Employers have various obligations upon terminating an employee from employment, including but not limited to complying with the Employment Standards Act, 2000, S.O, 2000, c.41 in Ontario.
If you have been terminated from your employment without cause, your employer is required to pay a minimum number of weeks of compensation in accordance with the Employment Standards Act in Ontario, equivalent to one-week of pay per year worked, up to a maximum of 8 weeks’ of termination pay. It is illegal for an employer to pay a termination package that does not comply with at least the minimum standards set out in the Employment Standards Act.
The minimum standards include a requirement to pay termination pay, severance pay, and continue employer benefits through the statutory notice period. Termination pay must be paid on the basis of one-week per year worked, up to a maximum of 8 weeks. Severance pay is different than termination pay. Only those employees that have been employed for longer than 5 years for an employer with a payroll of greater than $2.5M will be entitled to severance pay upon termination of their employment. The Employment Standards Act governs the formula to calculate severance pay should you be entitled.
Employers are required to pay terminated employees their base minimum statutory entitlement 7 days after termination or on the employees’ next pay date, whichever is later. This statutory pay must be distributed irrespective of whether the employee has executed a signed release, which an employer will typically require in order to formalize the severance.
Employees that are employed in certain designated, federally regulated sectors (i.e., telecommunications, banks, airlines, etc.) are entitled to benefits as outlined in the Canadian Labour Code, which codifies a set of employer obligations upon terminating employees in the designated sector. Many of the rights and obligations therein are similar to those enumerated in the Employment Standards Act.
If you have been terminated from your employment, consult with an experienced employment lawyer to determine if your employer has upheld its obligations on termination.