Am I Entitled to Severance Pay in Ontario? A Vanguard Law Guide for Employees
If you have just lost your job—or sense that termination is around the corner—one of the first questions is, “Do I qualify for severance pay?” In Ontario, the answer depends on several factors, including how long you worked, the size of your employer, and the circumstances of your dismissal. This article breaks down the rules in plain language and explains how Vanguard Law can help you secure every dollar you deserve.
1. What Exactly Is Severance Pay?
Severance pay is compensation meant to cushion long-serving employees when their employment ends through no fault of their own, such as a lay-off or a termination without cause. It is different from termination pay, which simply replaces the advance notice an employer should have provided. In many cases, an employee can receive both.
2. Statutory Severance Under the Employment Standards Act (ESA)
Under Ontario’s Employment Standards Act, 2000 (ESA), severance pay is mandatory only when all of the following apply:
Length of service
5 years or more of continuous employment
Employer size
Global payroll of ≥ $2.5 million or a permanent discontinuance affecting ≥ 50 employees within 6 months
Reason for termination
Dismissal without cause or a mass lay-off
How much is owed? One week of regular wages for every completed year of service, pro-rated for partial years, up to 26 weeks.
3. Common-Law (Wrongful-Dismissal) Severance - Often Much Higher
Even if you do receive your ESA minimum, you may be entitled to additional, judge-made compensation often called “reasonable notice” or “common-law severance.” Courts weigh many factors, but four (the Bardal factors) carry the most weight:
Length of service
Age of the employee
Character of the position (seniority, specialization, level of responsibility)
Availability of comparable work in the marketplace
Depending on these factors, reasonable notice can reach—or exceed—a month per year of service, and lengthy senior-management roles often attract even more.
4. What If You Were Fired “For Cause”?
Employers sometimes allege just cause to avoid paying severance. In practice, courts set a high bar: misconduct must be serious, willful, and undermining of the employment relationship. Many so-called “cause” terminations fail under scrutiny, opening the door to full severance entitlements.
5. Can You Trust Online Severance Calculators?
Online tools can provide a rough range, but they cannot account for industry-specific conditions, employment-contract clauses, or the evolving caselaw that shapes reasonable notice. A short consultation with an employment lawyer almost always yields a more accurate—and often higher—assessment.
6. Practical Steps If You Receive a Severance Package
Pause before signing. Most offers come with a release that eliminates your right to claim more.
Gather documents. Employment contract, offer letter, termination letter, bonus plans, benefits summaries, performance reviews.
Schedule a legal review. Vanguard Law can assess whether the package meets or falls short of both ESA and common-law standards.
Negotiate strategically. Employers expect some push-back; well-supported counter-proposals often lead to better outcomes.
7. How Vanguard Law Can Help
Vanguard Law focuses exclusively on Ontario employment law. We will:
Review your severance offer against ESA minimums and current court precedents
Value your common-law entitlement using up-to-date case databases
Negotiate firmly but pragmatically with your former employer
Litigate when necessary to obtain full compensation
Book a confidential consultation today