Employment Standards Act 2000 — Minimum Standards
The Employment Standards Act 2000 SO 2000 c 41 (ESA) sets minimum standards for most employees in Ontario employed by provincially regulated employers. Federally regulated employees (banking, telecommunications, interprovincial transportation, broadcasting) are covered by the Canada Labour Code Part III instead.
Minimum Wage
The general minimum wage in Ontario is set by regulation and adjusted annually. Special minimum wage rates apply to: students under 18 working fewer than 28 hours per week during the school year; homeworkers (10% premium over general minimum); hunting/fishing/wilderness guides (daily or half-daily rates).
Hours of Work and Overtime
Under ESA s.17, an employee must not be required to work more than 8 hours per day or 48 hours per week (unless an averaging agreement or excess hours agreement is in place). Employees must receive at least 11 consecutive hours off duty each day and 24 consecutive hours off duty each week (or 48 consecutive hours off in two weeks).
Overtime pay: Employees are entitled to 1.5x their regular rate for hours worked in excess of 44 hours per week (ESA s.22). Professional exemptions apply (licensed lawyers, doctors, engineers, architects — ESA s.3(1) Schedule 1). Managers and supervisors whose work is primarily managerial are exempt from overtime provisions.
Vacation Time and Pay
ESA s.33: employees are entitled to a minimum of two weeks' vacation per year after one year of employment, increasing to three weeks' vacation per year after five years with the same employer (as of July 1, 2018 — Fair Workplaces, Better Jobs Act 2017). Vacation pay is 4% (two weeks) or 6% (three weeks) of gross wages earned in the vacation entitlement year.
Public Holidays
Ontario has nine public holidays under ESA s.26-30: New Year's Day, Family Day, Good Friday, Victoria Day, Canada Day, Labour Day, Thanksgiving, Christmas Day, Boxing Day. Most employees are entitled to a public holiday off with public holiday pay (average of wages and vacation pay earned in the four weeks before the holiday divided by 20 working days).
Leaves of Absence
The ESA provides multiple leaves:
- Pregnancy leave — 17 weeks (s.46)
- Parental leave — up to 63 weeks for a primary caregiver, 37 weeks otherwise (s.48)
- Personal emergency leave — 10 days per year (3 paid if 25+ employees) since the ESA 2018 amendment
- Family caregiver leave — 8 weeks per year per seriously ill family member (s.49.1)
- Critically ill child care leave — up to 37 weeks (s.49.4)
- Domestic or sexual violence leave — up to 10 days and 15 weeks (s.49.7)
- Reservist leave — up to 8 weeks for pre-deployment and 52 weeks for deployment (s.50.2)
Termination of Employment
ESA Termination Pay — Statutory Minimums
An employer who terminates an employee without cause must provide notice or pay in lieu of notice under ESA Part XV:
- 1 week per year of service, minimum 1 week and maximum 8 weeks
- Notice or payment in lieu is required regardless of the reason for termination (except wilful misconduct, disobedience, or wilful neglect of duty — ESA s.54)
- Termination without proper notice or pay is a deemed constructive dismissal under the ESA
ESA Severance Pay
Severance pay (separate from termination pay) is owed when: (a) the employee has been employed for 5+ years; and (b) the employer has an Ontario payroll of $2.5M+ or the employee is part of a mass termination of 50+ employees within a 6-month period (ESA s.64). Severance pay = one week per year of service (pro-rated for partial years), maximum 26 weeks.
Mass Termination
Where 50 or more employees are terminated within a 4-week period, the employer must provide notice under ESA s.58 — 8, 12, or 16 weeks depending on the number of employees terminated. Mass termination notice triggers the obligation to pay entitlements of all terminated employees.
Common Law Reasonable Notice
In addition to ESA minimums, an employer who terminates a non-union employee without cause must provide common law reasonable notice. The common law notice obligation is typically much longer than the ESA minimum. The leading case isBardal v Globe and Mail Ltd (1960) 24 DLR (2d) 140 (ONHC):
"There can be no catalogue laid down as to what is reasonable notice in particular classes of cases. The reasonableness of the notice must be decided with reference to each particular case, having regard to the character of the employment, the length of service of the servant, the age of the servant and the availability of similar employment having regard to the experience, training and qualifications of the servant."
