Moving to another city or province for a new job can mean leaving secure employment, taking on moving expenses and making significant financial commitments. But what happens if your new employer lays you off shortly after you relocate?
Employees who relocate for work and are subsequently laid off may have legal rights beyond their employer’s initial termination offer. In Ontario, the circumstances surrounding recruitment, the employment contract and the availability of comparable employment may affect an employee’s entitlement to common law reasonable notice.
Relocating does not automatically increase severance pay or entitle an employee to reimbursement for moving expenses. However, promises made during recruitment, inducement and relocation agreements may raise additional legal considerations.
Note: Employment rights vary across Canada. This article focuses on Ontario employment law. If you relocated for a job in another province or territory, your termination and severance entitlements may be different. The applicable rules depend on your employment circumstances and whether your employment is provincially or federally regulated.
Does Relocating for a Job Affect Severance Pay in Ontario?
Relocating for employment does not automatically entitle an employee to additional severance pay. However, the circumstances leading to the move may be relevant when assessing the employee’s rights following termination.
Important considerations may include:
- Whether the employer actively recruited the employee from secure employment.
- Whether the employee left a long-term position to accept the new job.
- Whether the employer made representations about job security, compensation or career advancement.
- The employee’s age, position, experience and availability of comparable employment.
- Whether the employment contract contains an enforceable termination clause.
- Whether the employer agreed to reimburse relocation expenses or made other commitments connected to the move.
An employee who independently applied for a position may have different legal considerations from someone who was actively persuaded to leave secure employment. However, both employees may have rights following termination. Learn more about severance pay in Ontario and the factors that may affect your entitlement.
What If You Relocated for a Job in Another Province?
Employees across Canada may face similar challenges when they relocate for a new job and are laid off shortly afterward. However, employment standards and termination entitlements differ between provinces and territories.
For example, Ontario employees may have rights under the Employment Standards Act, 2000 and, where applicable, common law reasonable notice. Employees working in other provinces may be subject to different employment standards legislation and legal considerations.
If you moved from another province to work in Ontario, Ontario employment law may apply to your termination. If you relocated to work elsewhere in Canada, you should review the employment laws applicable to your situation and consider seeking advice from an employment lawyer practising in the relevant jurisdiction.
Federally regulated employees, including those working in certain industries such as banking, airlines and interprovincial transportation, may be subject to federal employment legislation rather than provincial employment standards.
What If You Were Recruited Away From a Secure Job?
When an employer persuades an employee to leave secure employment for a new position, the circumstances of that recruitment may affect the employee’s entitlement to common-law reasonable notice. This is known as inducement.
In W. v. United Grain Growers Ltd., [1997] 3 SCR 701, the Supreme Court of Canada recognized that inducement may lengthen the reasonable notice period. At paragraph 85, the Court emphasized that the significance of inducement depends on the circumstances of the particular case.
Relevant factors may include who initiated the recruitment, whether the employer made assurances about long-term employment, the incentives offered and how long the employee remained in the new position.
However, ordinary recruitment does not automatically establish inducement. The employee’s decision to accept a new position must be considered in the context of the recruitment process and the representations made.
Andrew Monkhouse discussed this principle in Hired Away, Then Terminated: Inducement Promises Made, Then Broken.
Can You Receive Severance After Only a Few Months of Employment?
Depending on the circumstances, employees may have rights to compensation following termination even after a short period of employment.
Under Ontario’s ESA, employees generally become entitled to statutory notice of termination or termination pay after completing three months of continuous employment, subject to applicable exceptions. An employee who has worked for at least three months but less than one year is generally entitled to one week’s notice or termination pay.
However, these are minimum statutory requirements. Where common-law reasonable notice applies, an employee may be entitled to a longer notice period, even after only a few months of employment. An enforceable employment contract may limit that entitlement.
For employees who left secure employment after being recruited, inducement may be an additional consideration when determining reasonable notice.
Learn more about severance rights for short-service employees in Ontario.
What If Your Employer Promised Long-Term Employment?
Before accepting a position that requires relocation, an employee may receive assurances about job security, career advancement or the employer’s long-term plans.
Whether these representations have legal significance depends on what was communicated, the circumstances surrounding the discussions and whether the employee relied on the statements when accepting the position.
Not every statement about future employment creates an enforceable promise. However, significant representations made during recruitment may be relevant to an inducement argument or, in certain circumstances, a separate legal claim involving misrepresentation.
