In Ontario, employers often use terms like “restructuring,” “downsizing,” “reorganization,” “position elimination,” or “workforce reduction” when ending employment. However, calling a termination a restructuring does not remove an employee’s right to severance.
If your job was terminated due to restructuring in Ontario, you may still be entitled to termination pay, statutory severance pay, common law reasonable notice, benefits continuation, bonus compensation, and other amounts depending on your situation.
This is especially important for non-unionized employees in senior, managerial, technical, professional, or specialized roles.
What Does Termination Due to Restructuring Mean?
Termination due to restructuring usually means your employer says your role is ending because of business changes rather than misconduct.
Common examples include:
- Department restructuring
- Budget cuts or cost-saving measures
- Mergers or acquisitions
- Automation or outsourcing
- Position elimination
- Company-wide layoffs
- Changes in business strategy
In most cases, this is a termination without cause. That means you have not done anything wrong, but your employer has decided to end your employment.
Are You Entitled to Severance After a Restructuring?
Yes. A restructuring does not mean your employer can avoid paying severance.
If you are a non-unionized employee in Ontario, you may be entitled to more than the minimum amount offered by your employer. Your severance package may include:
- Termination pay
- Statutory severance pay
- Common law reasonable notice
- Continuation of benefits
- Vacation pay
- Bonus, commission, RSU, or stock compensation
Ontario’s Employment Standards Act, 2000 sets minimum termination entitlements. However, many employees are owed more under common law.
To learn more, see our guide to severance pay in Ontario.
How Much Severance Can You Get After a Restructuring?
The amount of severance you may be owed depends on several factors, including:
- Your age
- Your length of service
- Your position and seniority
- Your salary and total compensation
- Whether you received bonuses, commissions, RSUs, or stock options
- The availability of similar employment
- Whether your employment contract has an enforceable termination clause
For some employees, the ESA minimums may only provide a few weeks of pay. However, common law severance can be much higher and may reach up to 24 months of compensation in some cases.
Why Older and Senior Employees Should Be Careful
Employees in their 50s or 60s may be especially vulnerable after a restructuring. If you held a senior, managerial, technical, or specialized role, it may take longer to find comparable work.
For example, a 54-year-old employee in a senior technical, banking, management, or professional role may be offered only a few months of severance. However, that offer may not reflect what the employee is actually owed under common law.
This is particularly important if your compensation included:
- A high base salary
- Annual bonus payments
- RSUs or stock awards
- Deferred compensation
- Pension or benefit entitlements
If you are over 50 and have been terminated, you may also want to read our page on severance for employees aged 50 and older in Ontario.
What Happens to Bonuses, RSUs, and Stock Options?
After a restructuring, employers may say that bonuses, RSUs, stock options, or other incentive compensation are cancelled, prorated, or forfeited.
That is not always the end of the matter.
Depending on your employment contract, compensation plan, and termination documents, you may still have a claim for incentive compensation during the reasonable notice period.
This can be a major issue for employees in banking, technology, sales, finance, management, and executive roles.
Can a Restructuring Termination Be Wrongful Dismissal?
Yes. A termination due to restructuring may still be a wrongful dismissal if your employer does not provide proper notice or compensation.
A wrongful dismissal claim may arise if:
- Your severance package is too low
- Your employer relies on an unenforceable termination clause
- You are not paid your proper bonus, commission, or equity compensation
- Your benefits are cut off too early
- The termination is connected to age, disability, medical leave, pregnancy, family status, or another protected ground
- Your employer acts in bad faith during the termination process
A restructuring may be a legitimate business reason for ending employment, but it does not allow an employer to ignore an employee’s legal rights.
What If Your Position Was Eliminated?
Employers often say that a role has been eliminated. However, employees should look carefully at what actually happened.
Important questions include:
- Were your duties reassigned to another employee?
- Was a similar job posted shortly after your termination?
- Were younger or lower-paid employees kept in similar roles?
- Were you selected for termination after raising a workplace concern?
- Were you on medical leave, disability leave, parental leave, or another protected leave?
Even if your position was genuinely eliminated, you may still be entitled to significant severance.
Can Restructuring Lead to Constructive Dismissal?
Yes. Not every restructuring involves an immediate termination. Sometimes an employer keeps an employee employed but makes major changes to their job.
A restructuring may create a constructive dismissal issue if your employer significantly changes your:
- Pay
- Bonus structure
- Title
- Job duties
- Reporting relationships
- Level of authority
- Work location
- Hours of work
If your employer makes major changes without your agreement, you should get legal advice before resigning or accepting the new terms.
What Should You Do If You Are Terminated Due to Restructuring?
If you were terminated due to restructuring in Ontario, take these steps before signing anything:
- Do not sign the severance package right away. Once you sign a release, it may be difficult to claim more compensation.
- Ask for the full offer in writing. This should include pay, benefits, bonus, vacation pay, RSUs, and other compensation.
- Review your employment contract. Your contract may affect your severance, but many termination clauses are not enforceable.
- Collect important documents. Save your offer letter, employment contract, compensation plans, bonus documents, termination letter, and recent pay statements.
- Speak with an employment lawyer. A lawyer can assess whether the package reflects your actual legal entitlements.
You may also wish to use our Ontario severance pay calculator as a starting point, but a calculator cannot replace legal advice about your specific situation.
Frequently Asked Questions About Termination Due to Restructuring in Ontario
Can my employer terminate me because of restructuring?
Yes. In Ontario, an employer can generally terminate a non-unionized employee without cause for business reasons, including restructuring. However, the employer must still provide proper notice or pay in lieu of notice.
Does restructuring mean I am not owed severance?
No. Restructuring does not eliminate your right to severance. You may still be entitled to ESA minimums and potentially much more under common law.
Should I accept the first severance offer?
Not without reviewing it carefully. Many initial severance offers are lower than what an employee may actually be owed.
Can I get severance if my job was eliminated?
Yes. A job elimination is usually still a termination without cause. You may be entitled to severance even if the employer says the role no longer exists.
What if my employer gave me a deadline to sign?
Employers often give short deadlines, but you should still take time to get legal advice before signing. Do not assume the deadline means the offer is fair.
Can I claim bonus or RSU compensation after termination?
Possibly. Bonus, RSU, stock option, and incentive compensation claims depend on the wording of your employment agreement and compensation plans.
Speak With an Ontario Employment Lawyer
If you were terminated due to restructuring in Ontario, your severance package may be worth more than your employer has offered.
Monkhouse Law Employment Lawyers helps non-unionized employees review severance packages, assess wrongful dismissal claims, and negotiate fair compensation after job loss.
Contact Monkhouse Law for a free 30-minute phone consultation.