An employee who has completed at least 12 consecutive months of continuous employment and is then terminated is entitled to severance pay, equal to whichever is greater: 2 days’ regular wages for each completed year of employment, or 5 days’ regular wages.

This is a separate obligation from termination notice or pay in lieu of notice, not an alternative way of satisfying it — an eligible terminated employee is owed both. See Individual Termination: Notice and Pay in Lieu for the notice side.

The federal severance floor is structurally different from Ontario’s, not just differently calculated. Under the ESA, severance only applies to employers with a payroll of $2.5 million or more, and only to employees with 5 or more years of service. The federal threshold is far lower on both counts: 12 months of service is enough, and it applies at any employer size — there’s no payroll test at all.

This is general information, not legal advice; confirm current requirements at the source before relying on them.

Related notes

Individual Termination: Notice and Pay in Lieu (CLC Part III, s.230) — Since February 1, 2024, federally regulated employers terminating an employee without just cause owe graduated notice or pay in lieu of 2 to 8 weeks, on top of — not instead of — severance pay.

Group / Mass Termination (CLC Part III, Division IX, s.212) — Terminating 50 or more employees at one location within a 4-week window triggers a 16-week Ministerial notice and a joint planning committee, on top of — not instead of — each affected employee's individual notice and severance.

Federal vs. Ontario Jurisdiction: The Employment-Law "Instead Of" Rule — A federally regulated employer follows the Canada Labour Code and related federal statutes in place of Ontario employment law, not on top of it — the federal regime replaces the ESA, OHSA, Human Rights Code, AODA and Pay Equity Act rather than adding to them.