CALL US NOW

Wrongful Dismissal in Ontario: How to Tell if Your Severance Package Is Unfair

If you have been let go from your job in Ontario, your employer may have called it a “layoff,” “restructuring,” or “without cause termination”, but what really matters is whether you were given your full legal severance. This is where a potential wrongful dismissal claim comes in.

What Is Wrongful Dismissal in Ontario?

Wrongful dismissal does not mean your employer was rude or unfair in a general sense. It means your employer failed to provide the amount of notice, pay in lieu of notice, and severance required under the Employment Standards Act (ESA), your contract, and the common law. In many cases, employees are entitled to far more than the bare minimum ESA amounts.

Common examples of wrongful dismissal include:

  • You were let go without cause and offered only a few weeks or months of pay after years of service.
  • You were dismissed while on, or shortly after, a protected leave (such as pregnancy, parental, or medical leave).
  • Your employer relied on a termination clause that is outdated or inconsistent with the ESA.
  • Your job was made intolerable (cut hours, lower pay, demotion) and you felt forced to resign (constructive dismissal).

 

Why Severance Offers Are Often Too Low

Employers frequently present termination packages as “standard” or “non-negotiable,” but courts routinely award significantly higher amounts than initial offers. Several factors can increase your entitlement, including:

  • Age and length of service
  • Position and level of responsibility
  • Availability of comparable jobs in your industry
  • Whether the termination was handled in bad faith or with misleading statements

In serious cases, courts may also award extra damages for mental distress, reputational harm, or punitive damages where the employer’s conduct was particularly egregious.

 

ESA Minimums vs. Full Common Law Severance

Ontario’s ESA sets minimum notice and severance standards, but those numbers are often just the starting point. Many non-unionized employees are entitled to common law reasonable notice, which can be significantly higher than the statutory minimums. A termination clause in your contract might limit you to ESA minimums, but such clauses are frequently struck down if they do not fully comply with the ESA.

Recent decisions from Ontario courts show a continued willingness to invalidate termination clauses that are unclear, overly broad, or potentially undercut ESA rights. When a clause is invalid, the employee usually reverts to full common law notice.

Should You Sign Your Severance Release?

Most termination packages come with a deadline and a requirement that you sign a full and final release. Before you sign:

  • Do not assume the first offer is fair or final.
  • Do not rely on a severance calculator alone; these tools do not consider critical facts in your case.
  • Do not sign under pressure without legal advice.

You should have any severance package, termination letter, or new employment agreement reviewed by an employment lawyer who can compare your offer with what Ontario courts are actually awarding.

 

When to Contact an Ontario Employment Lawyer

You should speak to a lawyer promptly if:

  • You have been terminated without cause and are unsure whether your severance is fair.
  • You believe you have been pushed out through constructive dismissal.
  • You were dismissed after asking for accommodation, complaining about harassment, or taking a protected leave.

 

Strict limitation periods may apply, and delay can harm your ability to negotiate or sue. Many employees are surprised to learn that a short call or consultation can quickly clarify whether they are leaving months of pay on the table. To learn more about your rights and entitlements, reach out to us at 905‑440‑1220, we’re here to help with a free consultation.