Employment Law in Ontario: Advice for Employees and Employers

Losing a job, receiving a severance offer or facing a problem at work can move quickly. Law Wise advises employees and employers on Ontario employment matters, from reviewing a termination letter to drafting contracts and workplace policies. We are based in Mississauga, serving the entire GTA and Ontario, and your first consultation is free for 15 minutes, by appointment.

Which employment law applies to you

Most workplaces in Ontario are covered by the Employment Standards Act, 2000 (ESA), which sets minimum rules for pay, hours, vacation, leaves and termination. Employees of federally regulated businesses, such as banks, airlines, telecommunications companies and interprovincial trucking firms, are covered by the Canada Labour Code instead. Unionized employees usually raise workplace disputes through their union and the grievance process in their collective agreement.

Dismissal without cause (wrongful dismissal)

An Ontario employer can usually end employment without giving a reason, but it must give notice or pay instead of notice. After three months of employment, the ESA minimum for one employee is one week for less than a year of service, two weeks for one to three years, and one more week for each further year, up to eight weeks. Group terminations have their own, longer notice rules. Employees with five or more years of service may also be owed ESA severance pay of up to 26 weeks if the employer’s payroll is $2.5 million or more, or if 50 or more employees lose their jobs within six months because all or part of the business permanently closes.

These are only the minimums. Many employees are also entitled to “reasonable notice” under the common law, which is often much longer, unless a valid termination clause in the employment contract limits it. Courts read termination clauses strictly, and a clause that does not comply with the ESA may be unenforceable.

Termination for cause

Dismissal “for cause” means ending employment with no notice or pay in lieu because of serious misconduct. The bar is high. Under the ESA, an employee loses termination and severance pay only for wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer. An employer can sometimes justify cause under the common law and still owe the ESA minimums.

Constructive dismissal

If an employer makes a major change to a key term of the job without the employee’s agreement, such as a significant pay cut, a demotion or a move to a distant location, or makes the workplace intolerable, the law may treat it as a dismissal even though no one was fired. These cases turn on the facts and on acting promptly, so get advice before you resign or accept the change.

Severance packages and exit agreements

A severance offer usually comes with a release: you give up further claims in return for the package. Before you sign, compare the offer with your ESA minimums and your likely common-law notice, and check how salary continuance, benefits, bonuses, commissions and taxes are handled. You can ask for time to get advice. A short review shows whether the offer is fair or worth negotiating, and once a release is signed it is usually very hard to undo.

Employment contracts, non-competes and non-solicitation

Ontario bans non-compete agreements made with employees on or after 25 October 2021. The exceptions are narrow: the sale of a business where the seller becomes the buyer’s employee right after the sale, and certain senior executives. Non-solicitation and confidentiality clauses are still allowed, but they are enforced only if they are clear and reasonable. We review contracts before you sign and draft them for employers.

Employee or independent contractor?

What counts is the real working relationship, not the title in the contract. The ESA prohibits an employer from treating an employee as if they were not an employee, and if the employer says a worker is a contractor, the employer has to prove it. Misclassification can mean unpaid vacation pay, public holiday pay, overtime and termination pay.

Workplace harassment

The Occupational Health and Safety Act defines workplace harassment and workplace sexual harassment, including harassment that happens virtually. Employers must have a workplace harassment policy and a written program, and must investigate incidents and complaints. A worker cannot be punished for raising a concern.

Discrimination and human rights

Ontario’s Human Rights Code protects employees from discrimination and harassment because of grounds such as race, place of origin, citizenship, creed, sex (including pregnancy), sexual orientation, gender identity, age, family status and disability. Employers must accommodate employees’ needs up to the point of undue hardship. An application to the Human Rights Tribunal of Ontario generally must be filed within one year of the incident, or of the last incident in a series.

Leaves of absence

The ESA gives job-protected leaves, including pregnancy and parental leave, sick leave, family responsibility and bereavement leave, family caregiver, family medical and critical illness leave, long-term illness leave (up to 27 weeks, since June 2025) and domestic or sexual violence leave. An employer cannot penalize an employee for taking or planning to take a protected leave, and in a complaint the employer has to prove it did not.

Ministry of Labour claims

Unpaid wages, overtime, vacation pay, termination pay and severance pay can be claimed through the Ministry of Labour without going to court, generally within two years. Choose your route carefully: filing a claim for termination or severance pay generally prevents a court action for wrongful dismissal over the same termination unless the claim is withdrawn within two weeks, and starting a court action first prevents a Ministry claim.

Health and safety investigations and reprisals

Employers must take every precaution reasonable in the circumstances to protect workers. Workers have the right to know about hazards, to take part in solving health and safety problems, and to refuse work they believe is dangerous. An employer cannot punish a worker for following the law or raising a safety concern. We help with Ministry inspections and orders, workplace investigations and reprisal complaints.

Restructuring and sale of a business

When a business is sold and the buyer keeps the employees, the ESA treats their employment as continuing, so their years with the seller count with the buyer. Layoffs, restructuring and group terminations have their own rules. We advise buyers, sellers and employees on what these changes mean.

For employers

We help employers keep up with Ontario’s employment standards and avoid disputes: employment contracts with enforceable termination clauses, workplace policies, harassment investigations, and terminations handled correctly. The rules change often. For example, since 1 January 2026, employers with 25 or more employees must include the pay or a pay range in public job postings, say whether artificial intelligence is used to screen applicants, not require Canadian work experience, and tell interviewed applicants within 45 days whether a decision has been made.

Negotiation, mediation, court and tribunals

Most employment disputes settle through negotiation or mediation. If they do not, a claim may go to the Small Claims Court (up to $50,000), the Superior Court of Justice, the Human Rights Tribunal of Ontario or the Ministry of Labour, depending on the issue. Federally regulated, non-unionized employees with 12 months or more of service can make an unjust dismissal complaint under the Canada Labour Code within 90 days. We negotiate for you, attend mediation, and advise on the right place to bring a claim.

Common questions

This page is general legal information for Ontario, current as of 25 October 2026. It is not legal advice and does not create a lawyer-client relationship. Employment standards change often; for advice about your situation, speak with a lawyer.