Suppose an employer wants to end an employment contract without cause in Ontario, and the employee has worked with them for at least 90 days. In that case, the employee is entitled to a minimum amount of notice that their job will end on a specific date in the future (the termination date). That notice period, by default, is considered a working notice period, where the employee continues working and earning wages, and the employer still receives work for the wages they pay.
Many employers decide, however, that it’s best to terminate the employment immediately, in which case they can pay the employee the wages they would have earned during a working notice period, plus any severance and vacation pay the employee is entitled to. As an employee, you might prefer this option as it gives you time to look for a new, similar job (which is the purpose of the notice) without continuing to go to your workplace. An employer can also choose to give the employee a combination of working notice and pay in lieu of notice to cover their statutory notice entitlements.
The length of a notice period, or the amount of pay in lieu of working notice, depends on a few factors, including the existence of a written employment contract, its wording and potential legal exceptions that may apply to the work being done. If you’ve been offered working notice or pay in lieu of notice (or a combination), speak to a Toronto employment lawyer immediately to ensure that you were given the proper notice and severance pay. Employment lawyers also help negotiate severance packages that may be advantageous to both parties as the employee gets the time to look for comparable work, and the employer isn’t getting work done by someone uninvested in the work they produce.
Learn the details regarding working notice in Ontario and how much pay you might be entitled to if terminated from your current position from the information in this post.
Disclaimer: The information in this guide and everywhere else on this website is for general information only and is not intended to provide legal advice of any kind. No lawyer-client relationship is created by accessing or otherwise using Ertl Lawyers’ website or by communicating with a lawyer or staff member. If you need legal advice, contact a leading Ontario employment and disability lawyer at Ertl Lawyers. We’re more than happy to speak with you.
Your Legal Rights to Working Notice or Payment in Lieu of Working Notice in Ontario
In employment contracts governed by Ontario’s Employment Standards Act (i.e., most employment contracts performed in Ontario), an employee who’s worked with an employer for at least 90 days is entitled to a minimum of one week’s notice for every year worked to a maximum of eight weeks. Even if the employee is hired at a new job before that notice period ends, they are still entitled to pay in lieu of notice for the remainder of the notice period. Severance pay may also be applicable in the event that you worked for 5 years or more for your employer, and they have a payroll of over $2.5 million.
However, an employment contract must contain a legally enforceable termination clause that clearly states that you are only entitled to the legal minimum of one week per year for the minimum notice period to apply. If not, you could be entitled to much more (see more in the “When You are Entitled to More Working Notice & Severance Pay than the Minimum” below).
The length of the notice period is a crucial issue as it directly impacts how much time a terminated employee has to find another job while still being paid. There are, however, two situations where the ESA‘s legal minimums do not apply.
Exceptions to ESA Rights Regarding Working Notice in Ontario
Your job may be exempt from the Employment Standards Act, which could mean that you are either entitled to more or less notice (working or pay in lieu) and/or severance pay than the ESA‘s legal minimums, based on the following reasons.
Employment Contracts Governed by Federal Statute
Certain industries are under the federal government’s jurisdiction and, therefore, regulated by it under the Canada Labour Code. This means that you can find your employment rights and entitlements in the Canada Labour Code if you work in:
- National and international transportation services, including road, marine, railroad and air travel.
- Telecommunications, including phone, internet and cable systems.
- TV and radio broadcasting.
- Postal services.
- Federal government agencies and the military.
If your federally-regulated workplace is unionized or your employment contract provides greater rights or benefits than the Canada Labour Code, they become the minimums you are legally entitled to.
Jobs with Special Rules in the ESA That Can Mean Less Working Notice, Severance Pay or Other Entitlements
An employment contract in Ontario cannot provide less working notice or pay in lieu of notice, severance pay or any other entitlement than the minimums detailed in the ESA unless it pertains to one of the many jobs that have special rules that exempt them from those legal minimums, including:
- Emergency workers and healthcare professionals.
- Manufacturing, construction and mining.
- Hospitality services.
- Fishing and agriculture.
- Residential building services.
- Government employees.
The entire list of exempted jobs can be found on this page, which also links to pages that outline their respective rules.
When You are Entitled to More Working Notice & Severance Pay than the Minimum
If your employment contract has a legally enforceable clause regarding your entitlements when terminated (or any other legal right in the ESA) that provides you with more time and/or pay than the legal minimum, your employer cannot give you less than what is in that clause – even though it is more than they are legally required to provide under statute.
