Notice Period — Ontario Employment Law
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About Notice Period
In Ontario, when an employer terminates an employee without cause, they cannot simply show them the door. They must provide advance warning, known as a notice period. This period is a bridge, giving the employee time to find new work while still receiving their compensation. There are two distinct types of notice periods that every Ontario worker should understand. First is the statutory minimum notice required by the Employment Standards Act, 2000 (ESA). It follows a fixed scale: one week of notice with less than one year of service, two weeks with one year but less than three, then one week for each completed year, up to a maximum of eight weeks. This is the absolute legal floor. However, for most employees, this is not the full story. The second, and often much more significant, entitlement is to 'reasonable notice' under common law. This is a concept developed by judges over decades to ensure fairness. The length of a common law notice period isn't based on a simple formula but on a set of factors known as the Bardal factors: the employee's age, length of service, the character of their employment (e.g., seniority and specialization), and the availability of similar employment in the market. This period can range from a few months to as much as 24 months or even longer in exceptional cases. An employer can satisfy this obligation in two ways: by providing 'working notice,' where you continue to work until the end of the period, or by providing 'payment in lieu of notice' (PILON), where your employment ends immediately, and you receive a lump sum payment. Crucially, this payment should cover all aspects of your compensation—including salary, bonuses, commissions, benefits, and pension contributions—that you would have earned had you worked through the notice period. Because the calculation of a fair notice period depends heavily on individual circumstances, what might be appropriate for one person is not for another, making it a frequent area of dispute.
Frequently Asked Questions
What's the difference between the notice period and severance pay in Ontario?
Notice period (or termination pay under the ESA) is owed to most employees terminated without cause. Severance pay is a separate ESA entitlement, only owed to long-service employees (5+ years) at large companies (payroll of $2.5M+). You can be entitled to both, in addition to your common law reasonable notice.
Am I entitled to my bonus and benefits during the notice period?
Yes. If you receive payment in lieu of notice, it should include all forms of compensation you would have earned during the notice period, not just your base salary. This includes bonuses, commissions, car allowances, benefits coverage, and pension contributions.
My employment contract says I only get two weeks' notice. Is that legally binding?
It might be, but often it is not. For a termination clause in a contract to be enforceable, it must be drafted with very precise legal language. Many clauses that attempt to limit you to ESA minimums are found to be invalid by courts, which would mean you are entitled to full common law reasonable notice.
What happens if I find a new job during my notice period?
If you were terminated and received payment in lieu of notice, finding a new job affects your entitlements. The income from your new job is typically deducted from the damages owed by your former employer, as you have a duty to 'mitigate' your losses. This is a complex area of law.
Do I have to work during my notice period if my employer asks me to?
Yes, if your employer provides 'working notice,' you are generally expected to continue performing your duties in good faith. If you refuse, it could be seen as a resignation, and you might forfeit your entitlements. However, if the situation is toxic or you're asked to do something demeaning, you may have other options.
When should I talk to a lawyer about my notice period?
You should consider speaking with an employment lawyer before signing any termination documents. This is especially important if you are a long-serving or senior employee, if the offer seems low, or if your employer is relying on a termination clause in your contract to limit your payout.
Common Scenarios
- A 58-year-old marketing director with 18 years of service is terminated without cause and offered 8 weeks' pay, the maximum under the ESA, when their common law notice period is likely closer to 18-20 months.
- A software developer is terminated after four years and receives payment in lieu of notice, but the payment does not include the value of the stock options that would have vested during their six-month reasonable notice period.
- An administrative assistant with 10 years of service is given 'working notice' but is immediately stripped of their key duties and asked to spend their days training their much younger replacement.
- An employee is terminated and, believing the company's offer is final, immediately signs a release in exchange for a small payment, only to later learn they were likely entitled to a notice period three times as long.
What You Should Know
- Never sign a release or full and final settlement offer on the spot. You have the right to take it away and seek legal advice to ensure the notice period offered is fair.
- Understand that your entitlement is not just base salary. Gather documents related to all forms of your compensation, like bonus plans, commission statements, and benefits booklets, to calculate the full value of your notice period.
- Remember that the Employment Standards Act provides the minimum floor for notice, not the ceiling. Your true entitlement under common law is often substantially more.
- If you are terminated, start your job search right away and keep detailed records of your applications and interviews. This demonstrates you are fulfilling your legal duty to mitigate your damages.
- If your employer's offer is based on a termination clause in your contract, have an employment lawyer review it. These clauses are often unenforceable, which could dramatically increase your notice period entitlement.
