Termination, layoff or dismissal
From: Employment and Social Development Canada
Note: for the purpose of this web page, reference to “employee(s)” includes persons that are often referred to as “interns”. The reference to “employee(s)” excludes “student interns” who are undertaking internships to fulfill the requirements of their educational program.
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Termination of employment
The Canada Labour Code outlines requirements when an employer initiates a termination of employment. There are different requirements for individual termination and group terminations of employment.
Individual termination
If you are an employer and choose to terminate the employment of an employee, you must provide the employee with:
- at least, 2 weeks written notice before the date specified in the notice, or
- 2 weeks pay, in lieu of notice at the employee’s regular wages
Notice of termination of employment or pay in lieu of notice is not required if the employee:
- has not completed 3 consecutive months of continuous employment
- terminates their own employment
- is dismissed for just cause
- is on a temporary lay-off that does not constitute a termination of employment
- has signed an employment contract that provides a specific end date and that the work ends on that specified date
If the employee has completed 12 consecutive months of continuous employment, you must also provide the employee with severance pay.
Note: Effective February 1, 2024, when an employer terminates the employment of an employee who has completed at least 3 years of employment, they must either:
- provide the employee with written notice equivalent to at least 1 week per completed year of employment, up to a maximum of 8 weeks of notice
- pay the employee their regular wages in lieu of notice
A combination of notice and wages in lieu of notice will be permitted.
In addition, effective February 1, 2024, employers will be required to provide employees with a statement of benefits, at the time of termination of employment, that details their:
- wages
- vacation pay
- severance pay, and
- any other benefits and pay arising from their employment
Progressive discipline
As an employer, if you have concerns with an employee’s work performance, you should apply “progressive discipline” to clarify objectives and outline how the employee can improve performance.
For more information and guidance, please consult the progressive discipline page.
Employee terminating employment
As an employee, the Canada Labour Code does not require you to provide notice of termination to your employer. However, if you have signed an employment contract, it may contain requirements for you to do so.
Group termination
In this section
A group termination is the termination of employment of 50 or more employees working at a single industrial establishment either:
- on the same date, or
- within any 4-week period
In calculating the number of employees, the following are not included:
- employees employed on a seasonal basis, or
- employees employed on an irregular basis under an arrangement whereby the employee may decide to work or not to work when requested
Notice of group termination
If you are an employer planning a group termination of employment, you must:
- notify the Labour Program’s Head of Compliance and Enforcement in writing at least 16 weeks before the termination of employment is to take effect, and
- immediately give a copy of the notice to:
- the Minister of Employment and Social Development Canada (ESDC)
- the Canada Employment Insurance Commission, and
- any union representing the affected employees, or
- to the employees if they are not represented by a union, or
- immediately post the notice in a visible place within the workplace in which your employees are employed. This may include electronic posting if all affected employees can readily access the notice
This notice must include:
- the name of the employer
- location or establishment where the termination is to take place
- the nature of the industry of the employer
- number of affected employees (both unionized and non-unionized)
- date or dates of termination of employment
- union information, if applicable, and
- the reason(s) for the group termination of employment
Additional requirements
As an employer, when a group termination of employment occurs, you are required to:
- establish a joint planning committee with an employee representative
- cooperate with the Canada Employment Insurance Commission, and
- provide affected employees with a statement of benefits, which includes information on the employee’s:
- wages
- vacation pay
- severance pay, if applicable, and
- any other benefits and pay arising from employment
You must provide the statement of benefits not later than 2 weeks before the date of termination or earlier, if possible.
You must also give your employees the following pay:
- all outstanding wages, including overtime pay and general holiday pay owed
- vacation pay
- pay in lieu of notice of termination, if 2 weeks written notice was not provided, and
- severance pay if they had more than 12 months of continuous service
Note: In addition to providing the notice of group termination of employment, employers must follow the requirements for individual notice of termination of employment.
Requests for waiver
As an employer, you may request that the Minister of Labour waive certain requirements. Three types of waivers may be granted, including the requirement to:
- give 16 weeks’ notice
- provide employees with a written statement of benefits, and/or
- establish a joint planning committee when you can show that:
- it would be unduly prejudicial to your interests or of the affected employees
- it would be seriously detrimental to the operation of the industrial establishment
- similar measures are already in place
Note:
You may complete the form “Notice to the Head of Compliance and Enforcement of a group termination of employment and Request for waiver under the Canada Labour Code, Part III (ESDC-LAB1197)” to:
- provide notice to the Labour Program’s Head of Compliance and Enforcement
and/or - make an application to the Minister of Labour for a waiver of the group termination provisions
Any waiver granted will not exceed 6-months duration.
Joint planning committee
As an employer, you must establish a joint planning committee when a group termination of employment occurs. This should be done immediately upon giving notice.
The purpose of a joint planning committee is to:
- eliminate or reduce the need for the terminations of employment, or
- minimize the impact of the terminations of employment on affected employees and assist them in finding new employment
The committee must consist of at least 4 members. At least half must represent the affected employees, and the rest representing the employer. The members must hold their first meeting within 2 weeks of when the employer gave the notice to the Labour Program’s Head of Compliance and Enforcement (Head).
Within 6 weeks of when the employer gave notice, the committee must complete an adjustment program for affected employees setting out the adjustment measures.
