5. Ontario Law and Termination of Employment

This video outlines the basics of termination of employment in Ontario. The text below summarizes what is discussed in the video.

To read along, click here.

Termination of Employment

An employment relationship can end for a number of different reasons. For instance, an employee may resign or retire, or an employer may decide to terminate an employee. An employer may terminate an employee if they provide reasonable notice (with pay) or if they have evidence of wrongdoing by the employee, sometimes referred to as “just cause”.

It is important to note that the Ontario Human Rights Code also applies to the termination process. An employee cannot legally be terminated based on any of the prohibited grounds of discrimination set out by the Code.

Termination for Just Cause

Termination for just cause refers to a situation where an employer terminates an employee without notice when there is evidence of wrongdoing. For instance, this may be in the case of serious misconduct or habitual neglect of duty. Typically, these cases are complex, and may require the employer to demonstrate evidence that the employee was made aware of the issue, for instance notified in writing or through performance evaluations.

Termination with Reasonable Notice

In many cases of termination, employers will provide reasonable notice of termination. This means that notice of termination is provided to the employee and compensation is paid to the employee based on a number of criteria. The law specifies a minimum compensation package of one week’s salary for each year of employment, up to 8 weeks’ salary. However, compensation packages may exceed this amount as they take into account: how long the employee has worked for the employer, the employees age, the type of job, the salary, and the current job market conditions. For more information, visit the Ontario Ministry of Labour’s website: Termination of Employment and Termination and Severance.

A common perception is that termination is a three-step process: a verbal warning given to the employee, a written warning given to the employee, and a final warning. While this process is not mandated by law, it may be a wise course of action as it provides evidence of continued communication and evaluation of the employee, should it become necessary to provide this.

It is important to note that there are many other factors impacting the rules and processes around termination of employment. For instance, in the case of unionized employees, or employees covered under a collective agreement, the circumstances for termination of employment are different.