and in exceptional cases, even longer.
While a properly drafted termination clause in your employment contract can limit your entitlements, many such clauses are not up to snuff. The law is constantly changing, and formerly strong termination clauses could now be unenforceable. If your termination clause is deemed unenforceable, you would maintain your common law right to reasonable notice. Employers can and usually do condition any settlement monies beyond your statutory minimums on the signing of a full and final release.
Why should I speak to an employment lawyer?
A lawyer is an invaluable asset when it comes to determining and fighting for your full entitlements upon termination. While notice of termination and severance pay can be dealt with through a Ministry of Labour complaint, the only recourse to receive common law reasonable notice is through the courts. Most employers will not take terminated employees seriously until they see that they have retained a lawyer, and thus mean business.
The first step to fighting for your rights is to know what your rights are; what are you entitled to upon termination? Before you sign any release, an experienced employment lawyer can give you the answers and make sure nothing is left on the table. If you would like to have us represent you in getting what is rightfully yours following a termination, please contact Whitten & Lublin online or by phone at (416) 640-2667.
Author – Sohrab Naderi