In the event of a disagreement between the parties, the employees or employer representative may ask the Minister of Labour to appoint an arbitrator to help resolve the matter. This can be requested:
- 6 weeks after the employer submitted the notice to the Head, and if
- the joint planning committee has not completed the adjustment program, or
- the adjustment program has been developed but some members are not satisfied with the proposed program in part or in whole
Calculating the 4 consecutive week period
As an employer, you must calculate the 4-week period from the date of termination of employment of the first employee in the group whose:
- employment is to be terminated, and
- ends 4 weeks after
| Week | Number of terminated employments (employees) |
|---|---|
| Week 1 | 1 |
| Week 2 | 0 |
| Week 3 | 0 |
| Week 4 | 48 |
| Total = | 49 |
In the case of example 1, a group termination of employment did not occur because there are fewer than 50 employees affected during the 4-week period. In this example, 49 employees were affected.
| Week | Number of terminated employments (employees) |
|---|---|
| Week 1 | 48 |
| Week 2 | 49 |
| Week 3 | 0 |
| Week 4 | 1 |
| Total = | 98 |
In the case of example 2, a group termination of employment occurred because there are more than 50 employees affected during the 4-week period. In this example, 98 employees were affected.
| Week | Number of terminated employments (employees) |
|---|---|
| Week 1 | 1 |
| Week 2 | 49 |
| Week 3 | 0 |
| Week 4 | 0 |
| Total = | 50 |
In the case of example 3, a group termination of employment occurred because there are 50 employees affected during the 4-week period.
Temporary lay-off
As an employer, you may decide to lay off an employee from work for a short term with the intention to recall the employee back to work. This is called a temporary lay-off and it can happen for reasons such as a lack of work.
Examples of lay-offs that do not constitute a termination of employment are:
- when a lay-off is a result of a strike or lockout
- when the duration of the lay-off is 3 months or less
- when the duration of the lay-off is for more than 3 months but not more than 12 months, and the employee maintains recall rights under a collective agreement
The full list of lay-offs that do not constitute a termination of employment can be found in the Canada Labour Standards Regulations.
When a lay-off becomes termination
A lay-off becomes a termination of employment when the conditions of temporary lay-off no longer apply. A lay-off can also become a termination if an employee does not return to work when recalled. If this occurs, the employee is considered to have terminated their employment.
Employer obligations
If a lay-off becomes a termination of employment, the individual termination of employment requirements apply.
Severance pay
Employer obligations
As an employer, if you terminate the employment of an employee, you must provide the employee who has completed at least 12 consecutive months of continuous employment with severance pay.
Employees, who have 12 consecutive months of employment, that were subject to a lay-off or dismissal (due to lack of work or the end of a work function) that resulted in a termination of employment, are entitled to severance pay.
Severance pay is the greater of the following:
- 2 days wages, at the employee’s regular rate of wages, for each full year that an employee has worked for an employer before they were terminated, or
- 5 days wages at the employee’s regular rate of wages
In addition, you must provide a notice of termination or a pay in lieu of notice.
Exceptions
As an employer, you are required to pay severance pay in instances of individual and group termination of employment.
Severance pay is not required when:
- the employee’s lay-off does not result in a termination of employment
- the employee’s employment contract contains an end date and the contract ends
- the employee is dismissed for just cause, or
- the employee terminates their own employment
Unjust dismissal
Part III of the Canada Labour Code prohibits the unjust dismissal of employees who:
- have completed at least 12 months of continuous employment with the same employer, and
- who are not covered by a collective agreement
Federally regulated employers found to have unjustly dismissed their employees may be ordered to reinstate and/or compensate the affected employees.
Affected employees who believe they have been unjustly dismissed can file an unjust dismissal complaint with the Labour Program.
For more information, please consult the eligibility and timelines requirements.
Reasons for dismissal
Upon receipt of an unjust dismissal complaint, the complainant or the Labour Program’s Head of Compliance and Enforcement may request in writing that the employer provide a written statement. The statement must give the reasons for the dismissal, and it must be provided within 15 days after the request is made.
It is the employer’s responsibility to demonstrate that the complainant’s dismissal was for valid reasons (disciplinary, etc.).
Mediation
The Labour Program will first attempt to resolve the complaint. This may include assisting the parties to settle the complaint through mediation.
If the parties choose not to participate in mediation or cannot resolve the complaint, the Head of Compliance and Enforcement will send the complaint to the Canada Industrial Relations Board (Board) who will hear the matter and make a determination.
Decision of the Board
If the Board decides that a complainant has been unjustly dismissed, the Board may, by order, require the employer who dismissed the complainant to:
- pay the complainant compensation, not higher than the amount of money that is equal to what would have been paid by the employer if they had not dismissed them
- reinstate the complainant in their employment, and
- order the employer, in a fair way, to resolve or reduce any consequences of the dismissal
Constructive dismissal
Unjust dismissal may also include cases of “constructive dismissal”. A constructive dismissal is when an employer makes numerous or significant changes to the terms of employment that the employee does not agree with, which results in the employee terminating their employment.
In these circumstances, the affected employees may file a monetary complaint for termination pay and/or severance pay or an unjust dismissal complaint.
For technical guidance on constructive dismissal, please consult the Constructive Dismissal (IPG-033).
Pursuing a civil remedy against your employer
As an employee, filing a complaint under the Canada Labour Code does not prohibit you from filing civil action against your employer for wrongful dismissal while the Labour Program investigates your unjust dismissal complaint.
Contact us
For more information, contact the Labour Program.
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