Ontario Layoffs and Severance: What Employees Should Know in 2026 

Recent public-sector job cuts and layoffs across Canada have raised serious concerns for many workers. For employees in Ontario, layoffs can create immediate questions about severance pay, employment rights, and financial security. 

If you have received a layoff notice or severance offer, it is important to understand your legal rights before signing anything. 

Severance Pay After Being Laid Off in Ontario 

Employees who lose their job in Ontario may be entitled to two types of compensation: 

1. Employment Standards Act (ESA) minimum entitlements 

The ESA requires employers to provide termination pay based on length of service. Some employees may also qualify for statutory severance pay. 

However, these minimums are often only a starting point. 

2. Common Law Reasonable Notice 

In many cases, employees are entitled to significantly more compensation under the common law. 

Courts determine reasonable notice based on factors including: 

• Age 
• Length of service 
• Position and level of responsibility 
• Availability of comparable employment 

For mid-career and senior professionals, severance can sometimes reach several months of compensation. 

Why Older Employees Often Receive Higher Severance in Ontario

Courts recognize that employees in their 50s or 60s may face a more difficult job market, particularly in specialized roles. 

Because of this, older workers are often awarded longer notice periods when determining severance. 

This is particularly relevant during large-scale layoffs where many professionals may be competing for similar roles. 

Early Retirement Packages and Severance 

Employers sometimes offer early retirement incentives during layoffs or restructuring. 

While these offers may appear attractive, they often require employees to sign a release, which prevents them from pursuing further legal claims. 

Before accepting an early retirement package, it is important to consider: 

• Whether the offer reflects your true severance entitlement 
• How pension benefits are calculated 
• Whether you are giving up the right to additional compensation 

What to Do If You Are Laid Off in Ontario 

If you receive a layoff notice: 

1. Do not sign the severance agreement immediately. 

2. Request your termination letter and Record of Employment. 

3. Apply for Employment Insurance as soon as possible. 

4. Have the severance package reviewed by an employment lawyer. 

Many employees accept the first offer presented by their employer without realizing they may be entitled to significantly more. 

Speak With a Toronto Employment Lawyer 

If you have been laid off or received a severance offer, legal advice can help you understand your options. 

For more than 40 years, Lecker & Associates has represented employees across Ontario in wrongful dismissal and severance matters. 

Call 416-223-5391, email intake@leckerslaw.com, or book a free assessment today.