Terminated Without Cause in Ontario? Next Steps from a Lawyer

If you’ve just been terminated without cause in Ontario, I want to start by saying I’m sorry. This can be an incredibly emotional and confusing time, and you have every right to be upset.

Amidst the emotions, you’ve likely been handed a termination package and release with an urgent deadline… one that feels especially difficult to navigate right now. If you’re asking yourself “What do I do now?”, don’t worry, you’re in the right place.

As an employment lawyer who speaks with hundreds of terminated employees every year, I’ve done my best to outline my recommended next steps, provide an overview of your potential entitlements, and share key considerations to help you secure the maximum notice or severance you deserve under Ontario law when fired without cause.

Key Takeaways

• “Without cause” terminations are legal in Ontario, but employers must meet notice and severance obligations.

• You may be owed significantly more than the minimum amounts listed under the Employment Standards Act (ESA).

• Do not sign severance offers immediately. You typically have more time to review and consult a lawyer than the employer’s deadline suggests. (In other words, you can ask for an extension.)

• You are eligible for Employment Insurance (EI) if there is no misconduct. “Fired” does not automatically mean no EI.

• An employment lawyer can assess your severance package, check if a termination clause in your contract is valid, and often negotiate a better deal.‍

Note: Every situation/contract/termination/severance package is unique, so please consult with an employment lawyer to discuss your matter. This post includes legal information but is not legal advice.

1. Take a moment before signing anything after being terminated without cause

The first thing most employees see in a termination meeting is a severance package with a tight deadline, sometimes giving them days or even hours to accept. Although this can feel urgent, you don’t have to sign immediately. In Ontario, you generally have up to two years to commence a wrongful dismissal claim, so a short deadline is often a pressure tactic for you to accept the initial offer.

Recommended steps after receiving your termination package:

1. Acknowledge the documents: Thank your employer for the information and let them know you’ll review everything carefully.
2. Read every document: This includes the termination letter, release form, and benefit details. Note the exact pay offered, how benefits continue, and any conditions.
3. Request an extension if needed: If the employer’s “sign by” date is too soon, especially if you’re seeking legal counsel, politely ask for more time. Most employers will grant an extension.
4. Get legal advice: Consulting with an employment lawyer to review your termination package can help clarify your rights, entitlements, and potential negotiation strategies.

2. Understand the basics of “without cause” termination in Ontario

Termination without cause simply means you’re being let go for reasons other than serious misconduct. Perhaps your role has been eliminated or the company is restructuring. In Ontario, you can be fired without cause for any reason (other than discrimination, retaliation, and other special circumstances). That said, your employer must give you proper notice and severance (if applicable) under Ontario law if they choose to terminate your employment. Failing to do so could be considered a wrongful dismissal.

• Termination with cause: Reserved for misconduct (like theft, fraud, or insubordination). If the employer claims “cause” and you dispute it, that can become a separate legal issue.
• Termination without cause: The employer does not allege wrongdoing. It is legal to terminate, provided adequate notice is given.

This distinction matters. If you're fired without cause, you maintain the right to notice, severance (if applicable), and potentially a lot more than the ESA minimums.

Note: Many employees wonder why they were let go and ask for details. In Ontario, employers are not strictly required to provide a reason, and often they avoid doing so to reduce liability risk. It’s an unfortunate reality for many employees as they seek closure after a termination. I've taken a moment to write more frequently asked questions from employees after a termination.

