Ending an employment relationship is one of the most sensitive moments in business management. A poorly handled termination can damage morale, spark unnecessary disputes, or even escalate into costly litigation. Yet when done with clarity, structure, and respect, a termination can become a manageable transition for both sides – and in some cases, even preserve the professional relationship.
As an Toronto employment lawyer, I have seen how small shifts in an employer’s approach can dramatically affect outcomes. The most effective organizations treat termination not as a single event, but as a process that demands preparation, communication, and foresight.
Below are a few key practices that consistently make the difference.
1. Proper Employment Contracts and Termination Letters
With careful planning, transparent communication, and the right legal guidance, employers can navigate workforce reductions without jeopardizing their financial stability or reputation. A key part of that preparation is ensuring that every employee’s employment contracts is properly drafted and up to date, with clear and enforceable termination clauses that comply with Ontario law. Well-structured contracts reduce uncertainty, prevent costly wrongful dismissal claims, and allow both parties to understand their rights before a problem arises.
In addition, employers should work with an experienced Toronto employment lawyer to develop fair and legally appropriate severance packages . A tailored severance agreement not only limits exposure to litigation but also demonstrates respect and professionalism toward departing employees, helping preserve workplace morale and brand integrity. When organizations take these steps proactively, they transform a potentially high-risk event into a controlled, predictable process, particularly one that protects the company’s long-term interests while treating employees with fairness and dignity.
2. Different Types of Severance Packages
A strategy that some employers use when deciding to terminate employment is providing employees with working notice. Rather than paying employees a lump sum after termination, an employer is permitted to provide advance notice that their employment will end on a specific date in the future. During this period, they continue to work and receive their regular pay.
Working notice is perfectly legal in Ontario as long as it meets or exceeds the minimum notice requirements set out in the Ontario Employment Standards Act, 2000. Every week of continued employment during that period counts toward an employer’s obligation, meaning less money is owed when the relationship ends.
Many companies avoid this route because of concerns reduced workplace morale, but in reality, it often works well, particularly when handled transparently. If the employee understands that the decision is purely financial, not personal, working notice can be an efficient and respectful solution.
As an example, employee who could claim 20 months of pay at common law might accept 15 months’ compensation upfront in exchange for immediate certainty. From the employee’s perspective, taking a “haircut” with a reduced lump sum payment offers security and the potential to “come out ahead” if they secure another job sooner. From the employer’s side, it eliminates the risk of extended litigation and unpredictable court outcomes.
3. Helping Employees Mitigate Can Be an Effective Employer Strategy
An employee’s entitlement to common law severance depends (that is, all amounts beyond their statutory guarantees to termination pay and severance pay under the Ontario Employment Standards Act, 2000) largely on how long they remain unemployed after dismissal. The law requires them to take reasonable steps to find comparable work (this is called an employee’s “duty to mitigate”).
Employers can take advantage of this principle by actively helping former employees find new opportunities. If you can help them secure a new position, your financial responsibility effectively ends as of their new start date, aside from statutory minimum payments.
Employers familiar with their own industry are often well-positioned to identify openings or make introductions. Even if an employer cannot guarantee an employee a new job, sharing leads or conducting a documented job search can help demonstrate to a court that similar work was available and the employee may have failed to mitigate by not applying. If the employee fails to pursue those opportunities, it can substantially reduce the damages they might claim. In fact, when representing employees, I often find strategic employment lawyers representing employers send back a list of jobs the employee should apply for to mitigate their damages. This can be a wise and effective strategy if the jobs are actually comparable and suitable to the employee’s skillset.
In short: helping someone land a job not only demonstrates goodwill but can also save the company thousands of dollars in potential liability.
4. Get Legal Advice Before Making Any Termination Decisions
When financial pressure mounts, it can be tempting for employers to act quickly. However, even a single termination handled incorrectly can expose an employer to significant wrongful dismissal liability. Before taking any steps, it is essential to consult with an experienced employment contract lawyer or employment lawyer in Toronto who understands both employment law and the practical realities of running a business.
An Ontario employment lawyer can:
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Assess each employee’s potential entitlements under the Employment Standards Act and common law
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Develop a lawful, cost-efficient strategy for layoffs or restructuring
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Draft enforceable release agreements that protect the company
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Negotiate settlements that minimize financial risk and avoid litigation
A employment law consultation can prevent expensive mistakes and provide peace of mind during an otherwise stressful process.
Final Thoughts: Proactive Strategy
The key takeaway? Don’t assume that severance obligations are fixed or unavoidable. With strategic advice from an experienced Toronto employment lawyer, many employers can significantly reduce exposure and resolve matters quickly—often without stepping foot in court.
If your company is considering layoffs, restructuring, or staff reductions, seek advice early. A proactive legal strategy today can save your business tomorrow.
Call Toronto Employment Lawyer Now
It is important for an employee (or an employee) to obtain a legal consultation before taking any action that could affect the situation at workplace. Sezar has experience advocating for both employers and employees, which allows him to anticipate the other side’s arguments and develop an effective strategy, including termination of employment.
If you are looking for a wrongful dismissal lawyer in Toronto, call us today at 647-822-5492 for a case evaluation with an experienced employment lawyer.
Disclaimer: The content on this website and blog is not legal advice or legal opinion of any kind, and is only to provide general information. It is in no way particular to your individual case and should not be relied upon in any way. The outcome of a legal matter depends on its unique circumstances, and prior successes are not indicative of future results. No portion or use of this website or blog will establish a lawyer-client relationship with the author, this law firm or any related party. Should you require legal advice for your particular situation, please fill out the form below, or call 647-822-5492, to request an initial consultation.