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What you owe when you terminate without cause in Ontario

When you let a non-union employee go without cause, two sets of obligations can apply. The Employment Standards Act, 2000 (ESA) sets minimums that no contract can reduce. On top of that, unless a valid termination clause limits the employee to the ESA minimum, they are entitled to common law reasonable notice, which is usually much larger.

The ESA minimums

• Notice or termination pay: 1 week for less than a year of service, 2 weeks for 1 year to less than 3 years, then 1 week for each full year, up to 8 weeks.
• Severance pay, if the employee has five or more years of service and either your payroll is $2.5 million or more a year, counting employees everywhere, or 50 or more employees lose their jobs within six months because all or part of the business is closing permanently. It is one week of regular pay per year of service, with partial years counted by completed months, up to 26 weeks.
• Letting 50 or more employees go at one location within four weeks can raise the notice period to 8, 12 or 16 weeks, and you must file a notice with the Director of Employment Standards.
• Benefits must continue during the ESA notice period, and ESA amounts cannot be made conditional on signing a release.

Common law reasonable notice

Courts weigh the factors from Bardal v. Globe & Mail: the employee's age, length of service, the kind of job they held, and how hard it will be to find similar work. ESA amounts count toward it. Awards above 24 months are rare and reserved for exceptional cases. The employee is expected to look for new work, and new income can reduce what you owe, depending on whether you give working notice, a lump sum or salary continuance.

Termination clauses

A termination clause only limits what you owe if it is clear and complies with the ESA in every situation. A clause that fails can leave you owing full common law notice, so it is worth reviewing your contracts before you need them.

Frequently asked questions

How much notice do I have to give an employee in Ontario?

At least the ESA minimum: up to 8 weeks of notice or termination pay, plus up to 26 weeks of severance pay where it applies. Without a valid termination clause, common law reasonable notice usually applies, which the calculator above estimates.

Can I give working notice instead of a payout?

Yes. You can give written notice and have the employee keep working, pay in place of notice, or combine the two. During the ESA notice period you cannot cut their pay or change their terms, and benefits must continue.

Do I still owe the ESA minimums if the employee will not sign a release?

Yes. ESA amounts are owed either way. A release is usually offered in exchange for an amount above the minimums.

What if I have cause?

Just cause is a high bar, and the ESA test for withholding the minimums is stricter still. Get advice before relying on cause, because a cause allegation that fails can add to your exposure.

Does this apply to unionized or federally regulated workplaces?

No. For unionized employees, the collective agreement governs. Federally regulated employers, such as banks, airlines, railways, telecom companies and interprovincial trucking companies, follow the Canada Labour Code.

Is the information I enter stored?

No. The calculator runs in your browser and nothing you enter is sent to us.

For ongoing help with terminations, contracts and policies, see Alinea On-Call.

This page gives general information about Ontario law, not legal advice. Last reviewed November 2026.