3. Know your entitlements: ESA minimums vs. common law (and Human rights)

When you’re let go without cause in Ontario, there are up to four layers of potential entitlements:

1. Employment Standards Act (ESA) minimums
   
   • Notice (or pay in lieu): Generally 1 week per year of service, capped at 8 weeks.
   • Statutory Severance: An extra 1 week per year of service (up to 26 weeks) if you have 5+ years of employment and your employer’s payroll is $2.5 million or more.
2. Contractual entitlements
   
   • Employers can specify how much notice you will receive upon termination in a carefully worded employment contract. 
   • It is important to have any termination provisions reviewed by an employment lawyer. Termination provisions that attempt to limit employees’ entitlements on termination are frequently found to be invalid and therefore unenforceable. 
   • When a termination provision is unenforceable, an employee is entitled to common law reasonable notice. 
3. Common law “reasonable notice”
   
   • Courts often award much more than the ESA, sometimes months per year of service, up to 24 months or more.
   • Factors such as your age, role, length of service, and difficulty finding similar work affect how much you may be owed.
4. Human rights and other considerations
   
   • If discrimination (e.g., based on race, gender, disability, pregnancy, etc.) was a factor in your termination, you may have additional claims under the Human Rights Code.
   • If your employer acted in bad faith or unfairly in terminating you, you may be entitled to additional damages. 

Example: Under the ESA, an 8-year employee might get 8 weeks’ pay. Under common law, that same individual could easily be awarded 6 to 10 months’ pay, sometimes more. This gap is why you should never assume the employer’s first severance offer is all you’re entitled to and why you should consult with an employment lawyer.

4. Apply for Employment Insurance (EI)

You may worry that because you were “fired,” you cannot collect EI. However, if the termination is without cause (i.e., there was no proven misconduct), you typically remain eligible for regular EI benefits.

• Check your Record of Employment (ROE): Confirm how your employer classified the separation.
• Apply for EI promptly: This helps you avoid any unnecessary delay in benefits. Service Canada will coordinate your severance with EI, but that should not stop you from filing early.

Tax implications: If you receive EI and later negotiate additional notice or severance, the lump sum might be treated differently for tax purposes. Typically, severance is taxed at the time of payment. Consider speaking to an accountant or financial advisor if the amount is substantial. It’s also important to note that if you receive EI and later receive a notice and/or severance payment for the same time period, you will need to repay EI. 

5. Consider consulting an employment lawyer

Why bother hiring a lawyer? An employment lawyer can help you:

• Review severance and contracts: Determine if the offer is fair. Many termination clauses try to limit you to ESA minimums, yet some are unenforceable.
• Negotiate on your behalf: Employers often start with a lower severance offer. A lawyer’s backing can significantly improve your termination package.
• Clarify your rights: If you suspect discrimination or reprisal (e.g., you raised a health and safety concern), a lawyer can explore additional remedies.

Even if you choose not to retain counsel after a termination package review, you’ll gain peace of mind knowing whether the deal is truly fair, or if you’re potentially leaving money on the table.

6. Keep records and mitigate damages

• Save all paperwork: Hang on to the termination letter, any release forms, and all relevant HR communications.
• Document your job search: You’re expected to “mitigate” (minimize) your losses by seeking new employment after a termination. Courts may consider whether you made a reasonable effort if your termination package dispute goes to trial.
• Reach out for support: Being fired is stressful and can affect your mental health. Talking to friends, family, or professionals can help you cope and move on constructively. It is important to keep in mind (and respect) any confidentiality requirements imposed on you by your employment contract or termination package.

If you suspect something more complicated, like discrimination, harassment, or bad faith, seek legal advice sooner rather than later.

Keep an open mind when terminated without cause

Getting terminated without cause in Ontario does not mean you have no options. While the law allows employers to let you go without alleging misconduct, it also requires them to compensate you fairly. Before you sign away your rights or assume you cannot collect EI, take a moment. Learn what you’re entitled to under both the Employment Standards Act and common law. Often, that first severance offer is only a fraction of what is possible.

Above all, do not let a tight deadline or the word “fired” rattle you into giving up. You have time, and legal avenues, to protect your interests. If you need clarity on your severance package or next steps, reach out to us at Kompa Law. We’re here to offer guidance, support, and, if needed, strong advocacy to help you move on from a without-cause termination with the confidence and compensation you deserve.