The 2026 Guide to Wrongful Dismissal in Ontario

Wrongful dismissal in Ontario means you weren’t given enough notice, not that your employer needed a reason to let you go. What you may recover after a dismissal depends on three things: whether the termination clause in your contract is enforceable, how the four Bardal factors apply, and where you file. In most cases, you have two years to start a court claim.

What Does Wrongful Dismissal Actually Mean in Ontario?

Wrongful dismissal in Ontario is a breach-of-contract claim about whether you were given proper notice. While “wrongful” may sound like it means unfair, humiliating, or sudden, the legal meaning is much narrower: your employer did not provide the notice, or pay in lieu of notice, that you were owed. In a without-cause dismissal, the employer generally does not need to prove a reason for ending the employment.

The good news is that you do not have to prove your employer did something wrong in order to have a wrongful dismissal claim. The law presumes employees are entitled to reasonable notice when their employment is terminated without cause, unless an enforceable employment contract provides otherwise. This principle comes from Machtinger v. HOJ Industries Ltd., and any contractual limit on notice must still comply with Ontario’s minimum employment standards.

The way your employment ended can determine what type of claim you have. If your employer changed your pay, hours, or duties so significantly that you felt you had no choice but to leave, that is constructive dismissal. However, if your employer says you were dismissed for cause, the legal requirements are different, and the employer generally faces a much higher bar.

If you work in a federally regulated industry, such as banking, telecommunications, rail, air transportation, or interprovincial trucking, different rules may apply. Under the Canada Labour Code, eligible federally regulated employees may pursue an unjust-dismissal complaint, and the Canada Industrial Relations Board can order reinstatement in appropriate cases.

Can My Employer Fire Me in Ontario Without Giving a Reason?

Yes. In Ontario, your employer can generally end your employment without giving you a reason, as long as they provide the notice or pay in lieu of notice you are legally owed. However, there are important exceptions. Your employer cannot terminate you for certain prohibited reasons, even if they provide notice or a termination package.

For example, the Employment Standards Act (ESA) protects employees from being terminated because they took certain statutory leaves, including pregnancy, parental, sick, or family responsibility leave. The ESA also prohibits reprisals against employees who assert their employment standards rights, such as asking about unpaid wages or raising a workplace safety concern. In addition, the Human Rights Code prohibits discrimination in employment based on protected grounds, including disability, age, sex, family status, and race.

What if your employer says you were let go because of “restructuring”? That can be a legitimate reason for a without-cause dismissal. The issue arises if restructuring is being used as a cover for a prohibited reason. Looking at who else was dismissed, whether your position actually disappeared, and whether the role was later refilled may help to provide context.

How Much Severance Are You Owed If You Were Wrongfully Dismissed in Ontario?

There is no formula for calculating how much you may be owed after a wrongful dismissal. Ontario courts assess reasonable notice case by case using the four Bardal factors: the type of work you did, how long you worked for the employer, your age, and how difficult it may be to find comparable employment. The common-law notice period is often measured in months, but the idea that you are automatically entitled to one month per year of service is a myth. A short-service senior employee, for example, may be entitled to considerably more than that rule of thumb suggests.

As a rough illustration, notice periods may fall within ranges such as 1–4 months for a short-service, junior role; 6–14 months for a mid-career position after several years; and 18–24 months for a long-service or senior role. Notably, these are not fixed entitlements. Courts generally treat 24 months as the practical upper limit, although exceptional circumstances can justify more. 

Your compensation may also include more than base salary, depending on your circumstances — you may be owed bonuses, commissions, stock options or RSUs, benefits, as well as pension or RRSP contributions. Additional compensation may be possible for the way you were dismissed, if bad-faith conduct and punitive damages are applied. 

You also have a duty to mitigate your losses by making reasonable efforts to find comparable employment. Income earned during the notice period can reduce your damages, even if the new position pays less or has a lower rank.

If you have received a termination package, the amount offered may not reflect your full entitlement. Your common-law notice may be significantly greater than the statutory minimum, and it is worth understanding what most severance offers get wrong before you sign or respond.

Is My Termination Clause Still Enforceable in Ontario? What Changed in 2026?

On August 6, 2026, the Ontario Court of Appeal released Baker v. Van Dolder’s Home Team Inc., clarifying how courts should assess termination clauses. The decision makes it harder to invalidate a clause based solely on wording such as “at any time” or “for any reason.” Instead, courts must read the agreement as a whole and consider the objective intention of the parties.

But Baker did not overturn Waksdale v. Swegon North America Inc. — a termination provision that violates the ESA can still invalidate the broader termination scheme. The question is no longer simply whether particular words appear in the contract; it is whether the termination provisions, read as a whole, comply with the ESA.

Before accepting a termination package, ask three questions about your contract:

1. Does the contract’s “for cause” language comply with the ESA? Under Waksdale, termination provisions are considered together. An invalid for-cause provision can therefore affect the without-cause provision, even if your employer never relied on the for-cause language. The ESA’s “wilful misconduct, disobedience or wilful neglect of duty” standard is also different from the broader common-law concept of just cause.
2. Does any part of the termination language provide less than the ESA requires? Check the provisions dealing with termination notice or pay, statutory severance where applicable, benefits, and vacation pay. An employment contract cannot provide less than the minimum standards required by the ESA.
3. Is there an enforceable employment contract containing the clause in the first place? If there is no valid agreement, or circumstances surrounding when and how it was signed raise enforceability issues, the termination clause may not limit your rights. In that situation, the common-law presumption of reasonable notice may apply.

If the termination clause is enforceable, your entitlement may be limited to the statutory minimum. If it is not, you may instead be entitled to common-law reasonable notice, which can be significantly greater. Clause wording is technical, and the law changed in August 2026. If you are unsure whether your termination clause is enforceable, have your termination clause reviewed.

