Termination Compensation Considerations

• Author: Paul Wearing
• Pages: 19-22

• 19

CHAPTER FOUR

Termination Compensation Considerations

What You Should Know

Employees and dependent contractors are entitled to minimum statutory

termination compensation as of right without negotiation if the employ-

ment relationship is ended by the employer without cause. Employees are

entitled to seek more than the minimum statutory amounts by launching

a claim for damages for wrongful dismissal in the courts if they choose to

do so, provided that they have not already f‌iled a complaint with the On-

tario Ministry of Labour that was not withdrawn before an order issued.

Written employment contracts can limit an employer’s liability for

termination compensation to the minimum standards of the Employ-

ment Standards Act, 20001 provided that a court does not interpret the

terms to be unconscionable and that the language or terms of the con-

tract are clear enough to rebut the presumption of common law reason-

able notice of dismissal.

When there is a termination of employment by involuntary resignation,

dismissal for cause, or dismissal not for cause, employment standards of-

f‌icers or courts are often called upon to resolve disputes about claims for

termination pay, severance pay, or pay in lieu of notice. At common law,

termination compensation is calculated on the global compensation of

the employee. In other words, it is calculated on the ordinary or base pay

and the commissions, health care benef‌its, life insurance, car allowance,

bonus, share options, and pension, if any.