End of Employment in Canada
Capital
Ottawa
Official Language
English, French
Currency
Canadian Dollar
Payroll cycle
Bi-Monthly
Quick facts about Canada
Canada is one of the United States' most important economic partners. Home to one of the best public education systems in the world, Canada is a booming talent hub across all industries, including tech, financial services, healthcare, and agriculture. Despite being a relatively small country by population, Canada's GDP is approaching $2 trillion. Companies looking to expand globally can hire top Canadian talent by partnering with an EOR service like Via.
End of employment standards in Canada vary depending on the provincial/territorial regulations. However, the termination requirements for employers are similar in each province.
Canadian law strongly encourages employers to work with their employees before they decide to end employment. End of employment in Canada includes termination requirements, disciplinary procedures, required notice periods, and severance payments.
Termination in Canada
In general, Canada labor code only allows employers throughout the provinces to terminate employees:
During probationary periods
For gross misconduct (unlawful misconduct, insubordination, and willful misconduct)
When an employee resigns
If an employer lays an employee off without cause, employment law and practices insist that employees are entitled to severance in lieu of notice.
Termination in Quebec
Employees in Quebec are further protected from termination after working for a company for at least two years. Unless the employee commits serious misconduct, employers will find that terminations are difficult to conduct without legal repercussions.
Disciplinary procedure
Instead of terminating employees right away, the Canadian government encourages employers to create a progressive disciplinary policy:
Verbal warning (for minor infractions) with resources to improve
Written warning
Suspension without pay as a final warning
Termination (for when suspension or conduct breaches the employment relationship)
Employers should give employees the opportunity to correct and understand their behavior when they are given a disciplinary notice. Documentation of the warnings and meetings the warnings were given should be recorded in the case that termination is necessary in the future.
Notice period for employees
Employees that do not belong to a union (except in Nova Scotia or Quebec), or federally regulated jurisdictions, are able to be terminated without a just cause. However, employers usually give payment instead of a notice in order to avoid any civil litigations (which are common) brought forth by disgruntled employees.
When an employer goes forward with terminating an employee, they must provide their employee with a written notice of termination in person or by email. Periods of notice for termination of employment depend on the length of service to the company.
Once terminated, employers must process the employee’s final paycheck by the next pay period and issue a Record of Employment (ROE). Employers must report the termination to their local government and pay any unpaid bonuses. Employers can be fined up to $2,000 CAD if they don’t follow the proper procedures for termination. In serious cases, employers can receive six months of imprisonment.
Employees may be fined even more depending on the severity of the case and should usually consult legal counsel to avoid violating Canada’s Human Rights Code and other labor codes in the country. Many employees in Canada bring forth civil cases to the court system for wrongful termination, so it’s of the utmost importance that employers follow the proper procedures for termination.
Employee resignation
If an employee wants to resign, they need to follow the proper procedures to avoid breaching their employment contract.
Employees should:
Submit a letter of resignation and their expected last day of employment
Most employment contracts in Canada state a specific notice period for resignation, but if one does not exist, “reasonable notice” is considered at least 2 weeks
If they want severance payment (which isn’t required for resignation), workers need to prove gross misconduct in the workplace, harassment, or violation of their Human Rights
Layoffs in Canada
In Canada, layoff period refers to the period of time that begins when a company lays off an employee and lasts until the company's current situation improves enough for the business to hire them back. This layoff isn't supposed to be permanent, and employees are able to keep their benefits during the layoff period.
Once a set layoff period passes, the layoff turns into dismissal. The following include the weeks or consecutive months that constitute a layoff if an employee is out of work in each province:
Province | Layoff time |
Alberta | Exceeds 90 days in a period of 180 days |
British Columbia, Newfoundland, Labrador, Yukon | 13 weeks in a 20-week period |
Ontario | 13 weeks of layoff in a 20-week period with no benefits OR 35 weeks of layoff in a 52-week period with benefits provided |
Quebec | 6 months of continuous layoff |
Saskatchewan | 6 consecutive working days |
Manitoba | 8 weeks of layoff in a 16-week period |
Prince Edwards Island | No set period of time |
New Brunswick and Nova Scotia | Layoffs lasting more than 12 months |
Northwest Territories and Nunavut | 45 days out of 60 consecutive days |
Unions
Companies that don’t belong to a union don’t need to directly consult with employees during layoffs.
