When it comes to employment in Canada, it’s important to know that the concept of “at-will” employment does not exist here. While many workers in the United States are employed under this arrangement, Canadian employees enjoy far more protections from sudden or unjust termination. If you’re working in Canada, understanding your rights—especially around termination and severance pay—is essential.
What is at-will employment?
In the U.S., at-will employment allows either the employer or the employee to end the working relationship at any time, without needing a reason or providing any advance notice. This means you can be let go suddenly, with no explanation or compensation, as long as the termination isn’t due to something illegal, like discrimination.
In Canada, however, this type of employment relationship isn’t allowed. Canadian workers are protected by laws that require employers to follow certain procedures before terminating an employee. These laws ensure that employers can’t simply fire employees without providing severance pay.
READ MORE: Fired because of your age? 3 things employees must do
Get breaking National news
Is at-will employment legal in Canada?
No, at-will employment is not recognized in Canada. If an employer wants to terminate your employment and there is no just cause, they are legally required to provide you with severance pay. This protects employees from being fired on the spot without any compensation.
Most employment in Canada is considered indefinite, which means that if you are let go, your employer must give you advance notice or, more commonly, pay you severance. The amount of severance you’re entitled to depends on several factors.
It’s also important to note that just because your contract doesn’t reference at-will employment, it doesn’t mean the termination or other clauses it contains are properly written or enforceable under Canadian law. Many contracts include poorly drafted terms that try to limit your entitlements, which is why it’s essential to have them reviewed by an employment lawyer at my firm.
READ MORE: Given a new employment contract? Review these key clauses, employment lawyer says
U.S. companies hiring in Canada
Although at-will employment is illegal in Canada, U.S.-based companies hiring employees to work in Canada may sometimes include at-will clauses in their contracts. This can happen by mistake, as at-will employment is standard practice in the U.S. However, it’s important to know that such clauses are unenforceable in Canada. Even if your employer is based in the U.S., they can’t contract out of Canadian employment laws.
Canadian laws apply regardless of where your employer is headquartered. If you’re working for a foreign company in Canada, the local employment laws still protect you. If your contract contains an at-will clause in your contract, rest assured it is unenforceable, and your right to full severance remains intact.
READ MORE: Lior Samfiru reviews 5 employee rights amid interest rate and employment changes
What happens if you’re fired without cause?
If you are terminated in Canada without cause, your employer is required to provide you with a full severance package. The amount you’re entitled to depends on your length of service, the type of work you do, and how long it might take you to find comparable work. It can be as much as 24 months’ pay, especially for senior or specialized roles where it’s harder to find similar employment.
Severance pay is designed to bridge the financial gap while you seek new employment and often includes more than just your salary. It should also cover benefits like bonuses, commissions, and other forms of compensation. To get a quick understanding of what your severance package should look like, use the Severance Pay Calculator.
READ MORE: Should you still get your bonus when you’re fired?
However, after successfully navigating severance package negotiations for tens of thousands of employees since 2007, my firm has found that most employers offer less severance than you’re entitled to. This is considered a wrongful dismissal, which is why it’s essential to review any severance offer carefully. Before accepting, consult an employment lawyer at Samfiru Tumarkin LLP to ensure you’re receiving the full amount owed to you.
Fired by a U.S.-based or foreign employer? Not sure what your severance rights are?
Contact the firm or call 1-855-821-5900 for a consultation with an employment or disability lawyer. We will get you the advice you need and the compensation you deserve.
Lior Samfiru is an employment lawyer and co-founding partner at Samfiru Tumarkin LLP, Canada’s most positively reviewed law firm specializing in employment law and long-term disability claims. He provides legal insight on Canada’s only Employment Law Show on TV and radio.