Termination Without Cause in Ontario Guide 2025

Protecting Your Rights After Job Loss

Losing your job without cause in Ontario is legal, but it often comes as a shock. Even if you’ve done nothing wrong, your employer can end your employment. However, being offered only the minimum notice or severance pay under the Employment Standards Act (ESA) does not always reflect your full legal entitlement. Many employees are owed more severance pay than what’s first offered.

This guide explains what termination without cause means, what compensation you could be owed, and the steps to take before signing anything.

📞 Need answers now? Book a Free 30 Minute Free Phone Consultation with Monkhouse Law Employment Lawyers today.

What Does Termination Without Cause Mean in Ontario?

Termination without cause means that an employee is let go for reasons unrelated to misconduct or serious wrongdoing.

Common examples include:

• Downsizing or restructuring
• Budget cuts or cost-saving measures
• Automation or outsourcing
• Personality conflicts or “bad fit”

Unlike termination for cause, you haven’t done anything that legally justifies losing all entitlements. You are still owed notice, pay in lieu, or severance if you have been employed for at least three months (Ontario ESA Guide).

Is Termination Without Cause Legal in Ontario?

Yes. Under Ontario law, employers can legally terminate a non-unionized employee without giving a reason, provided the employee has at least three months of continuous service (Ontario ESA Guide).

However, there are limits:

• • Employers must provide written notice or termination pay (Ontario ESA Guide).
  • Employers cannot terminate you for reprisal reasons, such as asserting your ESA rights (e.g., refusing unsafe work, taking parental leave) (ESA Reprisals).
  • Employers cannot terminate you for discriminatory reasons, which is illegal under the Ontario Human Rights Code.

If these conditions are not met, your dismissal may amount to a wrongful dismissal, which means you may still be entitled to compensation under common law. Learn what wrongful dismissal means and what to do next in our detailed guide: Wrongful Dismissal Ontario

Notice of Termination and Termination Pay (ESA Minimums)

Under the Employment Standards Act (ESA), employees with three months or more of continuous service are entitled to advance notice when their employment ends. This can take two forms:

Written Notice of Termination: Your employer gives you a letter stating the date your employment will end. During this “notice period,” you continue to work and receive your regular pay and benefits. It’s essentially advance warning of termination.
Example: On June 1, your employer gives you written notice that your last day will be July 1. You keep working and getting paid for that month.

or

Termination Pay (Pay in Lieu of Notice): Instead of making you work through the notice period, your employer can let you go immediately and pay you a lump sum equal to what you would have earned—including wages and benefits—during that notice period. It’s essentially money instead of time.
Example: If you were entitled to 4 weeks’ notice, your employer can let you go immediately, but pay you 4 weeks of wages and continue benefits for that period.

These are the minimum entitlements required by law:

Important: The ESA sets minimums only. Courts often award much higher amounts under common law, sometimes up to 24 months’ pay or more depending on your age, position, and years of service.

To learn more, see our guide on Severance Pay in Ontario or use our Severance Pay Calculator to estimate what you may actually be owed.

Common Law Notice: What You May Actually Be Owed

The ESA sets only minimum entitlements. Ontario courts often award much higher amounts under common law unless a valid employment contract limits this.

What is Common Law Notice?

• The period of time (or equivalent pay) that courts say is reasonable for an employee to find similar work after termination.
• Calculated using the Bardal factors:
  • Age of the employee
  • Length of service
  • Character of employment (role, seniority)
  • Availability of similar jobs in the market

Typical Range: Several months to 24 months or more in exceptional cases.

Why It Matters: Employers often offer only ESA minimums. If your contract’s termination clause is unenforceable (as in Waksdale v. Swegon), you may be owed much more under common law.

Takeaway: Always have your severance reviewed by an employment lawyer—common law notice often leads to significantly higher compensation.

Mass Terminations

If your employer is letting go of many employees at once, special rules under the Employment Standards Act (ESA) apply. These rules are triggered when 50 or more employees are terminated within a four-week period at the same establishment:

• Employers must provide 8 to 16 weeks’ notice, depending on the number of employees affected.
• Since 2023, remote employees are included when counting employees in an “establishment.”

For full details, see the Ontario ESA Guide – Mass Terminations.

Severance Pay in Ontario

In addition to notice requirements, some employees may also qualify for severance pay required by Ontario law (statutory severance pay):

You qualify if:

• You have five or more years of service, and
• Your employer has a payroll of at least $2.5 million, or 50+ employees are terminated in a six-month period.

Under the ESA, statutory severance = one week of pay per year of service, up to 26 weeks (Ontario ESA Guide – Severance Pay).

However, common law severance is often much higher. Courts apply the Bardal factors—age, role and level of responsibility, years of service, and the availability of similar jobs in your field—to determine what is reasonable. Employees can often receive up to 24 months’ pay or more in exceptional cases.

Example: Terminated Without Cause
An Ontario employee with 12 years of service at a mid-sized company was let go “without cause” due to restructuring. Their employer offered 8 weeks of termination pay, citing ESA minimums.

After a legal review, it was determined that their contract’s termination clause was unenforceable (as in Waksdale v. Swegon). Under common law, the employee was entitled to approximately 14 months of pay, including salary, benefits, and bonuses.

This case shows why it’s crucial to have severance offers reviewed — what looks like a “fair” offer may be far below your legal entitlement.

Check what you may be owed: Use our Severance Pay Calculator to get an estimate.

