- Most employees dismissed without cause are entitled to advance written notice of termination, or pay in place of that notice, once they've completed a short minimum period of service.
- Statutory severance pay is a distinct, additional entitlement that only applies to eligible long-service employees at employers that meet a size threshold based on payroll, or in certain…
"Termination pay" and "severance pay" get used interchangeably in everyday conversation, but under Ontario's Employment Standards Act, 2000, they're two separate entitlements with different rules. Confusing termination pay vs severance pay in Ontario can lead a dismissed employee to misunderstand what they're actually owed — or to accept an offer that quietly combines the two without explaining the difference.
Here's how the two entitlements actually differ, and why you might qualify for one, both, or neither.
The Core Difference
| Termination Pay (or Notice) | Severance Pay | |
|---|---|---|
| What it compensates for | Lack of advance notice before dismissal | Loss of long-term investment in a job |
| Who qualifies | Most employees dismissed without cause, once minimum service is met | Only longer-service employees at larger employers, or those affected by a qualifying mass or permanent closure |
| How it's calculated | Graduated by length of service, capped at a set number of weeks | Also tied to length of service, with its own separate cap |
| Can you get both? | Yes — they are separate, stackable entitlements when both apply | Yes — severance pay is on top of termination notice or pay, not instead of it |
Termination Pay (or Notice), Explained
Most employees dismissed without cause are entitled to advance written notice of termination, or pay in place of that notice, once they've completed a short minimum period of service. The ESA sets this out on a graduated schedule tied to length of service, rising as service increases up to a capped maximum. As of mid-2026 — verify the current figures before relying on them — this is only the statutory floor; employers can offer more, and many employees are entitled to more under the separate common-law "reasonable notice" standard.
Severance Pay, Explained
Statutory severance pay is a distinct, additional entitlement that only applies to eligible long-service employees at employers that meet a size threshold based on payroll, or in certain large-scale permanent closure situations. As of mid-2026 — verify before relying on it — the entitlement is calculated by length of service and capped at a maximum number of weeks of regular wages. Not every dismissed employee qualifies for statutory severance pay, even if they qualify for termination pay.
Why the Confusion Happens
Severance offers are often described casually as a single lump sum — "your severance" — even though that number may actually be built from several different components: ESA termination pay, ESA severance pay (if eligible), and any additional common-law notice the employer is offering on top. Without breaking the number down, it's easy to assume the whole amount is "severance" when only part of it may technically be.
Checking Which Entitlements Apply to You
- Confirm your length of service, including time with a predecessor employer if your job transferred through a business sale.
- Check whether your employer's size and payroll would meet the threshold for statutory severance pay eligibility.
- Ask whether the offer separately identifies termination pay, severance pay, and any additional notice — a properly itemized offer makes this much easier to verify.
- Remember that a contract can validly limit you to the ESA minimums for both, but only with a properly drafted, enforceable termination clause.
Why Both Entitlements Matter Even If the Total Looks Reasonable
A severance offer that looks generous at first glance can still shortchange you if it quietly folds statutory severance pay into what should have been a separate, additional entitlement. Because termination pay compensates for lost notice and severance pay compensates for lost long-term investment in the job, treating them as interchangeable can understate what a long-service employee is actually owed. This is one of the more common places a severance offer gets the math wrong without being obviously incorrect on its face.
Frequently asked questions
If I don't qualify for severance pay, am I still owed anything?
Yes — you may still be entitled to ESA termination notice or pay in lieu, and potentially additional common-law notice, even if you don't meet the separate eligibility test for statutory severance pay.
Does resigning voluntarily entitle me to either payment?
Generally no. Both termination pay and severance pay are tied to an employer-initiated dismissal without cause, not a voluntary resignation, subject to narrow exceptions like constructive dismissal.
Can my employer combine both into one number without telling me which is which?
They can present a single total, but it's reasonable to ask for an itemized breakdown so you can confirm each statutory minimum is actually being met.
Is severance pay the same as a "severance package"?
No — in everyday language, a "severance package" usually refers to the entire offer, which may include ESA termination pay, ESA severance pay, additional common-law notice, and benefits continuation, not just the statutory severance pay entitlement specifically.
This is a litigation question
Start a file online — flat, published fees, reviewed by a licensed Ontario lawyer before a dollar is owed.