Wrongful Dismissal in Ontario: Severance, Notice & Your Rights

What Is Wrongful Dismissal?

Wrongful dismissal does not mean your employer had no right to let you go. In Ontario, employers can terminate anyone without cause — but they must provide adequate notice or pay in lieu of notice. Wrongful dismissal occurs when:

• The employer fails to give required notice or payment
• The notice given is less than what you're entitled to under the ESA or common law
• The circumstances amount to constructive dismissal (see below)

ESA Minimums: What the Law Guarantees

The Employment Standards Act, 2000 (ESA) sets the floor — not the ceiling — for termination entitlements:

ESA Severance Pay is separate from termination pay and applies only if you have 5+ years of service AND the employer has a payroll of $2.5 million+ or severed 50+ employees in a 6-month period. Severance = 1 week per year of service, capped at 26 weeks.

Common Law Notice: Often Much More

Unless you signed a valid employment contract that limits you to ESA minimums, courts apply common law reasonable notice — which considers:

• Age (older employees get more)
• Length of service
• Character of employment (senior/specialized roles get more)
• Availability of similar employment

The so-called Bardal factors can result in 1–24 months of notice for long-service, senior employees. For a 45-year-old manager with 12 years of service, ESA gives 8 weeks; common law may give 14–18 months.

Constructive Dismissal

If your employer significantly changes the terms of your employment without your consent, you may be able to treat yourself as dismissed — even without a formal termination. Examples:

• Major pay cut (generally more than 10–15%)
• Unilateral demotion or removal of core responsibilities
• Forced relocation to a different city
• Toxic/poisoned work environment the employer created

Constructive dismissal is complex — you must resign and then claim you were effectively dismissed. Getting advice before you resign is critical.

Your Options After Termination

1. Review your termination letter and employment contract carefully — especially any limitation clause.
2. Do not sign any release until you have obtained independent legal advice.
3. File an ESA complaint with the Ministry of Labour (free, handles ESA minimums only).
4. Negotiate directly with the employer for an improved package.
5. File in Small Claims Court (up to $35,000) or Superior Court for larger amounts.

Mitigation: You Must Look for Work

After dismissal, you have a legal duty to mitigate your losses by actively seeking comparable employment. Courts can reduce your damages if you fail to make reasonable efforts. Keep records of every job application.