Mass Terminations and Layoffs in Ontario: What You Need to Know

In Ontario, a mass termination or mass layoff occurs when an employer lets go of 50 or more employees from the same workplace within a four-week period. This unique situation is covered by Ontario’s Employment Standards Act (ESA), which has specific rules for notice and severance in these cases. Here’s a breakdown of what you need to know:

What is a Mass Termination?

A mass termination is not like a regular dismissal. Under section 58 of the ESA, any time an employer lets go of 50 or more employees in the same location over four weeks, it counts as a mass termination. This means:

• The number of affected employees directly impacts the notice required.
• In some cases, separate locations may be treated as one “establishment” if connected, so it’s wise to consult an employment lawyer to determine if this rule applies.

Notice Requirements for Mass Terminations

Employers must provide a minimum notice period based on the number of employees affected:

• 50 to 199 employees: 8 weeks’ notice or pay in lieu
• 200 to 499 employees: 12 weeks’ notice or pay in lieu
• 500 or more employees: 16 weeks’ notice or pay in lieu

This notice requirement overrides the usual notice based on length of service, so even newer employees are eligible for this higher level of protection in a mass termination.

ESA Requirements: Informing the Ministry of Labour

When a mass termination occurs, Ontario employers must also notify the Ministry of Labour by submitting Form 1. This form includes:

• The number of employees affected
• The termination date
• The circumstances behind the layoffs

The employer must display Form 1 in a noticeable place in the workplace, ensuring employees are aware of the planned terminations and notice periods.

What About Severance Pay in Mass Terminations?

While the ESA outlines minimum notice, severance pay in Ontario goes beyond these minimums under common law, especially for senior employees or those facing difficulty finding new employment. For example:

• If you have 5+ years of service, the ESA requires a minimum of 1 week of severance per year of service (up to 26 weeks).
• Common law often entitles employees to as much as 24 months’ pay based on factors like age, job title, and how easy it will be to find similar work.

This compensation helps bridge the gap between jobs, giving you more stability during a challenging time. All non-unionized employees, including senior executives are owed full severance pay when they lose their jobs due to downsizing or corporate restructuring.

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.

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Is There a WARN Act in Ontario?

While the WARN Act in the United States governs mass layoffs, Ontario (Canada) doesn’t have a WARN Act. However, Ontario’s ESA provides protections in group termination situations. Although this distinction exists, it’s still essential to know your rights and consult an employment lawyer at Samfiru Tumarkin LLP if you’re affected by a mass termination.

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Don’t Rush to Accept a Severance Offer

Mass layoffs can feel overwhelming, but remember:

• You’re not required to accept a severance offer immediately.
• Employers may try to include clauses limiting your severance pay or adding restrictions on finding similar work (e.g. non-compete clauses)
• You have two years from your termination date to pursue full severance pay, so there’s time to ensure you’re getting what you’re owed.

Before signing any agreement, speak with an employment lawyer in Ontario who can review your severance package to ensure it reflects your full entitlements. The experienced employment lawyers at Samfiru Tumarkin LLP have helped thousands of non-unionized employees in Ontario secure full termination and severance pay when they’re let go.

If your termination pay doesn’t reflect your full entitlements, our team can review your severance package and ensure you receive the maximum compensation.

Contact us today to arrange a consultation, or use our Ontario Severance Pay Calculator to estimate what you may be owed.