Overview
When a Canadian employee is dismissed without cause, they are entitled to notice (continued employment during the notice period) or pay in lieu of notice (a lump sum). Most employees know about the statutory minimums under provincial employment standards legislation — typically 1–8 weeks depending on years of service. What most employees don’t know is that these statutory minimums are a floor, not the ceiling.
Under common law, Canadian courts have long recognized that employees are entitled to reasonable notice — and “reasonable” often means months or years of pay, especially for mid-to-senior level employees with more than a few years of service. Employers routinely offer only the statutory minimum, hoping employees don’t know they may be entitled to far more.
The gap between what employers offer and what courts award is often substantial: a manager dismissed after 10 years may be owed 12–18 months of pay in common law, while their contract might cap it at 8 weeks statutory notice.
The Bardal Factors
Canadian courts use the Bardal factors (Bardal v. Globe & Mail, 1960) to determine reasonable notice. No formula exists — it’s a holistic assessment of:
- Character of employment — Higher level, more specialized = more notice
- Length of service — Longer service = more notice (the single most important factor)
- Age — Older employees who face more difficulty finding comparable work = more notice
- Availability of similar employment — Specialized roles in niche industries = more notice
- Economic conditions — Difficult job markets increase notice periods
General ranges as a starting point (not a formula):
- Under 2 years, junior role: 1–4 months
- 5 years, mid-level: 4–8 months
- 10 years, senior/specialized: 10–18 months
- 20+ years, long-tenured: 18–24+ months
Courts have awarded as high as 26–30 months for exceptional cases.
Are Employment Contract Termination Clauses Enforceable?
Most employment contracts contain a “termination clause” that attempts to limit notice to the Employment Standards Act minimum. Ontario and other provincial courts have struck down many such clauses as unenforceable, including when:
- The clause purports to give less than the statutory minimum (illegal on its face)
- The clause does not clearly contract out of common law notice
- The clause was not explained to the employee when signed
- The clause violates other Employment Standards Act provisions (e.g., doesn’t mention continuation of benefits during the notice period)
- The contract was not provided with adequate consideration (e.g., given the day before starting work)
Key case law:
- Wood v. Fred Deeley Imports Ltd. (2017, ONCA) — clause struck down for ambiguity
- Waksdale v. Swegon North America Inc. (2020, ONCA) — if the “just cause” termination clause violates ESA, the entire termination clause (including without cause) is void
- Matthews v. Ocean Nutrition Canada (2020, SCC) — bonuses and other compensation must be included in damages for wrongful dismissal
What to Do If You’ve Been Dismissed
Step 1 — Don’t sign anything immediately. Employers often pressure employees to sign a release in exchange for severance. Once you sign, you generally cannot claim more. You have time to assess your options.
Step 2 — Gather your records. Collect your employment contract, any amendments, your T4s (to document total compensation), and any communications about your termination.
Step 3 — Consult an employment lawyer. Most employment lawyers offer a free 30-minute initial consultation and work on contingency (taking a percentage of what they recover) — you pay nothing unless you win. A lawyer can quickly assess whether your termination clause is enforceable and what a fair notice period looks like.
Step 4 — Understand your full compensation. Reasonable notice damages include your full compensation package — base salary, bonuses that would have been paid during the notice period, benefits continuation, pension contributions, car allowances, and stock options that would have vested. Do not accept an offer based only on base salary.
Step 5 — Negotiate. Once you know your entitlements, make a counteroffer. Most wrongful dismissal matters settle without going to court. A demand letter from a lawyer often prompts a significantly improved offer.
What Most People Don’t Know
- There is no universal cap of 24 months. Courts sometimes award more in extraordinary circumstances. The 24-month figure is a common reference point, not a hard ceiling.
- Working notice is valid but may be refused. An employer can give you actual notice (require you to keep working during the notice period). However, if the working conditions are intolerable, you may be able to claim constructive dismissal.
- Constructive dismissal applies to significant changes. If your employer substantially changes your job title, pay, hours, or responsibilities without consent, this may constitute a dismissal without notice — triggering the same notice entitlement.
- Mitigation is required. You are required to make reasonable efforts to find comparable employment. Any income earned during the notice period reduces your damages. Keep records of your job search.
- Federal employees have different rights. Employees of federally regulated industries (banks, airlines, rail, broadcasting) are governed by the Canada Labour Code, which has different unjust dismissal provisions including reinstatement.
- The statutory minimums under ESA are only the absolute floor. Your entitlement to ESA minimum notice and severance pay cannot be contracted away — ever. Common law notice is on top of that, but can be contracted away (if done properly).
Frequently Asked Questions
My employment contract says I only get 2 weeks’ notice — can I still claim more?
Possibly. A termination clause is only enforceable if it is clear, unambiguous, and does not violate any provision of the Employment Standards Act. Courts have struck down clauses that don’t explicitly address severance pay, omit benefits continuation, or are attached to an illegal “just cause” clause (Waksdale, 2020 ONCA). If your clause has any of these flaws, a court may award full common law notice regardless of what the contract says.
What is the maximum common law notice period I could receive in Ontario?
The generally accepted maximum is 24 months, reserved for long-tenured, senior employees who are older and face particularly difficult re-employment prospects. Courts have occasionally exceeded 24 months in exceptional cases. The 24-month figure is a reference point, not a hard ceiling set by legislation.
Does my severance include my bonus and other non-salary compensation?
Yes. The Supreme Court of Canada confirmed in Matthews v. Ocean Nutrition Canada (2020 SCC 26) that wrongful dismissal damages include all compensation the employee would have received during the notice period — including bonuses that would have been paid, benefits, pension contributions, car allowances, and stock options that would have vested. Never accept an offer calculated only on base salary.
Do I need to keep looking for a new job while pursuing a wrongful dismissal claim?
Yes. You have a legal duty to mitigate — to take reasonable steps to find comparable employment. Any income you earn during the notice period reduces the damages your employer owes. However, mitigation does not require you to accept a significantly inferior position. Keep detailed records of your job search activity, as your employer may argue you failed to mitigate.
Can I bring a wrongful dismissal claim if I was a federally regulated employee (bank, airline, etc.)?
Yes, but under a different framework. Employees of federally regulated industries (banks, airlines, railways, broadcasting) are covered by the Canada Labour Code, which has its own unjust dismissal provisions and includes the right to reinstatement — not available under provincial employment standards. The notice calculation and remedies differ from provincial common law.