Ontario Severance

Termination of Employment — Ontario Employment Law

66 casesDecisions from 1927–2025

About Termination of Employment

The termination of employment marks the legal end of the relationship between an employer and an employee in Ontario. While many people associate this with being 'fired,' the process can unfold in several distinct ways, each with its own set of rules and entitlements. Understanding these distinctions is the first step for any worker navigating this challenging event.

The most common form is a termination 'without cause.' In this scenario, an employer can end your employment for almost any business reason, as long as it is not discriminatory under the Ontario Human Rights Code (OHRC). However, this right comes with a crucial obligation: the employer must provide you with either advance written notice of the termination, pay in lieu of that notice, or a combination of both. The minimum amount of notice or pay is set by the Employment Standards Act, 2000 (ESA). For many employees, particularly those with longer service, the common law may provide for a significantly longer 'reasonable notice' period. This is often the central issue in wrongful dismissal claims.

Less common is a termination 'for cause.' This is when an employer terminates an employee for serious misconduct, such as theft, fraud, or serious insubordination, without providing any notice or pay in lieu. The legal bar for establishing 'just cause' is extremely high, and employers who fail to meet it may be found to have wrongfully dismissed the employee.

Employment can also end through an employee's resignation or through a legal doctrine called 'frustration of contract,' which may occur if an employee becomes permanently unable to work due to a long-term illness or disability. Even in these cases, an employer's duties, especially the duty to accommodate under the OHRC, remain a critical consideration. Because the facts surrounding a termination dictate your rights and potential entitlements, having your specific situation assessed by a legal professional can provide crucial clarity.

Frequently Asked Questions

What is the difference between being laid off and being terminated in Ontario?

A termination is a permanent end to the employment relationship. A temporary layoff under the Employment Standards Act, 2000 (ESA) is a temporary interruption of work. However, if a layoff exceeds the time limits set by the ESA or if your contract doesn't permit layoffs, it can be treated as a termination.

Can my employer fire me for no reason at all in Ontario?

Yes, this is called a termination 'without cause.' Your employer can terminate your employment for business reasons, but they must provide you with proper notice or pay in lieu of notice, according to the ESA and potentially the common law. They cannot, however, terminate you for discriminatory reasons.

Do I have to sign my termination papers or severance offer right away?

No, you are not required to sign anything immediately. These documents often contain a 'release' that prevents you from seeking further compensation. It is highly advisable to have any termination offer reviewed by an employment lawyer before you sign.

How much notice is my employer required to give me?

The Employment Standards Act, 2000 sets out the minimum notice period based on your years of service. However, you may be entitled to a longer 'reasonable notice' period under common law, which considers factors like your age, role, salary, and length of service.

What happens to my benefits after my employment is terminated?

During the statutory notice period under the ESA, your employer must continue your benefit contributions. If you are entitled to a longer common law notice period, you are generally entitled to compensation for the value of those lost benefits for the full duration of that period.

Is there a deadline to sue for wrongful dismissal after being terminated?

Yes. In Ontario, you generally have two years from the date of your termination to file a civil lawsuit for wrongful dismissal, as per the Limitations Act. It is critical to act promptly to ensure you do not miss this deadline.

My termination feels unfair, but they gave me some pay. When should I talk to a lawyer?

You should consider speaking with a lawyer as soon as possible, especially if the offer seems low or you suspect the reason for termination was discriminatory. An initial offer from an employer often only covers the minimums required by the ESA, and you may be entitled to significantly more under common law.

Common Scenarios

  • A marketing manager with 12 years of service is terminated during a company-wide 'restructuring' and offered 8 weeks' pay, the statutory minimum.
  • An employee is fired 'for cause' due to alleged poor performance, despite having received positive performance reviews in the past and no formal warnings.
  • A construction worker is told their employment is ending because the company's project has concluded, and they are not offered any notice or termination pay.
  • An administrative assistant on a one-year fixed-term contract is let go after six months with no explanation or payout for the remainder of the contract term.
  • An employee quits after their employer unilaterally cuts their salary by 25%, believing they have no choice but to leave.

What You Should Know

  • Never sign a termination offer or 'Full and Final Release' document on the spot. Always take it home and seek legal advice to understand what rights you may be signing away.
  • Gather and preserve all relevant employment documents, including your employment contract, pay stubs, performance reviews, and any written correspondence about your termination.
  • Understand the key difference between your minimum entitlements under the Employment Standards Act, 2000 (like termination and severance pay) and your potentially greater entitlements to common law reasonable notice.
  • If you believe your termination was connected to your age, disability, family status, or another protected ground, document the reasons for your suspicion and consult a lawyer about a potential Human Rights Code violation.
  • Be mindful of the strict two-year limitation period to commence a lawsuit for wrongful dismissal in Ontario, which starts from the date your employment was terminated.