Unionized companies will have collective agreements that set out the exact procedures that must be followed in the case of layoffs. These agreements usually set forth the order in which employees can be laid off (order of seniority).
Notice period for employers in Canada
Notice periods for employees will differ from province to province. Notice periods depend on the length of service to the company, age, and specifics of that job like finding comparable work.
Employers are allowed to pay in lieu of notice; however, it’s better to give notice based on the territory to avoid disgruntled employees and civil litigation.
For each territory, general notice times are as follows:
Alberta
Less than 3 months of service: no notice
Between 3 months and 2 years: 1 week
2-4 years: 2 weeks
4-6 years: 4 weeks
6-8 years: 5 weeks
8-10 years: 6 weeks
10 years and over: 8 weeks
British Columbia
Less than 3 months of service: no notice
3-12 months: 1 week
1-2 years: 2 weeks
3 years: 3 weeks
3 years and over: an additional week of notice for each year after the third, up to 8 weeks in total
Manitoba
Less than 30 days of service: No notice
Between 30 days and 1 year: 1 week
1–2 years: 2 weeks
3-5 years: 4 weeks
5-10 years: 6 weeks
10 years and over: 8 weeks
New Brunswick
Less than 6 months of service: no notice
Between 6 months and 5 years: 2 weeks
5 years and over: 4 weeks
Newfoundland and Labrador
Less than 3 months of service: no notice
Between 3 months and 2 years: 1 week
2-5 years: 2 weeks
5-10 years: 3 weeks
10-15 years: 4 weeks
15 years and over: 6 weeks
Northwest Territories
Less than 90 days of service: no notice
Between 90 days and 3 years: 2 weeks
3 years and over: additional week of notice for each year after the third, up to 8 weeks in total
Nova Scotia
Less than 3 months of service: no notice
Between 3 months and 2 years: 1 week
2-5 years: 2 weeks
5-10 years: 4 weeks
10 years and over: 8 weeks
Nunavut
Less than 90 days of service: no notice
Between 90 days and 3 years: 2 weeks
Three years: additional week of notice for each year after the third, up to 8 weeks in total
Ontario
Less than three months of service: no notice
Between 3 months and 1 year: 1 week
1-3 years: 2 weeks
3 years and over: additional week of notice for each year after the third, up to 8 weeks in total
Prince Edward Island
Less than 6 months of service: no notice
Between 6 months and 5 years: 2 weeks or 2 weeks’ pay in lieu of notice
5-10 years: 4 weeks
10-15 years: 6 weeks
15 years and over: 8 weeks
Quebec
Less than 3 months of service: no notice
3 months to 1 year: 1 week
1-5 years: 2 weeks
5-10 years: 4 weeks
10 years and over: 8 weeks
Saskatchewan
Less than 3 months of service: no notice
Between 13 weeks and 1 year: 1 week
1-5 years: 2 weeks
3-5 years: 4 weeks
5-10 years: 6 weeks
10 years and over: 8 weeks
Yukon
Less than six months of service: no notice
6 months to 1 year: 1 week
1-3 years: 2 weeks
3 years and over: additional week of notice for each year after the third, up to 8 weeks in total
Federal jurisdiction
Federally regulated employees are entitled to 2 weeks of notice after three weeks of employment.
Severance in Canada
In almost all provinces in Canada, employers are entitled to give workers at least 2 days’ worth of pay for each year that they worked for the employer as severance. If an employee has worked with a company for 6 years, for instance, they would receive at least 12 days worth of pay.
The minimum severance payment is 40 hours worth of wages.
Ontario
The only province that differs from the standards for severance is Ontario. Employees in Ontario are entitled to 1 weeks salary for each year of service for a maximum of 26 weeks if:
Their employer has a business with a gross income of at least $2.5 million CAD or
Dismiss more than 50 employees in a 6-month period
Why companies partner with Via
Via makes hiring talent around the world and building your global team seamless by helping you onboard workers in as little as 2-3 business days. With our easy-to-use platform and payment tools that always pay employees in the local currency, Via helps you manage local HR processes for direct employment such as work visas & permits, employee data privacy compliance, benefits, global payroll solutions, background checks, and other legal products. Our team of local labor lawyers and on-the-ground experts provide 24 hour local support and ensure that your company remains compliant while expanding abroad. As your employer-of-record/entity abroad, Via assumes responsibility for employment liability, so that you can focus on what matters: recruiting and managing your team.
