- Employers sometimes treat "redundancy" as if it were its own legal track with reduced obligations, similar to how "just cause" is sometimes, incorrectly, assumed to apply to any…
- Employers sometimes discover this gap only after a dismissed employee raises a complaint or retains a lawyer — at which point the "restructuring" label has done nothing to reduce the…
- The genuine business reason for a termination matters for some things — it can support the legitimacy of the decision if it's later challenged, and it may affect how the employer…
"We're not firing you — the position is being eliminated." It's a common way for Ontario employers to soften a difficult conversation, and often it's an accurate description of what's genuinely happening. But there's a persistent misconception attached to it: that calling a termination a redundancy, restructuring, or position elimination changes the employer's legal obligations. It generally doesn't.
Eliminating a position ends the employment relationship the same way any other without-cause termination does, from the perspective of the notice, pay, and paperwork obligations that follow. The label describes the business reason — it doesn't create a separate, lighter legal category.
The Common Misconception
Employers sometimes treat "redundancy" as if it were its own legal track with reduced obligations, similar to how "just cause" is sometimes, incorrectly, assumed to apply to any termination the employer considers justified. Neither assumption holds up. A termination is a termination for the purposes of notice and severance entitlements, whatever business reason sits behind it.
Myth vs. Reality
| Myth | Reality |
|---|---|
| A redundancy termination doesn't require statutory notice | It does — the same ESA notice rules apply based on length of service, regardless of the business reason |
| Calling it "restructuring" avoids severance pay obligations | Severance pay eligibility depends on employer payroll size and the employee's length of service, not the label used for the termination |
| A position elimination is automatically "no fault," so there's less paperwork | Final pay, ROE filing, and other administrative obligations apply the same way as any other termination |
| Employees can't challenge a termination framed as redundancy | Employees can still dispute the timing, the selection, or the adequacy of notice, the same as any other termination without cause |
Employers sometimes discover this gap only after a dismissed employee raises a complaint or retains a lawyer — at which point the "restructuring" label has done nothing to reduce the amount actually owed.
What Actually Changes When You Call It "Redundancy"
The genuine business reason for a termination matters for some things — it can support the legitimacy of the decision if it's later challenged, and it may affect how the employer explains the decision to the remaining workforce. What it does not do is change the ESA notice bands, eliminate severance pay eligibility, or remove the need for proper final pay and Record of Employment paperwork. Employees on the receiving end of a genuine restructuring are also often more receptive to the news when the explanation is honest and specific, rather than a vague reference to "company changes" — which is good practice for morale and part of the record an employer may need to rely on if the decision is questioned later.
The Mass-Termination Rules: When Numbers Matter
One place the numbers genuinely do matter is when an employer eliminates many positions at once. Ontario's ESA imposes additional notice requirements when 50 or more employees are terminated within a four-week period at an establishment:
| Employees Terminated (within 4 weeks) | Additional ESA Notice |
|---|---|
| 50 to 199 | 8 weeks |
| 200 to 499 | 12 weeks |
| 500 or more | 16 weeks |
(As of mid-2026 — verify current figures before relying on them.) This mass-termination notice is on top of, not instead of, each individual employee's own statutory entitlement. A restructuring that affects a large group can end up carrying meaningfully more obligation than the same number of terminations spread out individually would.
Steps for a Defensible Restructuring
- Confirm the actual scope — how many positions, over what timeframe, and whether the mass-termination thresholds are triggered
- Calculate each affected employee's individual ESA notice and check severance pay eligibility separately
- Review any termination clauses for enforceability before relying on them to limit obligations
- Document the genuine business rationale for the restructuring and the criteria used to select affected positions
- Prepare final pay and Record of Employment paperwork for each affected employee, on the applicable timelines
Frequently asked questions
If a position is truly eliminated and never refilled, does that reduce what's owed to the employee?
No. Whether or not the position is later refilled can be relevant to whether the stated reason was genuine, but it doesn't by itself change the notice or severance entitlements owed to the terminated employee.
Do I still need a termination letter if I'm calling it a restructuring?
Yes — a clear, accurate termination letter setting out the reason and the applicable notice or pay is good practice regardless of how the decision is framed internally.
Does eliminating one position trigger the mass-termination rules?
No — the additional mass-termination notice only applies once the applicable threshold, starting at 50 employees within a four-week period at an establishment, is met. A single position elimination is handled under the ordinary individual notice rules.
Can an employee challenge a genuine redundancy the same way they'd challenge any other termination?
Yes. An employee can still raise concerns about the adequacy of notice, the selection process, or the timing, regardless of how the employer characterizes the reason for termination.
Can I offer a departing employee more than the legal minimum as part of a restructuring?
Yes, and many employers do, particularly to secure a signed release and reduce the chance of a later dispute. Offering more than the statutory minimum is a negotiating and risk-management decision, not a legal requirement, and is worth weighing against the employee's likely common-law exposure.
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