Featured Cases

T. v. Aurora Hotel Group

2025 ONSC 703 (CanLII) · 2025-01-31

Termination: Substantial Indemnity Costs for ESA Breaches

This is a costs ruling in a wrongful dismissal case where the plaintiff's employment was terminated without written notice or timely payment of statutory entitlements. The court determined that the defendants' egregious conduct in the termination process and their breaches of the Employment Standards Act, 2000, justified an award of substantial indemnity costs to mark the court's disapproval.

employment standards substantial indemnity costs termination of employment wrongful dismissal

A. v. Torstar et al.

2022 ONSC 4447 (CanLII) · 2022-07-28

Workplace Discrimination: Claim Struck Due to Release

This is an interlocutory proceeding where the defendants moved to strike the plaintiff's statement of claim. The plaintiff alleged racial discrimination and breach of contract following termination, but the court found the claim disclosed no reasonable cause of action, partly because a signed release agreement barred the discrimination claim.

release agreements striking pleadings termination of employment workplace discrimination

W. v. Cornwall Police Service

2021 ONSC 8046 (CanLII) · 2021-12-07

Police Officer Dismissal: Stay of Judicial Review

This is an interlocutory motion for a stay of proceedings pending judicial review of an OCPC dismissal decision. The Divisional Court considered whether to grant a stay under the RJR MacDonald test and interpreted the Police Services Act and Statutory Powers Procedure Act regarding automatic stays. The court found no automatic stay under the SPPA and applied a reasonableness standard of review for the underlying discipline decisions.

administrative law judicial review police dismissal stay of proceedings termination of employment

W. v. United Lands Corporation Limited

2019 ONSC 3623 (CanLII) · 2019-06-28

Unpaid Commissions: Verbal Agreement & Quantum Meruit

This case concerns a dispute over unpaid commissions and remuneration following the termination of the plaintiff's engagement with the defendants. The plaintiff alleged a verbal agreement for a 2% commission or $220,000 per annum, but the court found no enforceable agreement, deeming the alleged contract fabricated. The court awarded commissions based on a 1.5% industry standard for Phase I work and partial commission for Phase II, applying quantum meruit principles, while dismissing the claim for technical audit work due to a lack of contemporaneous evidence.

oral agreement quantum meruit termination of employment unpaid commissions

K. v Lanark County

2017 ONSC 4157 (CanLII) · 2017-07-06

This is a wrongful dismissal case involving a dispute over reasonable notice following a summary dismissal. The court addressed the appropriate notice period for the employee terminated by Lanark County.

reasonable notice summary dismissal termination of employment wrongful dismissal

S. v Ontario (Treasury Board)

2017 ONSC 993 (CanLII) · 2017-02-09

S. v Ontario: Frivolous Employment Claim Dismissed

This is an interlocutory proceeding where the court reviewed the plaintiff's statement of claim under Rule 2.1.01 of the Rules of Civil Procedure. The court addressed whether the claim, which included allegations regarding the termination of government employment, was frivolous, vexatious, or an abuse of process, and determined if the matter fell within the jurisdiction of the Ontario Labour Relations Board rather than the Superior Court of Justice.

abuse of process civil procedure frivolous claims labour relations board termination of employment

M. v Canada (Attorney General)

2016 ONSC 1862 (CanLII) · 2016-04-26

M. v Canada: Security Clearance Termination Jurisdiction

This is an interlocutory motion to dismiss ruling concerning a former CSIS employee whose employment was terminated following the revocation of their top secret security clearance. The court addressed whether section 236(3) of the Public Service Labour Relations Act (PSLRA) precluded a common law action for wrongful dismissal and determined that administrative remedies under CSISA were discretionary rather than mandatory. The motion to dismiss was denied, allowing the plaintiff to proceed with their claim.

administrative remedies public service labour relations act security clearance termination of employment wrongful dismissal

M. v Kiewit Alarie A Partnership

2016 ONSC 2517 (CanLII) · 2016-04-14

Employment Termination: Supplementary Affidavits Motion

This is an interlocutory motion concerning the admissibility of supplementary affidavits in a civil action arising from an employment termination. The plaintiff, who had grieved his termination through union arbitration, sought to strike affidavits filed by the defendants after a Rule 39.03 examination. The court held that the affidavits were proper as they responded to primary evidence raised during the examination and found no abuse of process.

civil procedure collective agreements supplementary affidavits termination of employment union grievance

R. v. Freightliner Canada Inc.

2015 ONSC 1811 (CanLII) · 2015-03-19

Wrongful Dismissal: Sufficiency of Pleadings and Limitations

This is an interlocutory proceeding concerning the sufficiency of pleadings in a wrongful dismissal action brought by an employee terminated for alleged poor performance. The court applied a purposive and factually-oriented approach to determine that the statement of claim sufficiently pleaded the wrongful dismissal claim without needing explicit labeling, and that the Reply did not introduce a new cause of action barred by the Limitations Act, 2002.