Employees should retain written job offers, recruitment emails and other communications concerning the position, particularly where those representations influenced their decision to relocate.
Can You Recover Moving Expenses If Your Employment Ends?
Relocating for a new job may involve moving expenses, temporary accommodation, transportation costs and financial commitments related to housing.
Being terminated after relocating does not automatically require an employer to reimburse these expenses. Whether an employee may recover relocation-related losses depends on the employment agreement, any relocation arrangements and the circumstances surrounding the recruitment.
Misleading Representations During Recruitment
In Q. v. Cognos Inc., [1993] 1 SCR 87, the Supreme Court of Canada considered negligent misrepresentation during the hiring process. The employee had accepted a new position after receiving misleading information about the nature and security of the employment opportunity.
The Court upheld a finding of negligent misrepresentation, recognizing that inaccurate representations made during recruitment may give rise to liability where the applicable legal requirements are established.
The decision does not create an automatic entitlement to moving expenses following termination. A potential claim depends on the representations made, the employee’s reliance on them and the losses that resulted.
Monkhouse Law examines this decision in Luring an Employee Away From Secure Employment Can Be Costly for Employer.
How Does Your Employment Contract Affect Your Severance?
An employment contract may contain provisions addressing termination, probationary periods, relocation allowances, signing bonuses or repayment obligations.
Some contracts attempt to limit an employee’s termination entitlements to the minimum amounts required under the ESA. Whether these provisions are enforceable depends on their wording and the applicable law.
Employees should not assume that a termination clause is enforceable simply because they signed the agreement. Equally, relocating for employment does not automatically invalidate a contractual limitation.
Before accepting a termination package, employees should consider having their employment agreement reviewed to determine whether additional compensation may be available.
What Is the Difference Between Termination Pay and Severance Pay?
In Ontario, termination pay and severance pay are distinct statutory entitlements, although the term severance is often used more broadly to describe compensation provided when employment ends.
ESA Termination Pay
Termination pay is generally provided when an employer ends an eligible employee’s employment without giving the required statutory notice of termination.
The amount generally depends on the employee’s length of service, subject to applicable statutory requirements and exceptions.
See the Ontario government’s guide to termination of employment.
ESA Severance Pay
Statutory severance pay is a separate entitlement. Generally, an employee must have at least five years of employment with the employer and the employer must meet the applicable payroll threshold or qualifying business-closure requirements.
An employee who has worked for a new employer for only a few months will generally not qualify for statutory severance pay based solely on that short period of employment.
See the Ontario government’s guide to severance pay.
Common Law Reasonable Notice
Where common law reasonable notice applies, courts consider factors including age, length of service, character of employment and the availability of comparable employment.
In appropriate circumstances, employer inducement may also affect the assessment. The amount of reasonable notice depends on the individual circumstances and any enforceable contractual limitations.
What Should You Do If You Are Laid Off After Relocating?
If you have been terminated after moving for a new job, consider taking the following steps before accepting a termination package:
- Review your employment agreement. Check the termination provisions and any agreements concerning relocation expenses, signing bonuses or repayment obligations.
- Preserve recruitment communications. Keep job offers, emails and messages discussing compensation, job security or career advancement.
- Document relocation expenses. Retain receipts and records of moving costs, accommodation and other expenses connected to accepting the position.
- Review your termination package. Consider whether the amount offered reflects your potential statutory and common-law entitlements.
- Apply for Employment Insurance promptly. If eligible, apply through Service Canada rather than waiting for your Record of Employment.
- Seek legal advice before signing a release. Accepting a settlement may affect your ability to pursue additional compensation.
What If Your Existing Employer Requires You to Relocate?
Accepting a new job that requires relocation is different from an existing employer directing an employee to move to another location.
Where an employer imposes a significant change to an employee’s work location, the circumstances may raise questions about constructive dismissal.
Learn more about job relocation and constructive dismissal in Ontario.
Speak With an Ontario Employment Lawyer About Your Severance Rights
If you relocated for a new job and were subsequently terminated, your legal entitlements may depend on more than your length of service with the new employer.
Monkhouse Law represents employees in Ontario wrongful dismissal and severance matters. Our employment lawyers can review your employment agreement, the circumstances surrounding your recruitment and relocation, and the termination package you have been offered.
Complete the contact form below to request a free 30-minute phone consultation with Monkhouse Law to discuss your employment rights.