How Much Notice Must I Give to Terminate an Employee in Ontario?

Step 1: Confirm the ESA notice obligation applies

Before calculating anything, check two things: has the employee been continuously employed for at least three months, and is this actually a “termination” under the Employment Standards Act, 2000 (ESA)? In most cases, once an employee has been continuously employed for three months, the employer must provide written notice of termination, termination pay, or a combination of the two (Employment Standards Act, 2000, SO 2000, c 41, ss 54, 56-57). Employees terminated before the three-month mark are not owed statutory notice.

There are also exceptions where no notice or termination pay is owed at all. An employee is not entitled to ESA notice if they are guilty of wilful misconduct, disobedience, or wilful neglect of duty that is not trivial and has not been condoned by the employer, or if they were hired for a specific term or task that has simply ended (Employment Standards Act, 2000, SO 2000, c 41, s 55; O Reg 288/01). This is a narrow exception: ordinary performance problems or a personality mismatch do not meet the standard.

Step 2: Calculate the ESA statutory minimum notice period

Once the ESA applies, the length of required notice (or pay in lieu) is set by section 57 and scales with the employee’s length of service, capped at eight weeks:

An employee whose period of employment is less than one year is entitled to one week’s termination notice (Employment Standards Act, 2000, SO 2000, c 41, s 57(1)(a)). At the other end of the scale, an employee with eight or more years of service is entitled to at least eight weeks’ notice before termination, with seven weeks applying in the seven-to-eight-year band (Employment Standards Act, 2000, SO 2000, c 41, s 57(1)(g)-(h)). Section 57 fills in the years between one and eight on the same increasing scale, up to that eight-week cap.

Step 3: Check whether statutory severance pay also applies

Severance pay is a separate entitlement from termination notice, and it does not apply to every termination. In Ontario, employees are entitled to severance pay if they have worked for their employer for more than five years and the employer either has a payroll of $2.5 million or more, or ended the employment of 50 or more employees within six months (Employment Standards Act, 2000, SO 2000, c 41, Part XV). Where it applies, statutory severance pay is capped at 26 weeks (Employment Standards Act, 2000, SO 2000, c 41, Part XV). This is paid in addition to, not instead of, statutory notice.

Step 4: Check the employment contract for a termination clause

The ESA notice and severance rules are minimum requirements only; they do not override a more generous entitlement (Employment Standards Act, 2000, SO 2000, c 41, s 5(2)). Many employment contracts contain a termination clause meant to cap the employee’s notice at the ESA minimum. Whether that clause is enforceable is a separate legal question from the ESA calculation itself, and the outcome affects which of Steps 2-3 or Step 5 governs the actual amount owed.

Step 5: If no enforceable clause limits it, determine common law reasonable notice

Absent an enforceable termination clause, an employer must give an employee “reasonable notice” at common law. This obligation is an implied term of every indefinite employment contract: in the case of master and servant there is implied in the contract of hiring an obligation to give reasonable notice of an intention to terminate the arrangement (Bardal v Globe & Mail Ltd, 1960 CanLII 294 (ON SC)). Reasonableness is decided case by case, having regard to the character of the employment, the length of service, the age of the employee, and the availability of similar employment (Bardal v Globe & Mail Ltd, 1960 CanLII 294 (ON SC)). These are known as the Bardal factors, and there is no fixed formula; common law notice can exceed the ESA’s eight-week cap substantially, depending on the individual’s circumstances.

Step 6: Decide the form of notice: working notice, pay, or a combination

The ESA allows an employer to satisfy the notice obligation through working notice (the employee continues working through the notice period), termination pay in lieu of notice, or a combination of the two (Employment Standards Act, 2000, SO 2000, c 41, ss 56-57). Which combination is used, and whether the notice period is the ESA minimum or a longer common law period established in Steps 4-5, determines the total amount owed to the employee.