In Ontario, when an employee is terminated, the employer is legally required to provide certain entitlements under the Employment Standards Act, 2000 (ESA).
These entitlements include:
Minimum Termination Notice/Pay & Severance Pay: If an employee is terminated without cause, the employer must provide a minimum amount of written notice of termination or pay in lieu according to the Employment Standards Act, 2000 of 1 – 8 weeks based on the employee’s length of service. In addition, they are entitled to severance pay as defined in the Employment Standards Act, 2000. Eligible employees who have worked for an employer whose payroll is $2.5 million for 5 or more years are entitled to severance pay, and which can be up to 26 weeks’ wages.
Common Law Severance Package: This is the termination pay that most people refer to as a “severance package” and which is generally significantly more than the minimum termination notice/pay and severance pay required by the Employment Standards Act, 2000. This notice, which can be provided as pay or a combination of notice and pay, is based not only on length of service, but an employee’s age, position, compensation and the availability of similar work in the marketplace.
Outstanding wages: Employers must pay all outstanding wages, including regular wages, overtime, vacation pay and any other payments owed to the employee, on or before the employee’s regularly scheduled payday.
Benefits continuation: In some cases, employees may be entitled to the continuation of certain benefits, such as health and dental coverage, for a specific period after termination. This depends on the terms of the employee’s benefit plan and employment contract.
Record of Employment (ROE): Employers are required to issue an ROE to the terminated employee within 5 calendar days of their last working day. The ROE is required to apply for employment insurance (EI) benefits.
It’s important to note that employment contracts and collective agreements may modify the termination entitlements, so it’s advisable for both employers and employees to seek legal advice when there is a dispute over entitlements following termination.
Visit our website for more information on entitlements for employees who have been terminated.
