Statutory Minimum Entitlement to Severance

In order to qualify for severance pay under the Ontario Employment Standards Act, an employee must have five years service with the employer and be employed by a company or business that has an annual payroll of 2.5 million dollars or more. Where 50 or more employees have been terminated in a period of six months or less, as a result of the permanent discontinuance of all or part of the business of an employer, those employees with a minimum five years service will qualify for severance even though the company or business does not have an annual payroll of 2.5 million dollars or more. There are certain exceptions which apply to special classes of employees. The severance pay entitlement of those who qualify for severance pay under section 65 of the Act is equal to one weeks' regular wages or salary for every year or part year of employment, to a maximum of 26 weeks.

Federally regulated employees are entitled to severance under the Canada Labour Code in the amount of two days wages for each completed year of continuous service or five days wages, which ever is greater. There are exceptions which apply in special cases.

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