In most cases, Ontario law requires 2 obligations from the employer on termination. These are as follows:

1.                  Payment of the sum owing by statute – the Employment Standards Act; and

2.                  Reasonable notice as determined by common law. This is less (1) above.

3.                  What you do not usually get is reinstatement, unless there are very exceptional           circumstances.

Most provinces in Canada have similar legislation to the same effect, although the mandatory payments are not as generous as in other provinces as under Ontario law. Quebec and Nova Scotia also have legislation which can allow, based on years of service, in part for reinstatement, as does the federal government for certain non- managerial employees regulated federally.

Let’s look at these issues in more detail.

In most cases

So what’s all this about ?

The reasons for this qualification are numerous.

Firstly, if you are covered by a union collective agreement, stop reading this right now and contact your union representative. All work related issues, even if not specifically mentioned in the collective agreement are likely to be governed by the grievance process. There are strict time periods in the grievance process, so call him/her now.

Secondly you may have signed a contract which limits or even expands on the “common law” obligations. That could be an important issue. You should receive advice on whether this contract is binding. If it is, it could well alter the common law obligations set out elsewhere on this site. It will not alter the sums owing by statute.

Also, you may be governed by federal as opposed to provincial law. If so, the statutory sums owing will likely by much less than the Ontario Act, but also you may be entitled to a reinstatement order, which is very hard to get under the Ontario statute.

The Employment Standards Act

OK, so you are a provincially regulated employee and presuming that you are not fired for “gross misconduct” or “willful neglect of duty” then you are entitled to payment(s) on termination.

These sums are due to you :

1.                  without the need to sign a release; and

2.                  without set off from any income earned after termination.

So what do I get ?

ESA #1 Termination Pay or Notice

The payments ( or notice of termination for the first obligation ) are in 2 categories which depend on certain factors, such as how big the employer is and how long you have been employed. Total service history counts, not the most recent consecutive number of years.

Here is the easy one: (“termination pay”)

After three months                  one week

After 12 months                      two weeks

After 2 years                          two weeks

After 3 years                          three weeks

After 4 years                          four weeks

After 5 years                          five weeks

( are you catching on now ?!)

This pattern continues to a maximum of 8 weeks after 8 years.

Also the Act mandates all benefits be continued for the relevant time period. This can be very important if you are ill or have serious medical problems. This section of the Act also requires vacation pay be paid for this time as well.

Keep in mind that the employer can either pay this sum or give working notice in writing of the same time period.

ESA #2 Severance Pay

The second category of payments requires two conditions be met. These are as follows:          (“ severance pay”)

1.                  Total cumulative employment exceeds 5 years ( ie total years, not necessarily consecutive ) and

2.                  The company payroll in Ontario and that is related companies exceeds 2.5 million annually.

Why the payroll threshold was inserted is a mystery, but presumably it was designed to lessen the hit on small mom and pop businesses.

The payroll test is for all related Ontario based companies, not just the “payroll” company. Also the payroll oddly enough, is the payroll in Ontario. If AT&T, just to use an example of a multi-billon dollar company, had 10 employees on Ontario, it would be able to duck this obligation.

Keep in mind that this payment also requires that the termination is not on account of “gross misconduct” or “wilful neglect of duties”.

The standard of cause is considered a tough one for an employer to meet.

This payment is one week per year of service, prorated to months per year of employment to a maximum of 26 weeks.

This is in addition to the first obligation. No benefits are covered by this latter requirement.

Yikes they didn’t pay me – now what ? - Remedy

What do I do if these payments are not made, or if I am asked to sign a release to get these payments or a higher sum which includes these payments ?

The short answer is to call your lawyer.

There does exist a mechanism to force the employer to make these payments. The complaint process must be started within 6 months. The problem is that filing for these payments with the Ministry of Labour will preclude ( ie read carefully = PREVENT / STOP / YIKES  ) you from suing for the common law payments and also will max out at $10,000. You will need advice from your lawyer on this step.

If you think that this is unfair, call and write to your Provincial Member of Parliament (MPP)  or the Minister of Labour.

Most companies will pay these sums voluntarily, even when there has been initial resistance. There is an argument that flagrant refusal to pay these minimum ESA sums would be independently actionable for additional damages for emotional distress.

Common Law

This is really not tough to understand, but it is worth a quick read.

Judge made law or “common law” implies into every employment relationship an obligation of the employer to give fair notice of termination, absent cause.

This, in theory, means working notice. In reality it means that one day you are called into the HR office, given a letter of termination, a settlement offer and a release to sign.

The common law allows a claim for salary which includes all components of income, direct and indirect for a fair notice period.

Let’s take a sample case. Harry is Vice President of Marketing for a large packaged goods company and has been employed for 15 years. He is 45 years of age and earns a salary of $95,000.

A judge will determine what a fair notice period will be. There is a good chance, in this case, it will be 12 months.

That means he can claim his income package, including benefits, pension, likely bonus for the 12 month period.

From this sum will be subtracted the minimum payments under the Act which we know all about now, and also any income he might earn from other employment, or other income earned, after the statute protected period ( here 23 weeks ) and before the end of the 12 month notice period.

This is a case which will not require litigation. The company will likely offer something comparable to what a judge will award.

How large the notice period will be is something your lawyer will tell you. He/she will likely review prior cases similar to your and offer a range of likely court awards. No one can pinpoint with precision what a judge will award in court but generally ranges can be assessed.

The highest notice award, absent unusual circumstances, will likely be 2 years.

The low end of the range sometimes can even be the weeks of notice and severance required by the Act, or perhaps as low as one to two to three months.

This is the issue on which your lawyer will assist you.

All this, of course, presumes, no employment contract and a termination without cause. 

The common law notice period can be increased where the employer’s actions on termination have been unfair which impacts on the time period it may take to find new employment. These actions  can include (1) improper allegations of cause (2) failure to give a letter of reference to assist in a job search. Such action may also lead to an independent claim for emotional distress damages.

Things Missing Here:

This is a general review and is no substitute for legal advice. There are many other issues on which you may require advice such as :

1. termination due to adverse discrimination, such as age, gender, race, religious beliefs, medical handicap;

2. rights to reinstatement on the expiry of maternity leave;

3. termination due to “whistle blowing”;

4. failure to reinstate on the completion of a disability under Workers Compensation Act, or otherwise.

     5.  The right under a public statute to a hearing, where that hearing has been denied. There are a series of peculiar acts which may mandate a hearing. The remedy can change dramatically in those cases.

There are many more. The point to note is that the law is complex and this is not intended as a definitive road map, just a brief overview to give the reader a very broad prospective.

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