Employer Advice on Terminating Employees

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Termination of employment in Ontario

When terminating an employee, it is critical that employers remain compliant with Ontario’s Employment Standards Act (ESA).

Employers are required to provide the terminated employee with the entitlements they are owed in accordance with the ESA. This helps protect your business from fines and reduces risk of wrongful dismissal claims.

Terminations for cause & without cause

In Ontario, as in the rest of Canada, there are two types of terminations:

Terminations for cause
Terminations without cause

When terminating without cause, employers are not required to provide a reason for letting an employee go. However, employees are entitled to either a termination notice or pay in lieu of notice.

Terminations for cause occur when an employer has just cause for firing an employee.

Reasons for a termination for cause include:

Wilful misconduct
Wilful neglect of duty
Causing harm to the company

Termination with just cause is the most serious type of termination. In such cases, the employer is not required to provide the employee with termination notice but must provide reasons for the termination.

How much termination notice must Ontario employers provide?

The amount of notice the employee is entitled to is based on their length of employment. The list below provides more details:

More than three months, but less than a year - One week
One year or more, but less than three years - Two weeks
Three years or more, but less than four years - Three weeks
Four years or more, but less than five years - Four weeks
Five years or more, but less than six years - Five weeks
Six years or more, but less than seven years - Six weeks
Seven years or more, but less than eight years - Seven weeks
Eight years or more - Eight weeks

What is termination pay?

If an employer does not provide written notice of termination, they must give the terminated employee termination pay in lieu of notice.

What is severance pay?

Severance pay is paid to a qualified employee when the employment is “severed.”

Severed employment refers to situations where the employer:

Dismisses the employee, including in instances of bankruptcy or insolvency;
Constructively dismisses the employee who resigns in response;
Lays the employee off for 35 or more weeks in a 52-week period; and
Permanently discontinues all business at a location.

Do you need help carrying out terminations correctly?

If you need help understanding the rules on terminations in Ontario, Employer Advice is here for you. Call us today at (1) 833-710-0677.

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