What Is Wrongful Dismissal in Ontario?

Losing your job can be stressful and overwhelming. If you were recently terminated, you may be wondering whether your employer acted legally.

In Ontario, employers are permitted to terminate employees in many circumstances. However, they must comply with specific legal obligations when doing so. If those obligations are not met, the termination may qualify as wrongful dismissal.

Understanding what wrongful dismissal means — and how it affects your severance rights can significantly impact the compensation you may be entitled to receive. If you are unsure about your rights, obtaining legal advice can help clarify your options and next steps.

When Does a Termination Become “Wrongful”?

Wrongful dismissal typically occurs when an employer:

Terminates an employee without providing proper notice, or
Fails to provide adequate severance pay in lieu of notice

Under Ontario law, employees are entitled to:

Minimum notice or termination pay under the Employment Standards Act (ESA)
Potentially much higher compensation under common law

Many employees are surprised to learn that the minimum amounts under the ESA are often significantly lower than what courts may award under common law principles.

Termination Without Cause vs. Termination For Cause

1. Termination Without Cause

In Ontario, an employer does not need to provide a reason to terminate employment. However, they must provide proper notice or severance compensation. This is the most common type of termination in Ontario workplaces.

2. Termination For Cause

Termination “for cause” is rare and requires serious misconduct, such as:

Theft
Fraud
Serious insubordination
Gross negligence

The legal threshold for cause is high. Employers who improperly allege cause may expose themselves to wrongful dismissal claims.

How Much Severance Am I Entitled To in Ontario?

Severance is not calculated using a simple formula.

Courts consider factors such as:

Length of service
Age
Position and level of responsibility
Availability of comparable employment

Because severance depends on multiple legal factors, many Ontario employees underestimate what they may be entitled to receive.

If you would like a preliminary estimate, you can use our Ontario severance calculator to obtain a general estimate based on your circumstances.

While the Employment Standards Act provides minimum notice (for example, one week per year of service), common law entitlements can be significantly higher — sometimes several months of compensation.

For this reason, it is often advisable not to sign a severance offer without first understanding your full legal rights. If you would like your severance package reviewed, you can request a consultation here.

Constructive Dismissal: When You Aren’t Officially Fired

Wrongful dismissal does not always involve a direct termination.

In some cases, employees experience what is known as constructive dismissal in Ontario, which occurs when an employer makes significant unilateral changes to the terms of employment.

Constructive dismissal may arise where an employer:

Reduces your compensation
Demotes you
Drastically alters your job duties
Creates an intolerable or toxic work environment

If an employer fundamentally changes the terms of employment without your consent, the law may treat the situation as a termination.

Time Limits to Act

Employees generally have time to assess their options before accepting a severance offer. However, delay can affect legal strategy.

If you believe you were wrongfully dismissed in Ontario, it is important to seek legal advice promptly to understand your rights and available remedies. Speaking with an employment lawyer can help clarify whether your severance offer reflects your full legal entitlement.

Speaking With an Employment Lawyer in Ontario

If you were recently terminated anywhere in Ontario, reviewing your severance package with an employment lawyer can help determine whether the offer reflects your full legal rights.

A proper legal review can assess:

Whether the termination was lawful
Whether the severance offered is adequate
Whether additional compensation may be available

If you would like to discuss your situation confidentially, you may request a consultation here.

This article is provided for general informational purposes only and does not constitute legal advice.