Termination Pay vs. Severance Pay

Although often confused, they are not the same:

• Termination Pay = ESA minimum notice (or pay in lieu).
• Severance Pay = additional compensation under ESA (for long-service employees) + common law entitlements.

Your package may also include: salary, benefits, bonuses, commissions, pension, and stock options.

Case Law: Why Many Termination Clauses Fail

Ontario courts have repeatedly ruled that termination provisions violating the Employment Standards Act (ESA) are not enforceable — even if framed as “without cause.” This means many employees are entitled to full common law severance, not just ESA minimums.

• Waksdale v. Swegon North America Inc., 2020 ONCA 391 — The Court of Appeal held that if any termination clause—such as a “for cause” clause—breaches ESA standards, the entire clause is void, and the employee is entitled to common law notice.
• Dufault v. The Township of Ignace, 2024 ONSC 1029 & 2024 ONCA 915 — The Superior Court found the termination clauses unenforceable, particularly due to “at any time” and “sole discretion” language, awarding full unpaid salary under a fixed-term contract. The Ontario Court of Appeal upheld this, reaffirming Waksdale’s principle.
• Baker v. Van Dolder’s Home Team Inc., 2025 ONSC 952 — Reinforced rulings that termination clauses permitting dismissal “at any time” are unenforceable under the ESA.

Because of these cases, many contracts that attempt to limit severance to ESA minimums are unenforceable, and employees may be entitled to significantly more compensation.

Employment Insurance (EI) After Termination Without Cause

Yes — most employees terminated without cause are eligible for Employment Insurance (EI), once their severance or notice period ends.

Independent contractors and some excluded categories are not eligible (Government of Canada – EI eligibility).

Most employees terminated without cause are eligible for Employment Insurance (EI) benefits. However, independent contractors and certain excluded categories are not eligible for regular EI unless they register for the self-employed program (Government of Canada – EI Benefits for Self-Employed).

Do I Have to Sign My Severance Package by the Deadline?

No. Employers often impose short deadlines as a pressure tactic, but it is important to take your time and review the proposed package.

• You have up to two years from your termination date to pursue a claim (Ontario ESA Guide).
• Once signed, most severance agreements are final and binding.

Important: Always have an employment lawyer review your package before signing.

Wrongful Dismissal After Termination Without Cause

A termination without cause may become a wrongful dismissal if:

• You were not given enough notice or severance.
• Your employer relied on an unenforceable contract clause.
• The termination was discriminatory or retaliatory.

Important: Filing a claim with the Ministry of Labour limits recovery to ESA minimums only. To pursue greater common law severance, you must file a wrongful dismissal lawsuit instead (Ontario ESA Guide).

Damages You May Be Entitled To

Beyond severance pay, Ontario courts may also award additional damages in dismissal cases:

• Aggravated Damages: For bad faith or insensitive dismissals.
  Example: Honda Canada Inc. v. Keays, 2008 SCC 39 — The Supreme Court of Canada confirmed that employees can recover damages for mental distress if an employer breaches its duty of good faith in dismissal.
• Punitive Damages: To punish and deter outrageous employer conduct.
  Example: Whiten v. Pilot Insurance Co., 2002 SCC 18 —  A landmark case where the Supreme Court set out when punitive damages are appropriate. Though not an employment case, it is frequently applied in wrongful dismissal matters.
• Moral Damages (Keays Damages): Awarded when the manner of dismissal causes mental distress beyond normal hurt feelings.
  Example: Honda Canada Inc. v. Keays, 2008 SCC 39 —  Clarified that these damages are compensatory, not punitive, and are awarded where employer conduct in dismissal foreseeably causes actual harm.

Quitting vs. Being Terminated

Quitting usually means you lose the right to severance. Only in cases of constructive dismissal (where your employer drastically changes your job) can you still claim compensation. Not sure if you’re being constructively dismissed? Learn more in Constructive Dismissal Ontario

Next Steps: What To Do If You’re Terminated Without Cause

1. Don’t sign your severance offer right away.
2. Calculate your ESA and common law entitlements.
3. Collect documents: contract, termination letter, pay stubs, emails.
4. Consult an employment lawyer to maximize your settlement.

Frequently Asked Questions (FAQ)

1. Can I get EI after termination without cause? Yes, most employees qualify once severance/notice ends.
2. Do I have to sign my severance package right away? No, take your time to review the offer carefully.
3. What’s the difference between a layoff and termination? A layoff is temporary. A termination ends employment permanently (Ontario ESA Guide – Temporary Layoffs).
4. Can my employer fire me for enforcing my rights? No. That would be an illegal reprisal under the ESA or Human Rights Code.
5. How much severance am I entitled to? ESA minimums = up to 26 weeks. Common law = up to 24 months.

Why Choose Monkhouse Law Employment Lawyers?

1. 1. • 10,000+ employees represented across Ontario
      • Featured in CBC, Toronto Star, Globe and Mail, Law360 Canada
      • Contingency fee options — no upfront costs in many cases
      • Employee-first advocacy with proven results

Book a Free Consultation Today

If you’ve been terminated without cause, you don’t have to face it alone. Monkhouse Law Employment Lawyers have helped thousands of employees across Ontario secure fair compensation after job loss. Our team understands both the ESA minimums and the much higher common law entitlements that courts award.

Don’t sign your severance package before getting advice. Time limits apply — speaking with an employment lawyer early can make the difference between minimum pay and the full amount you deserve.

📞 Contact us today to protect your rights and get the settlement you are owed.