Featured Cases
A. v. Fiera Foods Company
2025 ONSC 3240 (CanLII) · 2025-05-30Wrongful Dismissal: 13-Year Employee Awarded 10 Months' Notice
This wrongful dismissal case involved an employee with 13 years of service who was terminated for alleged time theft and dishonesty. The court considered whether the employer had just cause to terminate the employee based on an investigation supported by video and punch clock data, rejecting the employee's claims of reprisal for whistleblowing and unionization. The court awarded ten months' notice but denied moral or punitive damages due to the lack of bad faith, and drew an adverse inference against the employee for failing to provide evidence of mitigation efforts.
J.H.T.F. v. PRGX Canada Corp.
2023 ONSC 6374 (CanLII) · 2023-11-10A wrongful dismissal case involving issues of damages, mitigation, and the determination of a reasonable notice period.
M. v Ontario Potato Distribution Inc.
2022 ONSC 1490 (CanLII) · 2022-03-16Constructive Dismissal Claim Dismissed
This is a merits decision in a wrongful and constructive dismissal case where the plaintiff alleged a hostile work environment forced their resignation. The court found no evidence that the alleged threatening incident occurred or that the defendant was involved, ruling the resignation was voluntary and unequivocal, and thus dismissed the claim. The court also addressed hypothetical damages, noting that ten months' notice would have been appropriate if the dismissal had occurred, and declined to rule on the deductibility of CERB payments pending further submissions.
M. v. ARJ Investments Ltd.
2019 ONSC 4927 (CanLII) · 2019-10-08This is a summary judgment motion in an employment law dispute concerning the termination of an employee and the determination of the appropriate notice period or payment in lieu of notice.
Hampton Securities Limited v. D.
2018 ONCA 901 (CanLII) · 2018-11-09Constructive Dismissal: 6 Months Notice & Defamation Damages
This appeal concerns a trial judge's findings of constructive dismissal and defamation against an employer. The court addressed whether the employer's demand for additional funds and threat of suspension constituted constructive dismissal, and whether a termination clause was unenforceable under the Employment Standards Act, 2000. The Court of Appeal dismissed the employer's appeal, upholding the constructive dismissal finding, the six months' notice, the defamation and punitive damages, and the trial costs award.
H. v. Coreio Inc.
2017 ONSC 7713 (CanLII) · 2017-12-27Constructive Dismissal: Employee Awarded 20.5 Months Notice
This was a summary judgment motion in a constructive dismissal case involving a plaintiff with 22 years of service. The court found that the employer's unilateral changes to the work-from-home arrangement and bonus calculation constituted a breach of essential terms, resulting in constructive dismissal. The court determined the plaintiff was entitled to 20.5 months' notice in lieu of termination.
Brake v. PJ-M2R Restaurant Inc.
2017 ONCA 402 (CanLII) · 2017-05-23Constructive Dismissal: 20 Months Notice for Demoted Employee
This appeal concerns a constructive dismissal claim where an employee refused a demotion with inferior benefits. The Court of Appeal addressed whether the demotion constituted constructive dismissal, the employee's duty to mitigate damages by seeking comparable positions, and the appropriateness of the 20-month notice period awarded by the trial judge.
B. v Gracious Living Corporation
2016 ONSC 4127 (CanLII) · 2016-06-22Constructive Dismissal: Unauthorized Layoff Awarded 3 Months Notice
This is a merits decision regarding constructive dismissal where the employer unilaterally imposed a temporary layoff without contractual authorization. The court found that such a layoff constituted constructive dismissal and determined the appropriate notice period for compensation.
E.-H. v. 1202827 Ontario Inc
2014 ONSC 5265 (CanLII) · 2014-09-12Wrongful Dismissal: 13-Year Pharmacist Manager Awarded 13 Months Notice
This wrongful dismissal case involved a pharmacist manager with 13 years of service who was terminated without cause. The court awarded damages for wrongful dismissal, calculating severance at 13 months' salary minus amounts already paid, resulting in a total award of $89,822.98. The plaintiff's claims for moral and aggravated damages were dismissed due to insufficient evidence linking the dismissal to health issues, and the defendant's counterclaim regarding a non-competition agreement was also dismissed.
P. c. Quadraspec Inc.
2014 ONCS 2431 (CanLII) · 2014-04-17This case involves a dispute regarding the cessation of employment, specifically focusing on the required notice period ('préavis'), salary entitlements, and benefits upon termination.