Should You File With the Ministry of Labour or Sue in Ontario Court?

This is one of the most important decisions in a wrongful dismissal claim because, in many cases, you cannot simply change course later. If you file an ESA complaint seeking termination pay or severance pay, you generally cannot then sue your employer for wrongful dismissal over the same termination. There is a limited two-week window to withdraw the ESA complaint and preserve the ability to bring a civil claim.

There are three potential routes you can take, and choosing one can affect the others:

Where you file	What you can potentially recover	The catch
Ministry of Labour (ESA claim)	Statutory termination pay and, where applicable, statutory severance pay	No fee to file, but an ESA claim for termination or severance can bar a civil wrongful-dismissal claim for the same termination.
Human Rights Tribunal of Ontario	Remedies for discrimination, including compensation for injury to dignity, feelings and self-respect	The Code contains rules limiting overlapping proceedings based on the same infringement.
Superior Court of Justice	Common-law reasonable notice and, where applicable, damages under the Human Rights Code	Litigation takes time and involves cost risks.

The Ministry can be useful where the issue is limited to statutory employment standards. However, common-law reasonable notice can be substantially greater than the ESA minimums, which are generally capped at eight weeks of termination notice or pay, plus statutory severance for employees who qualify. A court can also award compensation for a Human Rights Code infringement where there is another cause of action, allowing certain employment and human-rights issues to be addressed in the same proceeding.

The important point is not that one route is right for everyone. It is that filing a claim can affect your other options. Before choosing a forum, it is worth getting advice on what you may be entitled to and which remedies are available.

What Happens After You Sue Your Employer for Wrongful Dismissal in Ontario?

Most wrongful dismissal claims never reach a courtroom. In a typical without-cause case, you generally need to establish that you were employed, that your employment was terminated, and that you were not given the notice or pay in lieu of notice you were owed. The dispute is often less about whether a dismissal occurred and more about how much compensation is owed.

The process usually follows these steps:

1. Demand letter: Your lawyer sets out what you are owed and gives your former employer a deadline to respond. Many cases resolve at this stage.
2. Statement of claim: If the matter is not resolved, a claim is issued in the appropriate court.
3. Statement of defence: Your employer responds to the allegations and sets out its position.
4. Documentary discovery and examinations: The parties exchange relevant documents and may question each other under oath.
5. Mediation: Most civil lawsuits in Toronto, Ottawa and Windsor are subject to mandatory mediation, generally within 180 days after the first defence is filed.
6. Pre-trial and trial: If the case still has not settled, it may proceed toward trial, although many claims resolve before reaching this stage.

Where your claim is filed depends partly on its value: up to $50,000 is filed in Small Claims Court, up to $200,000 in the Superior Court (Simplified Procedure), and anything above $200,000 is held in the Superior Court with the ordinary civil litigation process.

As a rough range rather than a promise, a case resolved through an initial demand may take several months, while litigation that proceeds through discovery and mediation can take six to twelve months or longer. A case that goes all the way to trial can take substantially longer. Court rules and procedures can also change, so the process may evolve.

Our wrongful dismissal lawyers handle each stage of the process, with the goal of resolving your claim without a trial where possible.

What Does It Cost to Sue, and How Much of a Settlement Do You Keep?

Most Ontario employment lawyers will take a wrongful dismissal file on contingency, meaning their fee is a percentage of what you recover rather than an upfront hourly bill. Contingency fees commonly fall around 25% to 35%, although agreements vary. Hourly rates can also range from roughly $300 to $700 per hour. Disbursements, such as court filing fees and court reporters, may be deducted from the recovery separately, so ask exactly how they are handled.

There is also litigation risk. Losing a case can result in a costs award. In Baker v. Van Dolder, the employee was ordered to pay $2,500 in costs after his appeal succeeded for the employer. In the companion Li v. Wayfair Canada ULC appeal, the employee was ordered to pay $10,000. Under Ontario’s Simplified Procedure, recoverable costs are generally capped at $50,000, with disbursements capped at $25,000, although exceptions apply.

Employment insurance matters too. As of September 2026, a temporary federal measure means earnings paid because of a layoff or separation, including severance pay, are not deducted from EI benefits where the claim or applicable allocation begins between March 30, 2025 and October 10, 2026. After that measure expires, the ordinary EI allocation rules are expected to apply. Check the current Canada.ca rules when your claim begins.

Finally, tax can significantly change the amount you actually receive. A settlement relating to lost employment income will often be treated as a retiring allowance. Federal withholding is generally 10% on amounts up to $5,000, 20% from $5,001 to $15,000, and 30% above $15,000, although withholding is not necessarily your final tax bill. Certain retirement allowances may also qualify for an RRSP rollover, including eligible amounts related to employment before 1996.

That is why the headline settlement number is only part of the calculation. Before accepting an offer, ensure you understand the fees, disbursements, tax treatment, EI implications, and your expected net recovery.

A termination package is not necessarily the full amount you are entitled to receive. The terms of your employment contract, the enforceability of your termination clause, your length of service, compensation, and other factors can all affect what you may be owed.

Before you sign a release or choose how to pursue your claim, have your situation reviewed by an experienced wrongful dismissal lawyer. At Roberts & Obradovic Employment Law, we can assess your termination, explain your legal options, and help you understand what your claim may be worth.

Speak with our Ontario wrongful dismissal lawyers about your termination today.

Frequently Asked Questions About Wrongful Dismissal in Ontario

Being dismissed is frustrating and disorienting, and the deadline to act is shorter than most people expect. If you have been handed a package, or you are not sure whether your termination clause holds up, book a consultation with our Ontario wrongful dismissal lawyers before you sign anything.