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Ask an Expert

Severance Pay

Expert: Julie King

Lynn asked:

Am I entitled to severance pay if my employer has given me two months notice of termination of employment? We are not unionized and do not have a employment contract. My employment is in Ontario.

Julie King answered:

You would need to discuss your specific case with a lawyer that specializes in this area to get an exact answer depending on your specific circumstances. However, by referring to the information provided in Hiring, Managing, and Keeping the Best, by Monica Beauregard and Marueen Fitzgerald (ISBN: 0070864217) and other online resources, I can pass on some information that should be useful to you.

In their book, Beauregard and Fitzgerald explain that in a situation like yours the employer needs to provide working notice or pay in lieu of notice, or a combination of these two options.

On the Ontario Government's website, they explain that the amount of notice that is required depends on the period of employment. You'll find a chart outlining the required noticed based on the period of employment online at this link:

In addition to notice, Ontario is the only province that requires severance pay over and above notice. However, severance pay is only required when the employee has worked for the company for five or more years and one of two conditions is met:

  1. the employer's annual payroll is over 2.5 million dollars;
  2. the employer is no longer going to be carrying on all or part of the business, and 50 or more employees will lose their jobs for this reason in any six-month period.
    (Source: Chapter 4: Employer's Guide to the Employment Standards Act, Ontario Government)
If your employer runs a smaller firm, his business would not likely fall into either of these categories. However, if your situation does match these requirements, you can find out more information about the amount of severance pay that would be owed to you at this link online:

While the Employment Standards Act referenced above provides information on minimum requirements, the authors of Hiring, Managing, and Keeping the Best point out that these time periods are just minimums. They explain that your employer is also expected to give you enough time to secure a comparable position. It seems that there is no simple formula in this case, with the courts" decisions varying depending on the case and specific characteristics of the individual employee.

Depending on how you feel, you may wish to consult with a lawyer about your specific situation. Most lawyers will provide the first half-hour of your consultation for free, and if you are prepared for your meeting you should be able to pass on enough information to determine whether or not you should proceed. Maybe you'll decide to start by negotiating directly with your employer, proceeding with the assistance of a lawyer. Or you may decide that you will be able to find another job within two months, and focus on that instead.

I am not a lawyer, so please look at this information not as professional advice, but rather as useful facts that will help you decide whether you need to contact an employment lawyer. If you are looking to find a lawyer in Ontario, here is a website that can help you:

About the author

Julie King is the co-founder and managing editor of CanadaOne, Canada's first small business portal.

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