Start here: Severance pay in Ontario: the complete guide explains the ESA minimums, common-law notice and how to negotiate.
Quick answer: Being terminated "without cause" means your employer is ending your job for business or other reasons, not misconduct. It's legal, but it isn't free. You're owed notice or pay in lieu of notice, at least the ESA minimum and usually much more at common law, plus benefits and other compensation for the notice period.
What "without cause" means
Your employer is ending your employment for a reason other than serious misconduct. That might be restructuring, cost cutting, a change in direction, or no stated reason at all. In Ontario that's generally allowed, provided the employer gives you proper notice of termination or pay instead of notice.
Being terminated "without cause" also isn't a finding that you did anything wrong. It doesn't stop you from getting EI, and it's how most terminations happen.
"Fired with cause" is different. The employer is claiming misconduct serious enough to justify paying you nothing. That's a high bar, and it's often challenged successfully. See do you get severance if fired with cause in Ontario.
What your employer owes you
1. Your ESA minimums
- Termination pay: 1 to 8 weeks of pay, depending on your length of service, once you've worked at least three months.
- Severance pay: a further 1 week per year of service, up to 26 weeks, if you have five or more years of service and your employer's payroll is $2.5 million or more.
- Benefits continued through the statutory notice period.
- Outstanding wages and vacation pay owing on your last day.
These must be paid whether or not you sign a release. Full details and tables: severance pay in Ontario.
2. Common-law reasonable notice
Unless your contract has a valid clause limiting you to the ESA, you're entitled to reasonable notice under the common law. It's set using the Bardal factors: your age, length of service, the character of your job and how easy it will be to find similar work. Reasonable notice covers your full compensation for the notice period, including salary, bonus, commission and benefits, and it's often many times the ESA minimum.
Working notice versus pay in lieu
Your employer can give you notice in advance and have you keep working ("working notice"), pay you instead of notice ("pay in lieu"), or combine the two. Either way, the total has to meet what you're owed.
Does a termination clause limit you?
Many employers rely on a clause in the employment contract that limits you to the ESA minimum. Ontario courts frequently refuse to enforce these clauses. Under Waksdale v. Swegon North America Inc. (2020), if any part of the termination provisions breaches the ESA, including the "for cause" wording, the whole clause fails. Clauses giving the employer the right to terminate "at any time" or "at its sole discretion" have also been struck down. If your clause fails, you're owed common-law notice.
Your first week after termination
- Don't sign anything at the meeting. Take the letter, the package and any release home. Here's why.
- Ask for the details in writing, including your final pay, vacation pay, benefits end date, bonus and commission, and the Record of Employment.
- Return company property as asked, but keep copies of your own contract, pay records and performance reviews.
- Apply for EI without waiting for the severance to be finalized.
- Start your job search and keep records. At common law you're expected to look for comparable work.
- Get a lawyer's view before your deadline. Many offers can be improved, and a termination clause that looks binding often isn't.
How much more can you get?
It depends on your facts, but the gap between an ESA-only offer and common-law notice is often large. For a long-serving employee in their 50s, the ESA minimum might be under 8 months of pay including severance, while common-law notice could be well over a year. Try our severance calculator for an estimate, then book a free 30-minute phone consultation to test it against your contract.
Related guides
- Severance pay in Ontario: the complete guide
- Wrongful dismissal in Ontario
- Can you get fired without warning in Ontario?
- What is a temporary layoff?
- 5 ways to react to termination
Employment lawyer in Toronto. JD, University of Ottawa. About Faisal
This article is general information about Ontario employment law, not legal advice. Every situation is different. For advice about yours, book a free consultation.