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The question

I was let go without notice after one year of work. At the time I was quite shocked and not thinking straight, so I didn’t know to ask for severance. But someone told me I would be entitled to severance and could request it up to one or two years later even though I’ve already left. I haven’t signed any releases or paperwork. What are my rights? Are there any advantages to seeking severance right away or is it okay to wait until I’m in a better place to tackle this issue?

The first answer

Shibil Siddiqi, partner, Progressive Barristers, Toronto

Losing your job can be a distressing experience. Employees are typically entitled to take time to think through their options and to seek legal advice before accepting a termination package.

While often used interchangeably, “notice” and “severance” are distinct legal concepts. After one year of service, you are entitled to notice or pay in lieu thereof (known as “notice pay”) but not to severance. In Ontario, the amount of notice pay is governed by the Employment Standards Act (ESA), your employment contract and the common law.

After a year’s employment, under Ontario’s ESA you are limited to one week of notice pay. However, depending on the language of your employment contract, you may be entitled to a higher amount based on the common law. You may be also entitled to additional compensation depending on the manner of your termination, the withholding of ESA entitlements, or if any human rights grounds such as disability, gender or race were a factor in your termination.

Under Ontario’s ESA, a terminated employee is entitled to severance pay only after five years of service, and where the employer’s payroll is more than $2.5-million or if the employer terminates more than 50 employees in a six-month period. This is separate and apart from any notice pay.

You have up to two years from the date of your termination to negotiate a termination package after which you are barred from commencing a claim in court. The limitation period for human rights claims can be shorter at one year. While each situation is distinct, it can be advantageous to negotiate a termination package early for a variety of practical reasons. Regardless of when you choose to negotiate, seeking legal advice early is usually beneficial.


Nicole Simes, founder and lawyer, Simes Law, Toronto

Termination can be shocking and it is natural to need time to process before deciding on next steps. It is key not to sign off on a release or other documents right away. The deadline to bring most civil claims in court across Canada is two years. However, in some administrative tribunals, a claim must be started within a year or less.

Each province has specific employment standards legislation, setting out that terminated employees are owed certain amounts of notice, or pay in lieu of notice. Some jurisdictions also require additional money called “severance” to be provided. If you were in Ontario and you worked between one and three years, two weeks’ notice or pay in lieu of notice would be owed—assuming the employer is not saying that there was serious misconduct. If an employer does not pay the minimum statutory amounts within a certain time there may be a claim for additional money called aggravated or punitive damages.

Beyond the minimum requirements, there is also the common law. Judges will assess how long it will take the employee to find another comparable job considering factors like age, education and length of service. This is often significantly more than the statutory amounts. The employment contract impacts whether an employee can claim this higher amount (this is why having a contract reviewed before starting a job is so important). While you only worked for a year, your common law claim could be for two to four months of compensation or more.

Because no release was signed, you should talk to an employment lawyer to recover what is owed. At the very least, that employer owes those statutory minimum amounts.

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