Understanding Termination Without Cause in Ontario: What Employers and Employees Need to Know

You know how sometimes, despite everyone’s best efforts, an employment relationship just isn’t the right fit anymore? In Ontario, employers can end that relationship “without cause”—even if the employee hasn’t done anything wrong. But before you think it’s as simple as handing over a pink slip, there are a lot of legal details (and potential pitfalls) to consider.

What Does “Without Cause” Mean?

Simply put, “without cause” means an employer can let an employee go for reasons unrelated to misconduct—think restructuring, cost-cutting, or even just a mismatch in company culture. The catch? Employers must provide advanced notice and/or severance pay. They don’t have to explain the reason, but they do have to follow the rules.

What Are Employees Entitled To?

If you’re dismissed without cause, you’re entitled to:

• Working notice: You keep working until a future date.

• Pay in lieu of notice: You’re paid for the notice period instead of working it.

• A combination of both.

The Ontario Employment Standards Act (ESA) sets minimums—usually one week per year of service, up to eight weeks. Some employees may also qualify for statutory severance pay, especially if they’ve been with the company for 5+ years and certain business conditions are met. Severance can go up to 26 weeks under the ESA.

But that’s not the end of the story. If there’s no enforceable contract clause, “common law” might apply, which often means more—sometimes around a month per year of service, up to 24 (or even 28) months in exceptional cases.

Why the Way You Terminate Matters

How you let someone go is just as important as the fact of termination itself. Unprofessional, disrespectful, or dishonest behaviour can open the door to extra damages (think: aggravated or punitive damages). Firing someone for discriminatory reasons or in retaliation for raising health and safety issues? That’s a fast track to legal trouble under the Human Rights Code.

What Should Employers Consider?

If you’re an employer, think carefully before letting someone go:

• What does the employment contract say about termination?

• How long has the employee worked for you? What’s their role and compensation?

• Are you providing at least the ESA minimums?

• Is your process respectful and compliant?

Never try to “fudge” the reason or deny someone their entitlements—courts don’t look kindly on that.

When to Call an Employment Lawyer

Every situation is unique. Whether you’re an employer planning a layoff or an employee facing termination, consulting with an employment lawyer is your best bet for protecting your interests. A lawyer can help you negotiate, prepare documents, or (if needed) escalate things to court.

The Bottom Line

Terminating employment without cause in Ontario is common—but it’s rarely simple. Both sides have rights and responsibilities, and the details matter. If you’re navigating a termination, don’t go it alone. Get advice early and make informed decisions.

Until next time,