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Termination Without Cause in Ontario: What You Need to Know

Whether you are an employee losing your job, or an employer having to terminate an employee, it is not a pleasant experience for those involved. What can be even more confusing for employees is when they are terminated without cause. Read on to understand what this means and what you may be entitled to in such a situation.

What Is a Termination Without Cause?

In Ontario, an employer has the right to terminate an employee if it decides it no longer wants to retain the employee’s services. That means an employee does not have to do something wrong resulting in their termination. Rather, it is the employer’s right to terminate the employee as they see fit. This decision may be based on a variety of reasons such as business restructuring, shortage of work, and other reasons that may not amount to cause for dismissal.

If an employee is terminated without cause, the employer is not obligated to provide him/her with a reason as to why. The employer may simply end the employment relationship (provided they meet other legal requirements).

Can Anyone be Terminated Without Cause?

Importantly, an employer’s right to terminate an employee without cause has limitations. An employer cannot terminate an employee for enforcing their rights under human rights or health and safety legislation. An employer also cannot terminate an employee for discriminatory reasons. Ontario’s Human Rights Code lists the protected grounds that an employer cannot rely on treat you unfairly or to discriminate against you.

Further, unionized or federal workplaces have different rules. For instance, federal employees generally cannot be terminated without cause under the Canada Labour Code (subject to narrow exceptions).

What Are My entitlements When I’m Terminated Without Cause?

An employee who is terminated without cause is entitled reasonable notice of termination. This means that the employer has to alert the employee that their employment is coming to an end at a future date, or provide pay in lieu of providing that advance notice. Therefore, an employer may elect to:

  • provide working notice, where the employee keeps working up to a future end date,
  • provide payment that compensates for the notice an employer should have provided, or
  • a combination of working notice and pay in lieu of notice.

Ontario’s Employment Standards Act lists the minimum amount of notice (or pay in lieu thereof) an employee must receive. However, an employment contract must sufficiently limit an employee to these amounts. Otherwise, an employee is entitled to higher amounts of notice based on common law.

Note, due to recent legal developments, most provisions in an employment contract that attempt to limit an employee’s notice to the legislated minimums are no longer valid. As such, if you have been terminated without cause, we recommend you seek legal advice on your entitlements.

Depending on how long you have been employed and the size of your employer’s payroll, you may also be entitled to severance pay upon termination without cause.

Further, there are other amounts an employee may be entitled to upon dismissal, such as if the employer engaged in bad faith conduct in the manner of the employee’s dismissal.

Can I still get Employment Insurance if I’ve Been Terminated Without Cause?

Generally, employees who have been terminated without cause can apply for Employment Insurance (EI). EI provides temporary income support to unemployed workers, but is only available to those who meet qualifying conditions.

Additionally, the COVID-19 pandemic has created some changes to the EI program. For more information on if you qualify for EI and changes to the program, visit the Government of Canada’s website here.

What if I Was Unfairly Dismissed?

If an employee believes s/he has been unfairly dismissed, the most prudent thing to do is to seek legal advice as soon as possible. Do not sign any termination letter, release, or such documents. Instead, advise the employer that you need time to consider your options.

An experienced employment lawyer can assess your situation and advise as to whether you may have been wrongfully dismissed, and/or assess your termination package to ensure it is fair.

Contact Us

If you are an employer and are facing a wrongful dismissal claim, or an employee who believes that you’ve been wrongfully dismissed, our team of experienced workplace lawyers at Achkar Law can help. Contact us by phone toll-free at +1 (800) 771-7882 or email us at [email protected] and we would be happy to assist.

If you are a small or medium-sized company looking for full-service support with same day response, visit our CLO Program page for our strategic solutions.