Canadian Severance: Questions Answered

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The rules and traps around Canadian termination and severance pay in 2026 — especially why the statutory number is often just the start.

Frequently asked questions

What is common-law reasonable notice?

For non-unionized employees, courts often award 'reasonable notice' well above the ESA/Code minimum, based on age, service, position and re-employment prospects. It can be several months' pay.

Does the $2.5M payroll mean Ontario payroll?

No — courts have held it means the employer's total/global payroll, not just Ontario. So national and multinational employers usually meet it.

Do I get severance if I quit?

Generally no. Statutory termination and severance apply to without-cause dismissals and layoffs, not resignations or just-cause dismissals.

Is termination pay separate from severance?

In Ontario, yes — termination (notice) pay and severance pay are separate, and a qualifying employee gets both.

Should I sign the severance offer right away?

Not necessarily. Employers often offer the statutory minimum first. Because common-law entitlement can be higher, it's worth getting advice before accepting.

Does vacation pay come on top?

Yes — accrued vacation pay is a separate entitlement owed in your final pay, on top of termination and severance.