Wrongful dismissal claims are pursued by way of negotiation and through Ontario’s court system. An employee’s entitlement to damages for wrongful dismissal may greatly exceed the minimum benefits payable under the Employment Standards Act.
NOTE: If you have been dismissed, it is strongly advised that you seek legal advice regarding your entitlements prior to filing a claim under Ontario’s Employment Standards Act.
You cannot start a court action against your employer for wrongful dismissal if you have already filed an Employment Standards Claim with the Ministry for the same termination, unless your claim is withdrawn within two weeks of filing it.
Minimum Statutory Benefits Payable under Ontario’s Employment Standards Act
Under the Act, these statutory minimum termination benefits are must be provided upon a termination without notice or cause:
| Length of Employment |
Notice period or Termination pay |
| Less than 3 months: |
0 |
| 3 months, but under 1 year: |
1 week |
| 1 year, but under 3 years: |
2 weeks |
| 3 years, but under 4 years: |
3 weeks |
| 4 years, but under 5 years: |
4 weeks |
| 5 years, but under 6 years: |
5 weeks |
| 6 years, but under 7 years: |
6 weeks |
| 7 years, but under 8 years: |
7 weeks |
| 8 years or more: |
8 weeks |
Severance pay under the Ontario Employment Standards Act
In addition to statutory notice requirements, and the requirement of payment of salary in lieu of notice, Ontario employees in certain circumstances may be entitled to payment of Severance Pay, under the Act.
Under Ontario employment law, severance pay must be provided to an employee who:
- has worked for the employer for five or more years (including all time spent by the employee in employment with the employer, whether continuous or not and whether active or not), and,
- was employed by an employer who has a payroll in Ontario of at least $2.5 million or severed the employment of 50 or more employees in a six-month period because all or part of the business was permanently discontinued
Statutory severance pay in these circumstances is approximately one further week of ordinary per year of service. The maximum severance entitlement under the Act is an amount equal to the employee’s regular wages for a regular work week for a period up to 26 weeks.
The statutory severance benefit is calculated specifically by multiplying the employee’s regular wages (excluding overtime) for a regular work week by the sum of:
- the number of completed years of employment
and
- the number of completed months of employment divided by 12 for a year that is not completed.
Severance pay must be paid as a lump sum within seven days after termination of employment or on the next regular pay day, whichever is later, unless the employee agrees to a longer-term payment schedule.
Entitlements under common law for damages for wrongful dismissal may dramatically exceed the minimum statutory entitlements described in this section. We recommend that legal advice be obtained whenever a severance proposal is provided by an employer.
Other Provisions in the Employment Standards Act
The Act regulates and enforces many aspects of workplace law, including vacation and overtime pay, pregnancy, family and parental lave, Public Holiday entitlements and payroll issues.
The Employment Standards Information Centre may be reached at 416-326-7160 or toll- free at 1-800-531-5551, for further information.
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© Garry J. Wise and Wise Law Office, Toronto, Ontario, Canada. This information may not be reproduced without consent in writing.
