Mass Layoffs in Ontario: Rights to Severance

What is a mass layoff in Ontario?

A mass layoff in Ontario happens when 50 or more employees are fired from the same workplace in a four-week period. It’s also referred to as a group termination.

In such cases, the Employment Standards Act (ESA) provides for higher minimum severance entitlements compared to a regular dismissal. However, non-unionized employees who lose their job in a mass layoff are still owed a full Ontario severance package, which can be as much as 24 months’ pay.

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How much severance pay am I entitled to if I’m let go during a mass layoff in Ontario?

When a mass layoff takes place in Ontario, the number of affected employees will determine the minimum amount of working notice or severance owed by the employer:

• If 50 to 199 employees are laid off, a company must provide eight weeks of notice or compensation.
• If 200 to 499 workers are let go, the employer must provide 12 weeks of notice or compensation.
• If 500 employees or more are cut, a company must provide 16 weeks of notice or compensation.

Additionally, if you have at least five years of service and are let go during a mass layoff, you are owed one week of severance pay per year of employment (up to a maximum of 26 weeks).

However, these amounts are the bare minimum employers in the province must provide during a mass layoff. Under common law, employees and senior executives are owed full severance pay when they lose their jobs due to downsizing or corporate restructuring.

Severance can be as much as 24 months’ pay. The amount of compensation you are owed is calculated using a number of factors, including:

• Age
• Length of service
• Position
• Ability to find new work

Our firm’s Severance Pay Calculator can help you figure out how much you are owed. If it falls short of what is appropriate, you have been wrongfully dismissed and should file a claim for compensation.

LEARN MORE
• Severance pay for provincially regulated employees
• Severance for federally regulated employees

How does working notice affect my severance pay?

While most employers prefer to provide severance pay and end their relationship with an individual immediately, some companies choose to give working notice instead.

If workers in Ontario receive working notice ahead of a mass layoff, it will reduce the amount of severance pay that they are owed after the period ends.

WATCH: Employment lawyer Lior Samfiru breaks down everything you need to know about working notice on an episode of the Employment Law Show.

If my employer is struggling financially, does that affect my severance pay?

In Ontario, an employer can’t reduce your severance entitlements even if they are experiencing some financial challenges.

During tough economic conditions, it’s going to be harder for you to find new employment, which means more compensation is owed.

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• Severance Pay in a Recession

Severance packages help you bridge the gap between jobs. If the gap is expected to be longer than usual, your compensation must reflect this.

Don’t accept a severance offer until you speak with an employment lawyer

While mass layoffs can be an overwhelming affair, your employer can’t force you to accept a severance offer before you leave a meeting or by a particular date.

Offers can sometimes include:

• A termination clause that tries to limit the amount of severance pay you can receive
• Non-compete clauses that prevent you from finding work elsewhere in your industry following a mass layoff

As long as you don’t sign the offer from your company, you have two years from the date of your layoff to pursue full severance pay.

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• I already accepted a severance package, what should I do?

Before accepting any offer, have an experienced Ontario employment lawyer at Samfiru Tumarkin LLP review the agreement to ensure you are receiving the compensation you are owed.