G. v. 1162540 Ontario Inc.
2013 ONSC 6574 (CanLII) · 2013-12-11Constructive Dismissal Appeal: 12 Months Notice
This appeal from a Small Claims Court decision addressed whether the Deputy Judge erred in finding the plaintiff was constructively dismissed due to withholding of wages and anticipatory breach. The Divisional Court reviewed the finding of constructive dismissal and the 12-month notice period, and the judgment against the individual defendant for personal liability.
L. v. TEKSmed Services Inc.
2013 ONSC 5543 (CanLII) · 2013-09-13A constructive dismissal case addressing issues of reasonable notice and the employee's duty to mitigate damages.
M. v. Raywal Limited Partnership
2013 ONCA 312 (CanLII) · 2013-05-09Wrongful Dismissal: Notice Reduced to 8 Months on Appeal
This is an appeal from a wrongful dismissal trial decision regarding reasonable notice and mitigation. The Court of Appeal partially allowed the appeal, reducing the notice period to 8 months due to the employee's unjustified refusal to return to work, while upholding the trial judge's finding of no consideration in the agreement.
B. v. Honda of Canada Mfg.
2013 ONSC 896 (CanLII) · 2013-02-06A wrongful dismissal case involving a dispute over the appropriate notice period and the calculation of damages. The case addresses the legal principles governing the extension of the notice period in the context of a termination claim.
H. v. Deloitte & Touche LLP
2012 ONCA 547 (CanLII) · 2012-08-22H. v. Deloitte: Forced Vacation During Notice
This was an appeal to the Court of Appeal from a motion judge's decision granting summary judgment to the employer. The employee sued for constructive dismissal or breach of contract after the employer allegedly directed him to take his vacation during his notice period following his resignation. The motion judge dismissed the claim. The Court of Appeal allowed the appeal, finding that the employer's vacation policy was ambiguous and required a trial to determine whether the employer had the right to mandate vacation during the notice period.
P. v. Whirlpool Corporation
2011 ONCA 808 (CanLII) · 2011-11-14Wrongful Dismissal: Bonus Entitlement During Notice Period
The Court of Appeal for Ontario heard an appeal from a motion judge's summary judgment decision in a wrongful dismissal case. The dispute centered on whether the respondent was entitled to a bonus during the 19-month notice period, given the employer's argument that eligibility required active employment on December 31. The Court upheld the summary judgment, finding the precondition unenforceable due to lack of communication or agreement, and confirmed the respondent's entitlement to the bonus.
S. and N. v. BGC Partners
2011 ONSC 3077 (CanLII) · 2011-06-01Withdrawal of Employment Admission Appeal
This is an interlocutory appeal concerning a motion to withdraw an admission regarding the plaintiff's length of employment. The central issue is whether the Master erred in applying the test for withdrawal of admissions under Rule 51.05, specifically balancing justice and expediency against the defendants' claim that the admission was factually incorrect due to inducement. The case also addresses whether solicitor-client privilege was waived by the affidavit filed in support of the motion.
F. v. T.
2010 ONCA 473 (CanLII) · 2010-07-05F. v. T.: 12-Month Notice Upheld for Wrongful Dismissal
This was an appeal to the Court of Appeal from an application judge's decision regarding a business dispute and a wrongful dismissal claim. The parties were former business partners who had an unwritten agreement for a 60/40 ownership split of two companies, and the applicant was also an employee. The application judge found the applicant had an ownership interest and had been wrongfully dismissed, awarding compensation and 12 months' pay in lieu of notice. The Court of Appeal allowed the appeal in part to strike out two specific financial compensation awards, but dismissed the rest of the appeal and the cross-appeal. The 12 months' notice period and other compensation awards were upheld.
W. v. Ritz Lutheran Villa
2010 ONSC 1867 (CanLII) · 2010-03-29Wrongful Dismissal: 13.5-Year Employee Awarded 10 Months Notice
A wrongful dismissal case where an employee with 13.5 years of service was terminated without notice or severance for allegedly violating employer policies by accompanying a resident on a cruise. The court found the termination unjustified due to inconsistent policy application and lack of progressive discipline, awarded 10 months' notice, and calculated damages of $28,159.03 based on wages, benefits, and mitigation efforts.
C. v. Computer Facility Services
2010 ONSC 1789 (CanLII) · 2010-03-25Wrongful Dismissal: CFO Claims Senior Status in Notice Period Dispute
A wrongful dismissal case where the plaintiff, claiming senior executive status as Chief Financial Officer, sought summary judgment for damages in lieu of notice. The court denied summary judgment, finding material disputes over the character of employment, responsibilities, and entitlement to benefits and allowances, necessitating a trial to resolve these issues.