Notice vs Severance Pay | Common Law Range | Limits | Duty to Mitigate
Two systems running at once.
The Act sets minimum notice and, for qualifying employees, severance pay.
The common law measures reasonable notice on the Bardal factors.
A contract can limit the common law entitlement, but only if valid.
Common law damages are reduced by earnings from new employment.
Quick Answer
What is the difference between ESA minimums and common law notice in Ontario?
The Employment Standards Act sets a statutory floor: minimum notice of termination based on length of service, and for qualifying employees a separate entitlement to severance pay. The common law is a different and usually larger entitlement to reasonable notice, assessed on the Bardal factors of character of employment, length of service, age and availability of similar work. An employee is entitled to common law notice unless the employment contract validly limits it. Statutory entitlements cannot be contracted out of, and common law damages are reduced by earnings from replacement employment.
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TWO DIFFERENT THINGS
A Floor and a Measure
The Employment Standards Act provides minimum notice of termination, or pay in lieu, based on length of service. Separately, employees of qualifying employers with sufficient service may be entitled to severance pay, which is an additional amount and is frequently overlooked entirely.
The common law is not an enhancement of the statutory scheme. It is a separate entitlement, arising from the employment contract itself, to reasonable notice of termination. Where it applies, the statutory amounts are credited against it rather than added to it.
The practical consequence is that an offer described as generous because it exceeds the statutory minimum may still be well below the entitlement. Comparing an offer to the Act tells you whether the employer has complied with the floor. It does not tell you whether the offer is reasonable.
HOW REASONABLE NOTICE IS MEASURED
The Bardal Factors
Reasonable notice is assessed on the factors set out in Bardal v Globe and Mail Ltd.: the character of the employment, the length of service, the age of the employee, and the availability of similar employment having regard to the experience, training and qualifications of the employee.
These are weighed together rather than applied as a formula, which is why any online calculator produces a range at best. Two employees with identical service can attract materially different notice periods because one is fifty eight in a narrow specialism and the other is thirty two in a field with constant hiring.
Courts have generally treated twenty four months as an upper range for most cases, reserving longer periods for exceptional circumstances. That ceiling is a guide rather than a rule.
WHEN THE COMMON LAW DOES NOT APPLY
Valid Limits, and Invalid Ones
An employment contract can limit entitlement to the statutory minimum, and where it does so validly the common law does not apply. This is why the enforceability of a termination clause is usually the first question in any dismissal.
It is also why so many disputes turn on drafting. A clause that could fall below the statutory floor at any point is void, and following the Court of Appeal decision in Waksdale an unenforceable just cause provision can invalidate the entire termination scheme.
Statutory entitlements themselves cannot be contracted out of at all. An agreement purporting to waive them is ineffective regardless of what anyone signed.
HOW WE WORK
What to Bring, and What to Expect
Bring your employment contract and any amendments, your start date, your compensation details including bonus and benefits, and the termination letter and offer as received.
Expect a two stage answer. First, does the contract validly limit your entitlement. Second, if it does not, what does the notice range look like on your particular facts. The second question only matters once the first is settled.
Expect a conversation about mitigation. Common law damages are reduced by what you earn in replacement employment during the notice period, so job searching affects the value of the claim. It does not weaken the claim, and failing to search can.
Common Questions
Frequently Asked Questions
Is severance pay the same as termination notice?
No. Under the Employment Standards Act they are separate entitlements. Minimum notice is based on length of service, while severance pay applies to qualifying employees of qualifying employers and is additional.
How is common law notice calculated?
On the Bardal factors: character of employment, length of service, age, and availability of similar employment. They are weighed together rather than applied as a formula, so the result is a range.
Can my employer limit me to the ESA minimum?
Only through a valid termination clause. Many clauses fail because they could produce a result below the statutory floor, or because an invalid just cause provision invalidates the scheme.
Does what I earn in a new job reduce my claim?
Common law damages are reduced by earnings from replacement employment during the notice period. Statutory entitlements are not reduced in the same way.
Is there a maximum notice period?
Courts have generally treated twenty four months as an upper range for most cases, with longer periods reserved for exceptional circumstances. It is a guide rather than a fixed rule.
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Severance and Notice | Ontario | Lexaltico LLP
Our lawyers assess whether a contract limits your entitlement and what the notice range looks like. Call, email, or arrange a consultation before signing anything.
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Failure to commence proceedings within applicable limitation periods may permanently bar your claim. In Ontario, the general limitation period is two (2) years from discovery under the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B. Seek legal advice promptly.
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particular period, does not oblige the firm to act, and does not stop, extend or satisfy
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Our line is answered 24 hours a day, every day of the year. Outside office hours calls are taken
by our intake service, who record your details and pass them to the firm. A lawyer responds during
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as giving legal advice, and no relationship arises from that call.
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College of Immigration and Citizenship Consultants Act, S.C. 2019, c. 29,
s. 292.
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Immigration consultants are regulated by the College, not by a law society,
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The initial assessment
The no-obligation initial assessment is a brief introductory
conversation. It does not include a review of your documents and does not constitute
legal advice.
The firm charges a fee for substantive consultations, including in civil litigation,
criminal defence and immigration matters. The firm may waive that fee at its discretion.
Any fee is disclosed in advance and credited in full toward your account if you retain the
firm.
Referral fees
Where we refer a matter to another firm, including through LexKonnect, we comply with Rule 3.6-6.1 of the Law Society of Ontario’s Rules of Professional Conduct. Any referral fee is set out in the Law Society’s standard referral agreement, signed by you before the referral proceeds, and no fee is payable to us unless and until the receiving firm has been paid for its work. You are never obliged to accept a referral and are free to retain any firm you choose. No referral arrangement affects the independent professional judgment of any lawyer at this firm.
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Calculators and estimators
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apply. Do not make a decision on a number produced by a calculator.
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under the law as it stood at the time. Past results do not predict or guarantee the result of any
other case.
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describes one person’s experience of one matter. They are not a promise, a
prediction or a guarantee about any other matter.
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platforms, all operated by others. We do not control them, we are not responsible for
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Other notices
Limitation periods
Failure to start a proceeding within the applicable limitation period may permanently bar
your claim. In Ontario the general period is two years from discovery
under the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B.
Shorter periods apply to many claims. Seek advice promptly. Nothing on this website extends a
limitation period.
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We aim to meet the Accessibility for Ontarians with Disabilities Act
and WCAG 2.1 Level AA. If any part of this site prevents you from reaching us, telephone
+1 416 333 6200 or write to
hello@lexaltico.com and we will provide the information
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