Termination Without Cause

When your employment is terminated without cause, you are entitled to reasonable notice. Our lawyers ensure you receive the full measure of your common law and statutory entitlements.

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Reasonable NoticeBardal FactorsESA EntitlementsWrongful DismissalBad Faith Damages

Terminated employees are entitled to reasonable notice or pay in lieu. The common law entitlement almost always exceeds the ESA minimum.

Quick Answer

What is the difference between termination for cause and termination without cause?

Termination for cause means the employer alleges misconduct serious enough to justify immediate dismissal without notice or severance. The employer bears a heavy legal burden under McKinley v. BC Tel (2001 SCC 38). Termination without cause means the employer ends the relationship for business reasons or without alleging misconduct, and the employee is entitled to reasonable notice or pay in lieu.

Ontario law · Reviewed by Lexaltico LLP, Toronto · 15-minute initial assessment

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WRONGFUL DISMISSAL

Understanding Your Rights After Termination Without Cause

In Ontario, an employer may terminate an employee’s employment at any time without cause, provided the employee receives adequate notice of termination or pay in lieu. The Employment Standards Act, 2000 establishes minimum entitlements: termination pay of one week per year of service up to a maximum of eight weeks, plus severance pay equal to one week per year of service (up to 26 weeks) for employees with five or more years of service at employers with a payroll of $2.5 million or more.

However, the ESA minimums represent the floor, not the ceiling, of your entitlements. Under the common law, employees are entitled to reasonable notice of termination, determined by the Bardal factors: the character of the employment, the length of service, the age of the employee, and the availability of similar employment. Common law notice periods routinely exceed ESA minimums and have been awarded at up to 26 months in exceptional cases.

At Lexaltico LLP, we assess your full entitlement under both the ESA and the common law, challenge deficient termination packages, and pursue litigation where employers refuse to meet their legal obligations.

REASONABLE NOTICE

The Bardal Factors and How Courts Calculate Notice

The framework for calculating reasonable notice was established in Bardal v. Globe & Mail Co. (1960), 24 DLR (2d) 140, and has been refined over six decades of jurisprudence. The four Bardal factors are not mechanically applied, courts conduct a holistic assessment, considering the totality of the circumstances. Additional considerations may include the employee’s inducement to leave secure employment (Wallace v. United Grain Growers Ltd., [1997] 3 SCR 701), the state of the labour market in the employee’s industry, and the employee’s health at the time of termination.

In Lynk v. Denny’s Restaurants of Canada Inc., 2001 BCCA 353, and numerous Ontario decisions, courts have recognized a rough upper limit of 24 months for reasonable notice, with exceptional circumstances justifying awards beyond this threshold. Factors that push toward the upper range include long service, advanced age, specialized skills with limited market demand, and inducement from secure prior employment.

Our lawyers analyze your situation against the current body of case law to provide a realistic assessment of your reasonable notice entitlement and to advocate effectively in negotiations and litigation.

DAMAGES AND REMEDIES

Compensation Beyond Basic Notice

Wrongful dismissal damages extend beyond base salary continuation during the reasonable notice period. Under the principle in Paquette v. TeraGo Networks Inc., 2016 ONCA 618, employees may be entitled to bonus and incentive compensation they would have earned during the notice period, unless the plan language unambiguously excludes terminated employees from eligibility. Similarly, benefit continuationor damages in lieu of benefits, and pension entitlements that would have accrued during the notice period are compensable.

Where the employer has acted in bad faith in the manner of dismissal, additional damages may be available. Following Honda Canada Inc. v. Keays, 2008 SCC 39, the Supreme Court clarified that bad faith damages in the employment context compensate for independently actionable conduct during the termination process, such as making false allegations, conducting a sham investigation, or acting with deliberate callousness, rather than extending the notice period itself.

Punitive damages are available in exceptional cases where the employer’s conduct is high-handed, malicious, or represents a marked departure from ordinary standards of decency. In Boucher v. Wal-Mart Canada Corp., 2014 ONCA 419, the Court of Appeal upheld a substantial punitive damages award where the employer’s conduct in the lead-up to termination was found to be egregious and reprehensible. We pursue every available head of damages to ensure you are fully compensated for your loss.

Common Questions

Frequently Asked Questions

What is the difference between termination for cause and termination without cause?

How much notice am I entitled to under the common law?

Common law reasonable notice depends on the Bardal factors: character of employment, length of service, age, and availability of similar employment. Notice periods typically range from a few months for junior employees with short tenure to 24 months or more for senior, long-service employees. There is no rigid formula, courts conduct a holistic assessment based on the individual circumstances.

Can I sue if my employer only offers ESA minimum termination pay?

Yes. Unless your employment contract contains an enforceable termination clause that limits your entitlement to ESA minimums, you are likely entitled to common law reasonable notice, which is almost always significantly higher. Many termination clauses are unenforceable after Waksdale v. Swegon North America Inc. (2020 ONCA 391), restoring the employee’s common law rights.

Do I have a duty to mitigate after being terminated?

Yes. You have an obligation to make reasonable efforts to find comparable employment during the notice period. However, the employer bears the burden of proving you failed to mitigate, and you are not required to accept any available job, only comparable employment. Following Brake v. PJ-M2R Restaurant Inc. (2017 ONCA 402), the duty is assessed based on the reasonableness of your efforts, not the outcome.

What are bad faith damages in wrongful dismissal?

Bad faith damages compensate for employer misconduct during the termination process that causes additional harm beyond the loss of the employment relationship. Under Honda Canada Inc. v. Keays (2008 SCC 39), this requires independently actionable conduct such as making false allegations, conducting a sham investigation before termination, deliberately misleading the employee, or acting with callous disregard for the employee’s circumstances.

Am I entitled to bonus and commission during the notice period?

Potentially. Under Paquette v. TeraGo Networks Inc. (2016 ONCA 618), the Ontario Court of Appeal held that an employee is entitled to compensation for bonus and incentive payments during the notice period unless the bonus plan language unambiguously removes that entitlement. Ambiguous plan language is construed in favour of the employee.

How long do I have to bring a wrongful dismissal claim?

Under Ontario’s Limitations Act, 2002, you generally have two years from the date of termination to commence a wrongful dismissal action. However, you should seek legal advice promptly after termination to preserve evidence, comply with any release deadlines, and begin mitigation efforts.

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