The Bardal factors are: (a) character of employment (seniority and responsibility); (b) length of service; (c) age of the employee; and (d) availability of similar employment. Modern courts have extended the list to include: inducement to leave prior employment, economic climate, and the employee's personal circumstances.
As a practical matter, Canadian courts award approximately 1 month per year of service for long-service employees, with adjustments for the Bardal factors. Courts have awarded up to 24-26 months for senior employees with long tenures in competitive markets.
Damages for Wrongful Dismissal — the Honda Principle
Damages for wrongful dismissal are ordinarily limited to the wages and benefits the employee would have earned during the reasonable notice period. The Supreme Court addressed additional damages in Honda Canada Inc v Keays 2008 SCC 39:
- Aggregated damages (formerly "Wallace damages"): The notice period may be extended where the employer engaged in bad faith conduct in the manner of dismissal. Wallace v United Grain Growers [1997] 3 SCR 701 held that a longer notice period was warranted where the employer's conduct during dismissal caused mental distress. Honda moved this from a notice extension to a separate head of damages for actual mental distress (proven, not presumed).
- Moral damages: Available where the employer breached an independent obligation to the employee causing mental distress — the contract must be breached in a manner that is unfair or in bad faith (Honda para 57).
- Punitive damages: Rare; require conduct that is malicious, oppressive, and high-handed — a separate actionable wrong.
Just Cause for Dismissal
An employer may dismiss an employee without notice or pay for just cause. The threshold for just cause is high — isolated incidents of poor performance are insufficient. The test from McKinley v BC Tel 2001 SCC 38 is contextual and proportionate: the court must determine whether the dishonest or misconduct was of a nature that was incompatible with the fundamental terms of the employment contract.
Dowling v Ontario (Workplace Safety and Insurance Board) 2004 ONCA 43 confirmed that just cause is not established by mere proof of misconduct — the misconduct must be serious enough to vitiate the employment relationship. The court examines: the nature of the misconduct, its effect on the employer, the employee's history, and whether dismissal is proportionate.
The ESA does not recognize "just cause" as an exemption from statutory minimums (only "wilful misconduct, disobedience, or wilful neglect" — a higher bar). An employee dismissed for just cause at common law may still be entitled to ESA termination pay if the conduct was not wilful.
Constructive Dismissal
Constructive dismissal occurs when an employer makes a unilateral fundamental change to the terms and conditions of employment that a reasonable person would consider inconsistent with the continuation of the employment contract:Farber v Royal Trust Co [1997] 1 SCR 846. The employee may treat the contract as repudiated, resign, and sue for damages as though dismissed.
Common constructive dismissal scenarios: significant demotion or reduction in duties; substantial pay cut; geographic relocation; harassment or poisoned work environment; unilateral reduction in benefits. The employee must resign within a reasonable time of the fundamental change (or risk being seen to have accepted the variation).
Potter v New Brunswick Legal Aid Services Commission 2015 SCC 10 confirmed that constructive dismissal can arise from: (1) a single unilateral act that breaches an essential term of the contract; or (2) a series of acts that together show the employer no longer intends to be bound by the contract.
Wrongful Dismissal Claims — Procedure
Wrongful dismissal claims may be brought:
- Ontario Superior Court: For common law damages (notice period compensation, Honda moral damages). No monetary limit on Superior Court claims. Limitation period: 2 years from dismissal under the Limitations Act 2002.
- Small Claims Court: For claims up to $35,000 — faster and less expensive than Superior Court.
- Employment Standards Officer: ESA complaints for statutory minimums only (termination pay, severance pay, wages). Ministry of Labour investigation, no concurrent Superior Court action while Ministry complaint is outstanding.
- Human Rights Tribunal: For dismissals based on protected grounds under the Code — separate jurisdiction from common law wrongful dismissal.