Who Is Entitled to Severance Pay in Ontario?

Published on
July 28, 2026
Written by Saad Mirza

Most people who lose their job assume they are entitled to severance pay. Some are. Some are not. And many who are entitled to it accept far less than what the law actually provides.

Here is who qualifies, what they are owed, and how it differs from termination pay.

Termination Pay vs. Severance Pay — The Difference

These two are not the same thing — and you may be entitled to both.

Termination pay is the basic amount owed to almost every employee who is let go without cause. It is pay in lieu of the notice your employer should have given you.

Severance pay is a separate, additional amount owed only to employees who meet specific criteria. It exists to recognize long service and the disruption caused by losing a job with a larger employer.

Think of it this way — termination pay compensates you for the lack of notice. Severance pay compensates you for your years of contribution.

Who Is Entitled to Termination Pay

Under Ontario’s Employment Standards Act, you are entitled to termination pay if you have worked for your employer for more than three months and are dismissed without cause.

Years Worked	Termination Pay
Less than 1 year	1 week
1 to 3 years	2 weeks
3 to 4 years	3 weeks
4 to 5 years	4 weeks
5 to 6 years	5 weeks
6 to 7 years	6 weeks
7 to 8 years	7 weeks
8 or more years	8 weeks

This is the minimum. It is not the full picture.

Who Is Entitled to Severance Pay

Severance pay under the ESA applies only if both of the following conditions are met:

Condition 1 — Length of service
You must have worked for your employer for five or more years.

Condition 2 — Size of employer
Your employer must have a payroll of at least $2.5 million per year — OR must be eliminating 50 or more positions within a six-month period.

If both conditions are met, you are entitled to one week’s pay per year of service — including partial years — up to a maximum of 26 weeks.

A Simple Example

David worked at a large Ontario company for 11 years before being let go without cause. His employer’s payroll exceeds $2.5 million.

Termination pay — 8 weeks (ESA maximum)
Severance pay — 11 weeks (one per year of service)
Total ESA entitlement — 19 weeks

Two separate amounts. Both legally owed. Many employers present only one.

Who Is NOT Entitled to Severance Pay

You are not entitled to ESA severance pay if:

You have worked for less than five years
Your employer’s payroll is under $2.5 million and fewer than 50 positions are being eliminated
You were terminated for just cause — though this is a high legal bar that employers frequently fail to meet
You resigned voluntarily — unless the resignation was a constructive dismissal

What Most Employers Leave Out

ESA termination and severance pay are the legal minimums. Ontario courts regularly award significantly more under common law reasonable notice — based on your age, length of service, seniority, and the difficulty of finding comparable work.

For many employees, especially long-service or senior ones, common law notice is worth far more than ESA entitlements alone. This is the amount your employer is counting on you not to ask about.

Other Entitlements Often Missed

Beyond termination and severance pay, your package should also include:

Benefits continuation during the notice period
Pro-rated bonus if one was near-earned at termination
Unvested equity or RSUs that would have vested during the notice period
Accrued vacation pay paid out in full

These are frequently left out of initial offers. Always review the full picture before signing.

The bottom line: Severance pay is not guaranteed to everyone — but if you qualify, it is a legal right, not a favour. And whether or not you qualify for ESA severance, you may be entitled to significantly more under common law. Do not accept the first number without understanding what the law actually says you are owed.