Many employment situations aren’t covered by written contracts, do not contain a clause regarding working notice and severance pay, or are written in a way that makes it legally unenforceable.
In these situations, you might be entitled to common law working notice/pay in lieu of notice. Common law is derived from court case rulings, and it generally provides for a higher termination entitlement than the minimum included in the ESA.
*Pro tip – Always have an employment lawyer look at your contract to determine the enforceability of the termination clause and to tell you how much working notice/pay in lieu of notice and/or severance pay you could be entitled to. You can also check out our severance pay calculator in Ontario for an approximate value of how much severance you might currently be owed. You’ll likely discover it’s more than you thought.
Common Law Working Notice & Severance Pay
Along with a week’s working notice or pay for every year of employment, employees with at least five years of service are also entitled to a minimum of one week’s pay for every year of service up to a maximum of 26 weeks’ pay, as long as their employer has a total global payroll of at least $2.5 million, or the employer is laying off at least 50 employees in a six-month period because all or part of the business permanently closing.
Under the common law, calculations for notice and severance pay entitlements are based on how long it would reasonably take for the employee in question to find a comparable job. In other words, there isn’t a set formula or standardized table that provides specific numbers.
Instead, a judge deciding a trial or lawyers negotiating a severance package under the common law consider several factors that influence what a “reasonable” amount of notice and/or severance would be in a specific case. Some of the more common issues include:
- The employee’s age.
- Length of their employment.
- Type of work being done, the employee’s title and their level of expertise or specialization at the time of termination.
- The job market and availability of similar employment.
There are many other nuances that are considered, including if the employee was induced to leave another job, but generally, the longer it will take you to find similar employment, the more working notice and/or severance pay you are entitled to under the common law.
What Happens If You Are Terminated for Cause or Forced to Quit (Constructively Dismissed) During a Working Notice Period?
Assuming that you don’t resign and are not terminated with cause in Ontario, you are entitled to working notice/pay in lieu of notice and possibly severance pay. Whether you resign or are terminated for cause or not, you more than likely have earned at least some vacation pay between the last time it was paid to you and the date your termination becomes official.
It is possible that an employee’s behaviour after given a notice of termination becomes so disruptive as to warrant an immediate termination for cause – especially if the working notice period is a long one. An employee who is expected to continue working for an employer that is firing them and in a workplace where everyone knows they are being terminated, instead of looking for new work, may act out their resentment in their performance and attendance.
While an employee who stops coming in to work during the notice period may be considered to have voluntarily left their position and is no longer eligible for working notice, the type of behaviour that justifies a termination for cause is extreme, and a for-cause termination is only appropriate in severe circumstances.
Acts that include theft, violence, fraud, intentional misconduct, disobedience, or wilful neglect of duty are usually the standard for a termination with cause.
This is because a for-cause termination can result in the employee forfeiting their working notice/pay in lieu of notice and severance pay entitlements. An employee terminated for cause may also not be eligible for Employment Insurance (EI) benefits.
These are also the reasons why you must speak to an employment lawyer right away if your employer terminates you for cause.
Constructive Dismissal and Working Notice
Just as there is a risk that an employee’s morale leads them to behave in a way that could get them terminated for cause, there is also potential that an employer, because the employment relationship is about to end, substantially changes the employment terms, stops honouring the employment contract or directly, or indirectly harasses the employee during a working notice period. This is a form of constructive dismissal and can happen in situations where an employer wants to terminate an employee immediately, doesn’t have cause, doesn’t want to pay severance and tries to get the employee to quit on their own.
Constructive dismissal can happen if an employer unilaterally changes a fundamental term of the employment contract or acts in a way that shows that they no longer wish to be bound by the terms of the employment contract – like harassing an employee or allowing others in the workplace to harass them.
If an employer offers you working notice, you are expected to continue working until the termination date. However, you may be constructively dismissed if your employer makes changes like:
- Demoting you, even if you retain the same pay.
- Changing your responsibilities, who reports to you and who you report to.
- Significantly decreasing or changing your hours.
- Reducing your pay or eliminating your benefits and perks.
- Not paying you for overtime or commissions.
If major changes are made, do not simply assume that you have been constructively dismissed and quit your job.
Whether it is during a working notice period or not, always speak to an employment lawyer if your employer makes a substantial change to your employment situation, or you feel that your employer is trying to get you to quit or is building up a case against you as an excuse to fire you.
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