How Much Severance Am I Owed When Fired or Laid Off in Canada?

What you’re actually owed, by jurisdiction

The amount depends first on which law covers your job: the federal Canada Labour Code, Ontario’s Employment Standards Act, 2000, or Alberta’s Employment Standards Code. These are not interchangeable, and none of them is the last word if your common law rights are larger.

Every one of these is a statutory minimum. What a court would award under common law (the judge-made rules that apply on top of the statute) can be, and often is, substantially higher.

Why the federal, Ontario, and Alberta rules differ

Which set of rules applies turns on who regulates your employer, not on where you live. Banks, airlines, telecommunications companies, and other federally regulated industries fall under the Canada Labour Code no matter which province the workplace is in. Everyone else falls under their province’s employment standards law, so an Ontario retail employee and an Alberta oilfield employee are governed by different statutes even doing similar work.

Within a given statute, the main driver of the amount is length of service. Ontario’s termination pay schedule and Alberta’s notice schedule both increase in bands tied to completed years worked, and both cap at 8 weeks (Ontario.ca; Alberta.ca). The federal Code follows the same shape but caps lower, also at 8 weeks for notice, with a separate severance pay layer on top (Canada.ca).

The second driver is whether a separate “severance pay” entitlement exists at all. Ontario is the only one of the three jurisdictions in this comparison with a distinct severance pay category beyond termination pay, and it only applies once an employee has 5 or more years of service and the employer’s payroll reaches $2.5 million or more, capped at 26 weeks (Ontario.ca severance guide). Alberta’s Code has no equivalent second layer; its notice/pay schedule is the whole statutory entitlement (Alberta.ca).

The layer above the statute: common law reasonable notice

Ontario’s Employment Standards Act, 2000 explicitly states that its notice and severance provisions are minimums, and that an employee may have greater rights at common law (Ontario.ca). Alberta’s government guidance says the same thing about its Code: a terminated employee “may be entitled to more than the minimum amount of termination notice or pay required under employment standards legislation” (Alberta.ca).

That “more” comes from reasonable notice, the common law rule requiring an employer to give enough notice, or pay in place of it, before ending an employment relationship without cause. The leading test, from Bardal v Globe & Mail Ltd, weighs the character of the employment, length of service, age, and the availability of similar employment given the person’s experience, training, and qualifications (Bardal v Globe & Mail Ltd). Unlike the fixed statutory schedules, there is no simple weeks-per-year formula: a court weighs all four factors together, which is why common law notice periods can run well beyond the 8-week or 26-week statutory caps for senior, long-service, or older employees in specialized roles.

A worked example

An Ontario employee has worked for a retailer for 3 years and 2 months and is dismissed without cause. The employer’s payroll is under $2.5 million. Under the Employment Standards Act, 2000, someone who has worked more than 3 but less than 4 years is entitled to 3 weeks’ termination pay (Ontario.ca). Because the employer’s payroll doesn’t reach the $2.5-million threshold, the separate severance pay entitlement does not apply, regardless of years of service (Ontario.ca severance guide). That 3 weeks is only the statutory floor; this employee could still pursue a common law reasonable notice claim for more.

Common mistakes

• Treating the statutory minimum as the full entitlement. Both Ontario and Alberta guidance confirm the statute sets a floor, not a ceiling; many employees accept the ESA or Code amount without checking whether common law reasonable notice would pay more (Ontario.ca; Alberta.ca).
• Assuming Ontario severance pay applies automatically. It only applies with 5+ years’ service at an employer with a $2.5-million-plus payroll; below that threshold, only termination pay applies (Ontario.ca severance guide).
• Assuming Alberta works like Ontario. Alberta’s Employment Standards Code has no separate severance pay category comparable to Ontario’s; the notice/pay schedule capped at 8 weeks is the entire statutory entitlement (Alberta.ca).
• Applying provincial rules to a federally regulated job. Employees of federally regulated employers (banking, telecom, interprovincial transport) are governed by the Canada Labour Code’s notice and severance rules, not their province’s employment standards act, regardless of where they work (Canada.ca).
• Overlooking the federal severance pay layer. Federally regulated employees sometimes assume the notice period is their whole entitlement and miss the separate statutory severance pay owed under section 235 of the Code once they’ve completed 12 months of service (Canada Labour Code s 235).