The biggest mistake employees make is signing a release or severance agreement without getting legal advice first. Once you sign, your leverage is gone.
If you've been fired, forced out, underpaid, or mistreated at work, you likely have more legal options than you think. Most employees in Ontario don't realize how many rights they actually have until something goes wrong.
Types of Employment Law Claims
- Wrongful Dismissal. Fired without adequate notice or pay in lieu? Ontario's common law often entitles you to far more than the ESA minimum.
- Constructive Dismissal. Your employer didn't fire you, but made your job unbearable, changed your role drastically, or cut your pay. That can still be dismissal in the eyes of the law.
- Severance Pay Disputes. The package they offered might look generous, but it may be far less than you're entitled to.
- Workplace Harassment. Harassment and a toxic work environment are serious and sometimes compensable.
- Employment Contract Review. Before you sign or leave, having a lawyer review your contract can save you enormous grief.
Wrongful Dismissal in Ontario
In Ontario, employers can generally let you go for any reason or no reason at all. What they cannot do is let you go without proper notice, or pay in lieu of notice. The Employment Standards Act (ESA) sets a bare minimum. Termination notice or pay in lieu is usually one week per year of service, up to 8 weeks. Separately, and often overlooked, an employee with five or more years of service whose employer has an Ontario payroll of $2.5 million or more is also owed statutory severance pay of one week per year up to 26 weeks, which accrues for partial years and stacks on top of the notice. But most employees are entitled to significantly more under the common law: typically one month per year of service, depending on your age, seniority, and how specialized your role is.
"ESA minimums are a floor, not a ceiling. Your common law entitlement is almost always higher, sometimes dramatically so."
The Termination Clause Is Usually the Whole Case
Most employers try to cap what they owe by writing a termination clause into the employment contract limiting you to ESA minimums. Whether that clause actually holds up is, in a great many Ontario files, worth more than every other issue combined, because if it fails you fall back to common law reasonable notice, which can run to a month or more per year of service rather than a week.
Two decisions matter here. In Waksdale v. Swegon North America, the Court of Appeal held that a termination provision must be read as a whole: if the "for cause" portion is unenforceable because it falls below the ESA standard, the entire termination clause fails, including the "without cause" part the employer is actually relying on. A great many contracts still in circulation contain exactly that defect. More recently, courts have also struck clauses permitting termination "at any time" or "in the employer's sole discretion" as inconsistent with the ESA. Before accepting that a contract limits you to two weeks, have the clause read properly.
Constructive Dismissal
If your employer has made a significant, unilateral change to your employment, your pay, your title, your hours, your location, your responsibilities, you may have been constructively dismissed even though no one said "you're fired." Common examples: pay cut of 10–15% or more, demotion, forced relocation, or creation of a hostile work environment designed to make you quit. The key: you usually have to act relatively quickly. The Ontario Ministry of Labour publishes guidance on workplace standards.
Acting for Employers
Roughly half of this work is on the employer side, and it is a different exercise from representing a dismissed employee. The objective is usually to end an employment relationship without buying a lawsuit, and the decisions that determine whether that happens are made before the termination letter goes out, not after.
- Terminations, planned properly. What the contract actually permits, whether the termination clause survives Waksdale, what notice or pay in lieu is owed under the ESA and at common law, whether statutory severance is triggered, and how the offer and release should be structured.
- Just cause assessments. Cause is a high bar in Ontario and asserting it badly converts an ordinary severance negotiation into a wrongful dismissal claim with aggravated damages attached. It is worth an honest read before the decision is made.
- Departing employees. Enforcing restrictive covenants and confidentiality obligations, injunctions where a departing employee has taken client lists or solicited staff, and defending the same claims where a new hire is being pursued by a former employer.
- Constructive dismissal exposure. Reviewing a proposed restructuring, pay change, relocation or role change before it is implemented, when it can still be structured differently.
- Employment agreements. Termination clauses drafted to survive current case law, because a clause written before Waksdale is very likely unenforceable and the cost of that shows up years later at the worst moment.
Employers are generally the better-organised side of an employment dispute: the decision is planned, the budget is real, and the work is repeat. If you are an employer weighing a termination, the cheapest hour you will spend on it is the one before you act.
How Employment Cases Get Resolved
Most employment cases settle without going to court. A formal demand letter from a lawyer often results in a significantly improved offer. Employers and their HR departments do not want prolonged legal proceedings. A skilled employment lawyer can usually negotiate a fair settlement in a reasonable timeframe. For more, see our civil litigation page or browse the Toronto Criminal Lawyer Blog.
