A common question many employees ask is the difference between entitlements under the Employment Standards Act, 2000, S.O. 2000, c. 41 (the “ESA”), and common law reasonable notice. Understanding the difference between the common law and under the ESA is crucial in determining your entitlements upon termination.
What is common law?
The common law is a body of unwritten laws developed over time through court decisions. If an employee is not limited to the amounts listed in the ESA, that employee would be entitled to reasonable notice under the common law.
An employee’s entitlements under the common law are dependent on a list of factors: (1) the age of the employee (2) the length of service (3) character of employment, and (4) the availability of similar employment.
Based on these factors, an employee could, on average, receive one month of notice for every year of employment. An employee could get approximately 24 months of reasonable notice, or more in extraordinary circumstances.
Employment Standards Act
The ESA is the governing provincial employment standards for applicable employees in Ontario. Employers in provincially-regulated workplaces must abide by the ESA and its regulations. Under the ESA, employers must provide statutory notice or termination pay, which is equivalent to 1 week per year of service up to 8 weeks. Employers must also provide severance payments if an employee works for more than 5 consecutive years and the employer has a total global annual payroll of more than $2.5 million. Severance pay is calculated as 1 week of pay per year of service up to 26 weeks. In addition to termination and severance pay, employers must provide any unpaid or accrued wages, vacation pay, and continue benefits for the notice period.
What would limit your access to common law?
If an employee signs a valid employment contract that limits their notice to abide by the ESA, employees are only entitled to the amounts provided under the ESA, and not under common law.
What is a common law employer?
While there is no real definition to what is a common law employer, what this question is really asking is are there employers who follow the common law. The answer is yes, but fewer in recent years. Your employment contract will inform you if your employer follows common law reasonable notice or restricts your notice to the ESA. Given that an employee can receive up to 24 months of common law reasonable notice compared to a maximum of 8 weeks under the ESA, it is crucial for employees to review their employment contracts to determine whether they are entitled to common law reasonable notice.
How can Whitten and Lublin help?
Given the differences between common law reasonable notice and notice under the ESA, it is crucial for employees to review their employment contracts with a lawyer to determine whether they are entitled to common law reasonable notice. If you are an employee and need your contract reviewed, your severance package reviewed or been wrongfully dismissed, consult with the experienced lawyers at Whitten & Lublin as you may be entitled to additional compensation. Contact us online or by phone at (416) 640-2667 today.
Author – Abby Leung
