Losing a job in Ontario comes with two very different numbers: the ESA minimum your employer must pay by law, and the common-law entitlement a court would likely award. Most first offers sit near the first number. Knowing both is worth real money.
Number one: the ESA minimum
- Termination pay (notice): 1 week after 3 months of service, 2 weeks after 1 year, then 1 week per completed year to a maximum of 8 weeks.
- Severance pay (on top): 1 week per year of service — partial years counted pro-rata — to a maximum of 26 weeks. Only if you have 5+ years of service AND your employer's Ontario payroll is $2.5 million+.
- Always owed: unpaid wages and all accrued vacation pay, regardless of tenure or payroll size.
Number two: the common-law reality
Unless you signed an enforceable termination clause limiting you to the ESA, Ontario courts award "reasonable notice" using the Bardal factors: age, length of service, character of the position, and how hard comparable work is to find. Awards commonly run around a month per year of service, trending higher for older, long-service or specialized employees, with a practical ceiling near 24 months. A 55-year-old manager with 15 years might see 14–18 months at common law — against an ESA floor of 8 + 15 weeks.
The first 72 hours
- Don't sign anything on the spot. Deadlines like "sign within 48 hours" are pressure tactics; courts have little patience for them, and asking for time is normal.
- Get the offer reviewed. Most employment lawyers review severance offers free or on contingency. If the offer is near the ESA minimum after long service, a letter often moves it substantially.
- Apply for EI immediately. Don't wait for the severance to be sorted — apply now. Severance delays when EI starts, but late applications can cost you benefit weeks.
- Mind the tax. A lump sum is fully taxable in the year received; a retiring-allowance transfer to your RRSP (for pre-1996 service) or simply timing across the year-end can save thousands.
Who's outside these rules
Federally regulated employees (banks, airlines, telecom, interprovincial transport) follow the Canada Labour Code, not the ESA. Unionized workers follow their collective agreement's grievance path. Construction employees have their own ESA carve-outs.
FAQ
Is severance different from termination pay?
Yes. Termination pay replaces the notice you didn't get (max 8 weeks). Severance pay is an additional ESA entitlement (max 26 weeks) for 5+ year employees of large-payroll employers. Many people qualify for the first but not the second.
Can I get severance if I was fired for cause?
True just-cause dismissal (serious misconduct) can eliminate entitlements — but the legal bar for cause is high, and courts reject weak cause claims routinely. "Cause" on a termination letter is not the last word.
Does severance affect EI?
Yes — EI benefits start only after your severance period is treated as served. But apply immediately anyway: the claim is dated from application, and delays can forfeit weeks.
What if I find a new job right away?
ESA minimums are yours regardless. Common-law amounts can be reduced by "mitigation" income from new work during the notional notice period — one reason negotiated packages often include a clean lump sum.
Sources: Ontario Employment Standards Act, 2000 (termination & severance provisions), Ontario Ministry of Labour guidance; Bardal v. Globe & Mail (common-law factors) · Updated August 2026.
