How to Terminate an Employee in Ontario: Notice, Pay & ROE (2026)

Without cause vs. just cause

Most terminations in Ontario are "without cause" — you are ending the relationship for business reasons, not misconduct, and the employee is owed their statutory (and often common-law) entitlements. "Just cause" — dismissal for serious misconduct with no notice or pay — is a very high legal bar that requires thorough, progressive documentation and rarely succeeds without it. This article is general guidance for employers, not legal advice; complex or high-risk terminations warrant a professional review.

ESA termination notice (or pay in lieu)

Under the Employment Standards Act, 2000, once an employee has worked at least three months you must give written notice of termination — or pay in lieu — based on length of service, up to a maximum of eight weeks:

• 3 months to under 1 year: 1 week
• 1 to under 3 years: 2 weeks
• 3 to under 4 years: 3 weeks
• 4 to under 5 years: 4 weeks
• 5 to under 6 years: 5 weeks
• 6 to under 7 years: 6 weeks
• 7 to under 8 years: 7 weeks
• 8 years or more: 8 weeks (the ESA maximum)

When ESA severance pay also applies

Severance pay is a separate entitlement from termination pay — and it is not owed in every termination. An employee generally qualifies only if they have five or more years of service AND the employer either has a global (Canada-wide) payroll of at least $2.5 million, or severs 50 or more employees within a six-month period. Where it applies, severance is roughly one week of pay per year of service (including a fraction for partial years), up to a maximum of 26 weeks — paid on top of termination pay.

Remember: the ESA is only the floor

Statutory minimums are not the whole story. Unless the employee signed a contract with an enforceable termination clause, they may be entitled to common-law reasonable notice, which is often far greater — months rather than weeks — based on factors like age, length of service, seniority of the role, and how hard it will be to find comparable work. A well-drafted employment agreement is the single most effective way to control this exposure.

Final pay, benefits, and the ROE

Termination pay must generally be paid within seven days of the termination date or on the next regular payday, whichever is later, and includes any outstanding vacation pay. Benefits typically continue through the statutory notice period. You must file a Record of Employment (ROE) with Service Canada — generally within five calendar days of the interruption of earnings. Severance and notice can carry different tax treatment (a retiring allowance), so confirm payroll coding and T4 reporting.

Run the meeting professionally

Plan the conversation: choose a private setting, have two company representatives present, keep the message brief and clear, hand over the termination letter and package in writing, allow the employee to ask questions, and arrange a dignified departure. Make any offer "without prejudice" and give the employee reasonable time to seek independent legal advice before signing a release.