How Much Severance Pay Are You Entitled to in Ontario?
When someone loses their job, one of the first questions they ask is how much severance pay they should receive.
In Ontario, the answer is rarely straightforward. Many employers provide an initial severance offer that reflects only the minimum standards required by the Employment Standards Act (ESA). However, employees may be entitled to significantly more under the common law.
Understanding the difference between ESA minimums and common law severance is the first step in determining whether a severance package is fair.
Severance Review
If you have received a severance package from your employer, it may be worth having the offer reviewed before signing a release. In many cases, initial offers reflect only the minimum standards under the Employment Standards Act.
Lecker & Associates regularly reviews severance packages for Ontario employees.
Call 416-223-5391 or email intake@leckerslaw.com to request a confidential assessment.
ESA vs Common Law Severance in Ontario
The Employment Standards Act sets out the minimum standards employers must follow when terminating employees. These statutory amounts represent the legal minimum an employer must provide.
However, the common law may provide employees with a greater entitlement depending on their individual circumstances.
ESA Minimums vs Common Law Severance
| ESA Minimum Standards | Common Law Severance |
| Governed by the Employment Standards Act | Developed through court decisions |
| Termination pay up to 8 weeks depending on length of service | Notice assessed based on the employee’s circumstances |
| Possible statutory severance up to 26 weeks if eligibility requirements are met | Often significantly higher than ESA minimums |
| Applies automatically unless valid contractual limits exist | Applies where employment contracts do not validly limit severance |
Factors That Affect Severance Pay in Ontario
Courts determine common law severance by considering several factors that affect how long it may reasonably take an employee to find comparable employment.
These factors often include:
• the employee’s age
• length of service
• the character of the employee’s position
• the availability of similar employment
Employees later in their careers may face a more limited job market, particularly in senior or specialized roles. Employees with long service may also experience greater disruption when transitioning to new employment.
Courts may also consider the employee’s responsibilities and labour market conditions at the time they are seeking new work.
Example Severance Scenario
Consider an employee who is 52 years old, worked for the same company for 12 years, and held a managerial position.
Under the ESA, that employee might receive termination pay of eight weeks and may qualify for statutory severance depending on the employer’s payroll.
However, under the common law, courts may consider the employee’s age, managerial role, and length of service when determining how long it might reasonably take them to find comparable work. In some cases, this assessment may result in severance that represents many months of compensation rather than the ESA minimum.
Each situation depends on the employee’s specific circumstances.
Signs Your Severance Offer May Be Too Low
In some situations, a severance offer may not reflect an employee’s full entitlement. This may occur where:
• the offer is based primarily on ESA minimum standards
• the employee held a managerial or specialized position
• the employee is over 45 and has significant length of service
• the employee was recruited from another employer
• the employee is being asked to sign a release quickly
Where one or more of these factors are present, it may be worthwhile to review the severance package before signing.
Severance Package Review
If you are unsure whether your severance offer reflects your full legal entitlement, it may be helpful to have the package reviewed by an employment lawyer before signing a release.
Lecker & Associates regularly advises Ontario employees on severance entitlements and wrongful dismissal matters.
Call 416-223-5391 or email intake@leckerslaw.com to request a confidential assessment.
Short Service Employees
Many employees assume that short service means little or no severance entitlement.
However, courts have recognized that even employees with a year or two of service may experience difficulty finding comparable employment. This may be particularly true where the employee was recruited into the role, left secure employment to join the company, or works in a specialized field.
For that reason, even employees with relatively short service may still be entitled to meaningful severance under the common law.
Why Severance Offers May Be Lower
Employers frequently structure severance offers around ESA minimum standards.
While these offers may appear reasonable, ESA amounts represent minimum legal requirements only. Depending on the employee’s circumstances, common law severance may be significantly higher.
For employees in senior roles, specialized positions, or difficult job markets, the difference between ESA minimums and common law severance can be substantial.
Before You Sign a Release
Severance offers typically include a deadline and a release.
Once a release is signed, employees generally give up the right to pursue additional compensation relating to the termination.
For that reason, it is often advisable to review a severance package carefully before signing.
How Lecker & Associates Can Help
For over 40 years, Lecker & Associates has advised Ontario employees on severance entitlements and wrongful dismissal matters.
If you have been terminated from your job in Ontario, reviewing your severance package before signing a release can help determine whether the offer reflects your full legal entitlement.
Call 416-223-5391, email intake@leckerslaw.com, or book a no-charge assessment.
Ontario Severance FAQ’s
Severance in Ontario is not determined by a fixed formula under the common law. Courts assess factors such as age, length of service, the nature of the employee’s role, and the availability of comparable employment when determining reasonable notice.
Employers often base severance offers on ESA minimum standards. While those amounts represent the legal minimum, employees may be entitled to more under the common law depending on their circumstances.
Yes. Even employees with relatively short service may be entitled to several months of compensation under the common law depending on the circumstances.
Severance offers usually include deadlines, but employees are not required to sign immediately. Once a release is signed, employees generally give up the right to pursue additional compensation relating to the termination.
Testimonials from Employees Like You
Breathe Easy, We’ve Got This
Book a confidential interview with our trained intake staff. If you have an urgent matter, please call our Ontario employment law firm at 416-223-5391 or message us via the chat button (bottom right), and our team will contact you as soon as possible.
Book a Consultation
We’ll Contact You to Confirm
Reputation Matters
Top-Rated
Toronto Employment Lawyers
Our cases and commentary feature prominently in national media, promoting workplace fairness
