Most employers in Ontario are governed by Ontario employment law, including the Ontario Employment Standards Act, 2000 (the Act).

However, some employers are governed by the federal law of Canada for employment, being the Canada Labour Code. Typically banks, transportation and telecommunication companies, for example, are subject to the Canada Labour Code. Sometimes there is debate about whether the Act or the Canada Labour Code applies, but not usually. 

The common law (i.e., judge-made law, from cases) applies generally to both cases.

While there are similarities and overlaps between the two jurisdictions, there are also differences depending whether an employee is protected by the Ontario Act or the Canada Labour Code. The law is not the same, especially when there is a termination of employment.

Many employers and employees do not fully understand or appreciate this distinction.

Below is a basic summary of some of the key elements of the Canada Labour Code in terms of termination of employment which applies to employees who are terminated from federally-related employers (for employment reasons).

Is Notice of Termination Required?

Yes. The Canada Labour Code requires employers to provide at least two weeks notice or pay in lieu of notice to employees with more than three months of employment, unless the employer has just cause. Severance pay is also required for employees with more than one year of service. Severance pay is calculated on the basis of two days pay per year of service, with a minimum of five days pay.

Common law notice also applies. Employees may be entitled to more reasonable notice or pay in lieu of notice than required by the Canada Labour Code (the statutory minimum amount). Generally, common law reasonable notice is calculated based on years of service, age, character or nature of employment and the availability of alternative employment.

Like in Ontario law, the employer and employee may agree, by written contract, to an express termination provision in advance, so long as it is not less than the statutory minimum requirements.


Layoffs that are more than temporary may be termination of employment under the Canada Labour Code. Like in Ontario law, a layoff may be considered to be a termination of employment unless the employees employment agreement specifically allows for temporary layoffs.

The Canada Labour Code also requires an employer to provide notice to the government and a trade union that represents affected employees and post notices in the workplace if it intends to terminate 50 or more employees in a four-week period or less. Notice must be provided at least 16 weeks before the date on which the first employees employment will be terminated.

Employers may also be required to establish a joint planning committee which includes employee representatives. The purpose of the committee is either to eliminate the need for termination or minimize the impact of the termination on employees and assist those employees in obtaining other employment.

Employee Protection on Termination:

Generally, non-union employees are entitled to notice of termination and, in some cases, severance pay.

Non-union employees who are not managers and who have at least one year of employment are protected against unjust dismissal under the Canada Labour Code.

In addition, employees cannot be terminated based on any of the prohibited grounds of discrimination under the federal Human Rights Act.

There are also protected leaves under the Canada Labour Code, including pregnancy and parental leave.

This WARDSPC BLAWG is for general information only. It is not legal advice, or intended to be. Specific or more information may be necessary before advice could be provided for your circumstances.

More information? We’re here to help – [email protected]  www.wardlegal.ca



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