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Termination Pay in Ontario: How Much Are You Owed?
When an Ontario employer terminates an employee without cause, they must provide either working notice or termination pay in lieu. The Employment Standards Act, 2000 sets out the minimum entitlement. But the ESA is a floor, not a ceiling. Many employees are entitled to significantly more under common law, and accepting an offer at the ESA minimum without legal advice can cost you months of additional compensation.
This is the statutory minimum only. Common law reasonable notice, which courts calculate based on your age, length of service, seniority, and the availability of comparable work, frequently results in significantly higher entitlements — often measured in months rather than weeks.
Were you terminated and offered only the ESA minimum?
Most termination packages offer only the statutory floor. Once you sign a release you waive your right to pursue additional compensation. Get advice before you sign anything.
Call: 1-800-771-7882 Speak With an Employment LawyerESA termination pay chart: Ontario minimums by length of service
| Length of service | ESA minimum termination pay |
|---|---|
| Less than 3 months | None |
| 3 months to 1 year | 1 week |
| 2 years | 2 weeks |
| 3 years | 3 weeks |
| 4 years | 4 weeks |
| 5 years | 5 weeks |
| 6 years | 6 weeks |
| 7 years | 7 weeks |
| 8 or more years | 8 weeks (maximum under ESA) |
Is termination pay the same as severance pay?
No. Termination pay and severance pay are two separate entitlements under the ESA and you may qualify for both.
ESA termination pay
- 1 week per completed year of service
- Maximum 8 weeks
- Applies after 3 months of employment
- Required for all without-cause terminations unless a valid contract limits entitlement
ESA severance pay
- 1 week per year of service (including partial years)
- Maximum 26 weeks
- Requires 5 or more years of service
- Only applies where employer payroll exceeds $2.5 million or 50+ employees are terminated in a mass termination
How to calculate your ESA termination pay
What is included in termination pay?
Were you offered a termination package that only reflects the ESA minimum?
Most packages offer only the statutory floor. Common law entitlement, which considers your age, seniority, and the job market, frequently results in significantly more. Get advice before the two-year limitation period runs out.
Find Out What You Are Owed Or call us: 1-800-771-7882ESA minimums vs. common law: the difference that matters
The ESA sets the floor. Courts calculate common law reasonable notice based on the Bardal factors including your age, length of service, the character of your employment, and the availability of comparable positions in the job market. For many employees, particularly those who are older, more senior, or in specialized roles, common law notice significantly exceeds what the ESA requires. For a detailed breakdown of how common law severance is calculated see our guide to common law severance pay in Ontario.
Many employees accept packages at or near the ESA minimum without realizing they may be entitled to substantially more. Once a release is signed, the right to pursue additional compensation is waived. This is why getting legal advice before signing any termination documents is so important. For a complete overview of what a without-cause termination entitles you to see our guide to termination without cause in Ontario.
Frequently asked questions about termination pay in Ontario
How much termination pay do you get in Ontario?
Under the ESA, employees are entitled to one week of termination pay per completed year of service, up to a maximum of 8 weeks. Common law reasonable notice may entitle you to significantly more depending on your age, seniority, and the availability of comparable work. Many employees are entitled to months of compensation beyond the ESA minimum.
Is termination pay mandatory in Ontario?
Yes. Employers must provide either working notice or termination pay in lieu when terminating an employee without cause. The only exceptions are where the employee has not yet completed three months of service, where termination is for proven wilful misconduct, or where a valid employment contract lawfully limits entitlement to the ESA minimum.
How is termination pay calculated in Ontario?
ESA termination pay is calculated at one week of regular wages per completed year of service up to 8 weeks. Regular wages include base pay, vacation pay, and commissions or bonuses where regularly earned. Common law termination pay is calculated differently using the Bardal factors and has no fixed cap.
What is the difference between termination pay and severance pay?
Termination pay is owed on most without-cause terminations after 3 months of service. Severance pay is a separate entitlement that applies only where you have 5 or more years of service and your employer's payroll exceeds $2.5 million or 50 or more employees are terminated in a mass layoff. You may qualify for both.
Can my employer offer only the ESA minimum termination pay?
Your employer must pay at least the ESA minimum. Whether they are legally required to pay more depends on your employment contract and your common law entitlement. A valid termination clause in your employment contract may limit you to the ESA minimum. If no such clause exists, or if the clause is unenforceable, you may be entitled to common law reasonable notice which is frequently much higher.
What happens if I sign a release accepting the ESA minimum?
Once you sign a release, you generally waive your right to pursue additional compensation including common law reasonable notice. This is why getting legal advice before signing any termination documents is critical. A lawyer can assess whether the package reflects your full entitlement and negotiate on your behalf before you give up your rights.
Think you are owed more than the ESA minimum termination pay?
If you were terminated without cause and offered only the ESA minimum, do not sign anything until you have had your entitlements reviewed. Our team advises employees across Ontario on termination without cause, severance negotiations, and wrongful dismissal claims. Contact us for a confidential consultation.
Call us at 1-800-771-7882 or fill out the form below and we will be in touch.
The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Achkar Law Professional Corporation and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Achkar Law Professional Corporation. ©