Termination Pay in Ontario: How Much Are You Owed?

Is Termination Pay the Same as Severance Pay?

No.

Termination Pay (ESA Minimum)

• 1 week per year of service
• Maximum 8 weeks

Severance Pay (Separate ESA Entitlement)

You may qualify if:

• Your employer has a payroll of $2.5 million or more, OR
• 50 or more employees are terminated in a mass termination, AND
• You have at least 5 years of service

Severance pay equals:

• 1 week per year of service
• Maximum 26 weeks

Some employees qualify for both termination pay and severance pay.

ESA Minimums vs Common Law Termination Pay

The ESA sets the minimum. Courts may award significantly more under common law.

Common law severance considers:

• Age
• Length of service
• Position and seniority
• Availability of similar employment

Employees may be entitled to months of compensation, not just weeks.

Many termination packages offer only ESA minimums.

Ontario Termination Pay Calculator (ESA Minimum)

To calculate ESA termination pay:

Step 1: Determine Years of Service

Count completed years of employment.

Step 2: Multiply by One Week Per Year

Maximum 8 weeks.

Step 3: Multiply by Weekly Earnings

Include regular wages and vacation pay.

Example:

7 years of service × 1 week × $1,200 weekly pay = $8,400 ESA minimum.

This does not account for potential severance pay or common law entitlement.

What Is Included in Termination Pay?

Termination pay may include:

• Base salary or hourly wages
• Vacation pay
• Benefits continuation during the notice period
• Commissions (if regularly earned)
• Bonuses (depending on contract terms)

Employers must also continue benefits during the statutory notice period.

Who Is Not Entitled to Termination Pay?

You may not qualify if:

• You worked less than 3 months
• You were terminated for wilful misconduct
• A valid employment contract lawfully limits your entitlement

However, “cause” is often disputed and narrowly defined.

Can You Be Fired Without Termination Pay in Ontario?

Generally, no.

If terminated without cause, your employer must provide notice or pay in lieu.

Failure to do so may result in:

• An ESA complaint
• A wrongful dismissal claim
• Additional compensation beyond ESA minimums

What If Your Employer Only Pays ESA Minimums?

Many employees accept termination packages without realizing they may be entitled to more.

Once you sign a release, you typically waive your right to pursue additional compensation.

Before signing, consider whether:

• You qualify for severance pay
• Your package reflects common law entitlement
• Bonuses, commissions, and benefits were properly included

Frequently Asked Questions About Termination Pay in Ontario