Short-Term Employee Termination Pay: What to Expect

Short-Term Employee Termination Pay: What to Expect

Most people assume that short-term employees are not entitled to significant severance packages. However, under the common law, short-term employees may be entitled to large amounts of termination pay. The exact amount is dependent on the employee’s individual circumstances.

It is important to note that termination pay is assessed differently under Ontario’s Employment Standards Act, 2000 (“ESA”) and the common law. This article will discuss the differences between the two and what a short-term employee is entitled to upon termination.

What Is Termination Pay?

When you are terminated without cause, you are entitled to notice of termination. In other words, your employer must advise you that your employment will be ending on a specific date. This is referred to as a working notice. Alternatively, your employer can provide termination pay in lieu of providing notice. 

The ESA dictates the minimum amount of notice (or pay in lieu thereof) an employee must receive upon termination. Under the ESA, employees are most commonly entitled to at least one week of notice per year of service to a maximum of eight weeks. This can be working notice, pay in lieu of notice, or a combination of both. This is not exhaustive of an employee’s termination entitlements under the ESA. 

If an employment agreement does not have an enforceable termination clause, then an employee is entitled to common law reasonable notice upon their termination. Common law reasonable notice includes their minimum ESA entitlements but is often more generous.

The common law provides different standards for determining how much notice employees should be provided for termination. Rather than basing the notice period on only an employee’s years of service, the common law evaluates how long it will take the employee to find comparable employment based on multiple factors. In evaluating an employee’s entitlement, the court will consider the following non-exhaustive factors:

  • The character of the employment;
  • The length of service of the employee;
  • The age of the employee;  and
  • The availability of similar employment, having regard to the experience, training, and qualifications of the employee.

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Termination Fired

What Is a Short-Term Employee Entitled to Upon Termination?

The ESA mandates that an employee with over three months but less than one year of employment is entitled to at least one week of notice before termination. An employer may pay termination pay to avoid or reduce notice, either as a lump sum or a salary continuance that equals what the employee would have received with proper notice.

Short-term employees may be entitled to more termination pay under the common law. The exact amount depends on the above-mentioned factors. In addition, courts recognize that short-term employees also require time to find new employment and thereby provide them with a “buffer period” to assist them while they secure another job. Typically, short-term employees’ entitlement under common law could be upwards of three months of termination pay. 

When Is a Short-Term Employee Entitled to Large Amounts of Termination Pay?

The common law may entitle short-term employees to more substantial termination pay to assist them in finding new work. Courts determine the amount of termination pay based on the employee’s individual situation.

For example, in the case of Love v. Acuity Investment Management, the Ontario Court of Appeal awarded a short-term employee nine months of termination pay. Employed for 2.5 years, the employee held a high-level executive position and received a lucrative compensation package. The court found it challenging for the employee to secure comparable employment.

Short term employee worker


Short-term employees aren’t offered much notice or termination pay under the ESA, but common law recognizes their need for time to find new work, evaluated on a case-by-case basis.

Incase an employer terminates an employee without paying them what they are entitled to for termination pay an employee has a variety of options. If they are not entitled to common law notice but were denied their ESA entitlements, they can commence a claim through the Ontario Ministry of Labour. If an employee is entitled to more than just their minimum ESA entitlements, they would need to sue for their termination pay at the Ontario Superior Court of Justice

Incase your employer has recently terminated you, it is best to avoid signing anything and consult with an employment lawyer. An employment lawyer can help you understand your termination entitlements, negotiate your severance package, and navigate the legal process to help you achieve your desired result.

Contact Us

If you are an employer with questions about terminating an employee, an employee who has been terminated, or you otherwise need assistance at any stage of a workplace dispute, our team of experienced workplace lawyers at Achkar Law can help. Contact us by phone toll-free at 1-800-771-7882 or email us at [email protected], and we will be happy to assist.

If you are a small or medium-sized company looking for full-service support with the same-day response, visit our CLO Program page for our strategic solutions.


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Contact us by phone toll-free at 1-866-561-2176 or email us at [email protected], and we will be happy to assist.