limitation periods pleadings termination of employment wrongful dismissal

F. v. Royal Glen Eagle

2014 ONSC 7522 (CanLII) · 2014-12-17

Severance Deductibility from Tort Damages

This case addresses whether severance payments received by an employee upon termination should be deducted from damages for loss of income in a related tort claim for workplace injury. The court analyzed whether the severance package constituted consideration for surrendering employment rights and whether it fell under the private insurance exception to the rule against double recovery. The defendant bore the onus of proving deductibility but lacked evidence regarding the negotiations, leading to the conclusion that the payments were not deductible.

damages double recovery severance pay termination of employment

O. v. Purolator Courier Ltd.

2014 ONSC 3266 (CanLII) · 2014-07-03

Workplace Harassment: Summary Judgment Denied

This is a summary judgment motion involving plaintiffs who alleged their termination was linked to complaints of sexual harassment and criminal conduct by a fellow employee. The court dismissed the motion for summary judgment, finding genuine issues requiring trial regarding the enforceability of signed releases and the scope of the employer's vicarious liability for workplace harassment.

summary judgment termination of employment vicarious liability workplace harassment

C. v. Easy Plastic Containers Limited

2014 ONSC 3666 (CanLII) · 2014-06-19

Claim Dismissed: Just Cause Established

This wrongful dismissal case addressed whether the employer had just cause to terminate the plaintiff based on cumulative misconduct and breach of trust. The court applied the McKinley contextual approach and found that just cause was established, thereby dismissing the claim for reasonable notice and damages.

cumulative misconduct just cause termination of employment wrongful dismissal

K. v. 1416088 Ontario Ltd

2014 ONSC 2491 (CanLII) · 2014-04-22

This is a wrongful dismissal case involving a dispute over damages following the termination of employment. The legal issues include the calculation of damages for dismissal and the application of pre-judgment interest.

damages pre-judgment interest termination of employment wrongful dismissal

Kotecha v. Affinia

2013 ONSC 6639 (CanLII) · 2013-10-24

Termination: Costs & Prejudgment Interest Ruling

This is a costs ruling in a wrongful dismissal case where the plaintiff was terminated without adequate notice. The court addressed whether substantial indemnity costs should apply throughout the litigation or only after an offer to settle, and determined that prejudgment interest should be awarded from the date of inadequate notice rather than the last day of employment.

pre-judgment interest substantial indemnity costs termination of employment wrongful dismissal

Power Tax v. M., D.

2013 ONSC 135 (CanLII) · 2013-01-07

Abuse of Process: HRTO Jurisdiction vs. Court Application

This is an interlocutory proceeding concerning an application by an employer to declare the termination of an employee's employment for valid business reasons. The employee, alleging discrimination based on sex and maternity leave, sought to stay the application as an abuse of process due to a pending human rights complaint before the HRTO. The court addressed whether the simultaneous litigation constituted an abuse of process and whether the HRTO had jurisdiction to determine if the termination violated the Human Rights Code.

abuse of process discrimination human rights stay of proceedings termination of employment

K.H. v. Buckham Transport Ltd.

2011 ONSC 4118 (CanLII) · 2011-06-29

This is a wrongful dismissal case involving a dispute over whether the employer had just cause to terminate the employee's employment.

damages termination for cause termination of employment wrongful dismissal

J.T. v. Northern Nishnawbe Education Council

2011 ONSC 3184 (CanLII) · 2011-05-27

J.T. v. Northern Nishnawbe Education Council

This is a termination dispute involving an employee, T., who was dismissed by the Northern Nishnawbe Education Council. The central legal issue is whether the employer had just cause for the dismissal, with defamation allegations also present in the pleadings.

defamation just cause termination of employment wrongful dismissal

M. v. Nishnawbe-Aski Police Service

2010 ONSC 163 (CanLII) · 2010-01-12

This is a judicial review proceeding concerning the dismissal of a First Nation citizen from the Nishnawbe-Aski Police Service. The Divisional Court reviewed the administrative decision regarding the termination.

administrative law dismissal judicial review termination of employment

W., et al v. Bomar Alarms Ltd., et al

2010 ONSC 273 (CanLII) · 2010-01-10

Wrongful Dismissal: Notice Period Reduced Due to Mitigation Failure

A wrongful dismissal case involving a long-term middle management employee who was dismissed for alleged theft, with the allegation unproven. The court extended the notice period to 24 months but reduced it to six months due to the plaintiff's failure to mitigate damages. The case also addresses the framework for assessing notice periods and mitigation in wrongful dismissal cases.

constructive dismissal mitigation notice period termination of employment wrongful dismissal

M. v. Scotia Capital Inc.

2009 CanLII 64183 (ON SC) · 2009-11-18

Wrongful Dismissal: Reasonable Notice for 30-Year Employee

A wrongful dismissal case involving a plaintiff employed for over 30 years who was terminated at age 58. The court considered whether 24 months’ notice was appropriate under the Bardal factors and whether Wallace/Keays damages were available for economic loss absent bad faith. The defendant initially offered 18 months’ notice, later extended to 24 months. The court also addressed the fairness of a discretionary bonus awarded in 2006.

bad faith discretionary bonuses reasonable notice termination of employment wrongful dismissal