Can your employer terminate you without cause? The short answer is yes, employers in Ontario have the right to terminate an employee on a “without cause” basis. However, there are limits: an employer cannot terminate an employee as retaliation or for discriminatory reasons per the Ontario Human Rights Code. If this happens, the termination is illegal, and you may be entitled to compensation.
What does “Without Cause” mean?
If you are terminated without cause, you have not done anything erroneous to warrant the termination. Termination without cause can be because of company restructuring, the employer’s finances, poor work performance, or simply because you are not a right fit for the company.
A without cause dismissal requires your employer to give reasonable notice of termination. This constitutes working notice or pays in lieu of notice. Working notice is the amount of time you must continue to work until a given date. In contrast, pay in lieu of notice is when you are given termination pay because no or less notice was given. In addition to termination, pay is severance, which compensates you for the losses associated with your termination.
Without cause Termination Entitlements?
A without cause termination warrants entitlements. Depending on your employment contract and termination clause, you can be entitled to the Employment Standards Act (ESA) minimums, and/or common law reasonable notice. To be eligible for severance under the ESA, you must have worked for your employer for five (5) years or more, and are one of fifty (50) or more employees who have had their employment severed within a six (6) month period, and your employer has a payroll of $2.5 million or more.
If the above is satisfied, an employee is entitled to one (1) week’s pay per year of service for a maximum of twenty-six (26) weeks. This is your minimum ESA right which is in addition to any common law entitlements.
Common law severance is measured using factors such as an employee’s age, length of service, position, salary, benefits, and the likelihood of finding new, comparable employment.
Signing Termination Papers:
After you’re fired, your employer typically stamps a due date to sign your termination and/or severance letter. Additionally, you may be given enhanced severance for signing on time. While this is enticing, remember that you have no legal obligation to accept an offer by the deadline. In Ontario, an employee has two (2) years to pursue their rights. This means that it is more important to speak to an employment lawyer to ensure that your offer is fair and favourable.