Severance Pay Ontario

Severance pay laws in Ontario Canada apply mostly to employees who've had their employment "severed." This means the employment was stopped because the employer filed bankruptcy, unfairly terminated the employee, laid off the employee for 35 weeks or more, discontinued all or part of the business, or gave long-term written notice to the worker, but the worker resigned with a two-week notice within that period. The worker also must have had five or more years with the company and was employed by a company with a payroll in Ontario of $2.5 million or more; or has lost their employment along with 50 other employees in the same six month period. The amount of severance pay is calculated by the number of years worked multiplied by their regular weekly wages. Any questions concerning wages and laws can be answered by consulting the Employment Standards Act publications or by contacting the Ministry of Labor.

Fast Facts

  • An employee can receive a maximum of 26 weeks of severance pay.
  • Employees guilty of willful misconduct, intentional neglect of duties or disobedience which isn't trivial are not entitled to receive severance pay.
  • Severance pay is received either seven days after termination or on the employee's next pay date, whichever is later.

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