In Ontario, an employee with at least three months of service is owed written notice of termination, or pay in place of it, under the Employment Standards Act: one week with less than a year of service, two weeks for one year but less than three years, then one more week for each year of service up to eight weeks at eight years or more (ESA s. 57). That is the floor. Longer-service employees may also be owed severance pay, and unless a valid contract limits it, common law reasonable notice can be far more.
Does this sound familiar?
A manager decides on Friday that an underperforming employee has to go. By Monday the question is not whether, but how much it will cost and what has to be in the letter. Most small employers in Ontario discover at that moment that there are three different answers, and that the cheapest one only applies if the paperwork was done right years earlier.
What is the ESA minimum notice?
The Employment Standards Act sets the minimum. An employee who has worked at least three months is entitled to written notice based on length of service (ESA s. 57):
| Period of employment | Notice required |
|---|---|
| Less than 1 year | 1 week |
| 1 year but less than 3 years | 2 weeks |
| 3 years but less than 4 years | 3 weeks |
| Each further year | 1 more week |
| 8 years or more | 8 weeks |
The employer may give working notice, pay in lieu of notice, or a combination. Benefits contributions must continue through the notice period, and vacation pay is earned on termination pay (at least 4 percent of wages, or 6 percent with five or more years of employment).
The ESA guide lists employees who are not entitled to notice, among them an employee guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer, an employee hired for a specific length of time or task whose term ends (with exceptions), and construction employees. The exclusions are narrow, some are complex, and the misconduct bar is high.
When is severance pay owed on top of notice?
Severance pay is separate from notice. It applies when the employee has five or more years of service and either the employer has a global payroll of at least 2.5 million dollars or the employer severed 50 or more employees in a six-month period because all or part of the business permanently closed (ESA s. 64). The amount is one week of regular wages per completed year of service, plus completed months divided by 12 for a partial year, to a maximum of 26 weeks (ESA s. 65). Many small employers fall under the payroll threshold, but the test looks at the employer's total payroll, not only the Ontario location, so check before assuming it does not apply.
What is common law reasonable notice, and why does it matter more?
Unless an enforceable contractual provision limits the employee's notice entitlement, Ontario courts apply common law reasonable notice. Courts weigh the character of the employment, the length of service, the employee's age and the availability of similar employment, the factors from Bardal v. Globe and Mail (1960 CanLII 294, Ont. H.C.). Awards are measured in months rather than weeks, and for senior, long-service employees they can run well over a year; the number depends on the case.
This is where termination clauses matter. In Waksdale v. Swegon North America (2020 ONCA 391) the Court of Appeal held that termination provisions must be read as a whole, that courts will not enforce termination provisions that are in whole or in part illegal, and that it does not matter whether the employer relied on the offending clause; the employee then falls back to common law. We covered the enforceability test in a separate article on Ontario termination clauses.
Before you terminate: a five-point check
- Confirm length of service and the start date on file.
- Read the signed contract. Is there a termination clause, and does it meet the ESA in every scenario?
- Calculate the ESA notice and, if applicable, severance pay.
- If no enforceable clause exists, estimate common law notice before deciding the package.
- Prepare the written notice, the benefits continuation and the record of employment.
FAQ
Can I give pay instead of notice in Ontario?
Yes. The ESA allows termination pay in lieu of notice, working notice, or a combination, as long as the notice and the weeks of termination pay together equal the required period and benefit plan contributions continue (ESA ss. 57, 60 and 61).
Is severance pay the same as termination pay?
No. Termination pay replaces the notice period. Severance pay is an additional amount owed only when the service and payroll or mass-termination conditions are met.
Does the employee get notice during probation?
There is no ESA notice entitlement in the first three months of employment, though a contract or common law can still create obligations. Probationary terminations for attendance are covered in a separate article.
What if the employee signed a contract limiting notice to the ESA minimum?
If the clause is valid, the ESA minimum applies. Ontario courts, most clearly in Waksdale, read the termination provisions as a whole and will not enforce provisions that are in whole or in part illegal, so have the clause reviewed before relying on it.
Where can I check the numbers for my exact situation?
OptiMaxWork AI answers your specific Ontario termination question with verified government sources, in English or Korean.
Not sure what your employee is owed? OptiMaxWork AI asks the clarifying questions a consultant would, checks the answer against official Ontario sources and shows them. Ask your question.
For information only, not legal advice, and no lawyer-client relationship is created. Figures and rules were checked against the Ontario Employment Standards Act, 2000 (ss. 54 to 66), ontario.ca Your guide to the ESA (Termination of employment; Severance pay; Vacation), and Bardal v. Globe and Mail (1960) and Waksdale v. Swegon North America (2020 ONCA 391) on CanLII, and against an OptiMaxWork AI verified report, then reviewed by an SHRM-SCP. Confirm current sources before acting.