Severance Pay | Termination Pay (Ontario)
If you’ve been let go from your job in Ontario, you may be entitled to more than you’ve been offered. Severance pay in Ontario is designed to compensate employees for their service, and a proper severance package can include more than basic termination pay. Before you sign anything, it’s important to know what you’re owed and how to protect your rights.
Being let go from your job can feel sudden and stressful, especially if you’re handed a severance package and asked to sign right away. But not all severance offers reflect what you’re entitled to under Ontario law.
You may have the right to more than what’s offered, especially if the termination was without cause or you’ve worked there for a long time.
A lawyer at Achkar Law can review your severance package, explain your options, and help you pursue what you’re legally owed.
Not Sure If Your Severance Package Is Fair?
A quick review of your offer could make a big difference. Our team provides severance reviews to help employees understand their severance pay, severance allowance, and other entitlements before signing.
What Is Severance Pay in Ontario?
Severance pay in Ontario is compensation an employer may owe when your employment ends, especially if you’ve worked with the organization for an extended period. It is different from termination pay, which covers the notice period required under the Employment Standards Act.
A proper severance payment is designed to recognize your service and help you transition after losing your job. Many employees are surprised to learn they may be entitled to both termination pay and severance pay, and that a severance offer can sometimes include additional elements, such as bonuses, commissions, or continued benefits.
What’s Included in a Severance Package?
A severance package is more than just a lump‑sum payment. In Ontario, a fair package often includes a combination of severance pay, termination pay, and other compensation that reflects the value of your role.
Depending on your circumstances, your severance package may also include:
- Continued health and dental benefits for a set period
- Outstanding bonuses, commissions, or incentive pay
- Payment for unused vacation or other entitlements
- A severance allowance to reflect long service or unique contributions
Employers don’t always offer everything they should. Having your severance package reviewed can make sure nothing is overlooked and that you’re receiving every dollar you’re entitled to.
“Too often, employees accept far less than what they’re legally entitled to when they’re let go. Before signing anything, speak to a lawyer. You may be owed significantly more than you think.“
— Christopher Achkar, Employment Lawyer
Termination Pay vs. Severance Pay in Ontario
Many employees confuse termination pay with severance pay, but in Ontario, they are two separate entitlements.
Termination pay is what your employer must provide if you are let go without sufficient working notice. It’s meant to cover the notice period required by the Employment Standards Act.
Severance pay, on the other hand, is additional compensation owed in specific situations, often when you’ve been employed for five or more years and your employer meets certain size or payroll thresholds. It recognizes your long service and helps with your transition after leaving.
You may be entitled to both termination pay and severance pay, depending on your role and how your employment ended. Knowing the difference can help ensure you receive your full compensation.
Why Should You Get a Severance Review?
Many employees accept a severance offer without realizing they could be entitled to more. A professional severance review helps you understand whether your severance pay, termination pay, and overall severance package meet Ontario’s legal requirements and fairly reflect your contributions.
A review can identify:
- Missing compensation, such as bonuses or commissions
- Gaps in continued benefits or pension contributions
- Whether your severance allowance properly accounts for your years of service
- Clauses in your agreement that may limit future opportunities
Before signing anything, getting a severance review can make the difference between an average offer and the full amount you deserve.
Frequently Asked Questions
About Severance Pay in Ontario
What is severance pay in Ontario?
Severance pay is compensation your employer may owe you when your job ends, often in addition to termination pay. In Ontario, it recognizes your years of service and helps with the transition after you leave.
What’s the difference between termination pay and severance pay?
Termination pay replaces the notice you should have received. Severance pay is an extra amount owed in specific situations, like long service with a larger employer. Many employees are entitled to both.
What should I look for in a severance package?
A fair severance package should cover all outstanding wages, vacation, bonuses, and any severance allowance you qualify for. It may also include extended benefits or other negotiated terms.
Why should I have my severance package reviewed?
A severance review can uncover missing payments, unfair clauses, or limits on future work. It gives you leverage to negotiate a better package before you sign.
Do all employees qualify for severance pay in Ontario?
Not every employee qualifies. In Ontario, severance pay is generally owed if you’ve been employed for five or more years and your employer meets certain size or payroll thresholds. Even if you don’t meet those criteria, you may still be entitled to termination pay or other compensation, so it’s worth having your situation reviewed.
A Quick Look at Our Client’s Story
After working for years in a demanding role, our client was offered a severance package that didn’t reflect their contributions or length of service. Unsure whether to accept, they reached out to our team. Our severance lawyers reviewed the offer, identified areas for improvement, and successfully negotiated better terms helping our client move forward with greater financial security.
Get Your Severance Pay Reviewed Before You Sign
If you’ve been offered a severance package or termination pay in Ontario, don’t feel pressured to accept it right away. A quick review can reveal whether your severance pay and any severance allowance truly reflect what you’re entitled to.
Our team has extensive experience reviewing and negotiating severance offers for employees across Ontario. We’ll help you understand your rights and pursue the best outcome possible.
