Mass Terminations

TORONTO EMPLOYMENT LAWYERS ADVISING EMPLOYERS ON MASS TERMINATIONS

Corporate restructuring is sometimes necessary to stay competitive in the global business landscape. Unfortunately, significant restructuring often involves the termination of large numbers of employees, otherwise known as a mass termination. Employers faced with making this decision must be aware of their obligations in order to avoid violating their employees’ rights under both the applicable legislation and the common law.

The employment lawyers Toronto at Sultan Lawyers have spent years advising both employees and employers on their rights and obligations respecting employment law. When faced with a mass termination, our lawyers will work with an employer to develop and implement a plan that protects the rights of the mass termination affected employees while mitigating risk for the employer.

WHAT IS A MASS TERMINATION?

As defined by the Ontario Employment Standards Act, a mass termination is the termination of 50 or more employees at one establishment over a four-week period. Termination generally requires adequate notice to the employee in order to prevent a valid claim for wrongful dismissal. However, there are additional requirements that apply specifically to instances of mass termination.

EMPLOYER OBLIGATIONS IN A MASS TERMINATION

Notice Period

The statutory notice period for a mass termination is dependent on the number of employees affected:

50-199 employees are entitled to 8 weeks’ notice or pay
200-499 employees are entitled to 12 weeks’ notice or pay
500 or more employees are entitled to 16 weeks’ notice or pay

Form 1 Requirement

In addition to providing adequate notice to the employees, employers are also required to submit notice to the Director of Employment Standards via a form known as Form 1. This form must be submitted to the Director at the start of the statutory notice period, and it must also be posted in the workplace where it is visible to the employees. If an employer fails to submit the form on time, it will have the effect of restarting the notice period owing to employees.

Recently, the Ontario Court of Appeal clarified the rules surrounding the Form 1 requirements, in a case called Wood v. CTS of Canada Co. (“Wood”). The Court of Appeal specified that the Form 1 notice was required to be submitted at the time of the statutory notice period only. Therefore, an employer is free to provide additional notice to employees but is not required to submit Form 1 until the start of the 8, 12 or 16-week period specified under the Employment Standards Act. Failure to do so will have the effect of restarting the statutory notice period for employees, but not any additional notice provided beyond that period.

Overtime Requirements and Temporary Employment Beyond the Termination Date

The purpose of the notice period in any termination is to allow employees an opportunity to find alternative employment prior to becoming unemployed. In a mass termination, this is no different. In Wood, the Court clarified that employers would not be credited as having provided notice for any week in which employees were required to work additional hours as overtime, as this deprived them of time to look for new employment. Therefore, employers in a similar situation must be cautious to allow employees their free time during the notice period as well.

Further, the Court clarified that employers are permitted to offer terminated employees temporary work after the date of termination for up to 13 weeks. Beyond that period, employers are required to issue a fresh notice of termination and begin the process over again.

SULTAN LAWYERS: PROVIDING GUIDANCE AND ADVICE TO EMPLOYERS ON MASS TERMINATIONS

At Sultan Lawyers in Toronto, our forward-thinking and strategic employment lawyers regularly advise employers across the province on best practices and compliance with the law in carrying out a mass termination. We are relied upon by a wide range of Canadian and global companies to provide strategic advice, and, where necessary, a vigorous defence of our clients’ interest to ensure that they are protected. We help employers ensure that departing employees receive everything they are legally entitled to while managing an employer’s risk and limiting their liability. Contact us online or at 416-214-5111 for a consultation.

Frequently Asked Questions

What counts as a mass termination under the Employment Standards Act?

A mass termination occurs when an employer terminates the employment of 50 or more employees at an establishment within a four-week period. Under the Employment Standards Act, 2000 (ESA), additional obligations apply when an employer carries out a large-scale termination.

The mass termination rules may require the employer to provide a longer notice period than would apply to an individual termination. The required notice is based on the number of employees being terminated, rather than each employee’s individual length of service.

The employer should also determine whether an exception to the mass termination rules applies. For example, the rules generally do not apply where the employees being terminated represent no more than 10% of the employees who have been employed at the establishment for at least three months, provided the terminations are not caused by the permanent discontinuance of all or part of the employer’s business at the establishment.

Planning ahead can help employers reduce potential wrongful dismissal exposure during a restructuring.

What notice requirements apply during a mass termination?

Under the ESA, the required mass termination notice depends on the number of employees whose employment is being terminated:

50 to 199 employees: 8 weeks’ notice
200 to 499 employees: 12 weeks’ notice
500 or more employees: 16 weeks’ notice

A workforce reduction involving multiple employees can trigger different notice obligations than an individual termination without cause. The requirements are designed to provide affected employees with additional time and information when a workplace reduction affects a larger group.

The employer’s obligations depend on the circumstances of the termination, including the structure of the workforce reduction and the employees affected. Employers should review their plans before announcing changes to ensure they meet their obligations under the ESA.

Reviewing employment agreements and considering severance package design before announcing a restructuring can help employers identify potential issues early.

What is Form 1 for a mass termination?

Form 1, Notice of termination of employment, is a notice that an employer must complete and deliver to the Director of Employment Standards when the ESA’s mass termination provisions apply. Notice to affected employees is not considered to have been given until the Director receives Form 1.

On the first day of the notice period, the employer must also post a copy of Form 1 in the workplace where it will come to the attention of affected employees and provide a copy to each affected employee.

In addition, since July 1, 2025, employers initiating a mass termination must provide affected employees with the most recent Employment Ontario Career Supports information sheet on the first day of the notice period.

Failing to follow the required process can create additional legal concerns, which is why employers should review their obligations before moving forward with a workforce reduction.

How does mass termination notice differ from individual termination notice?

An individual termination without cause focuses on the rights and obligations connected to one employee’s employment relationship. A mass termination involves additional requirements because the employer is ending multiple employment relationships as part of a broader business decision.

Employers must consider both the obligations owed to each employee and the separate requirements that apply to the group termination process. The approach taken during a restructuring can affect the employer’s legal exposure.

Employers should also be aware that, since November 27, 2025, eligible employees who receive a mass termination notice may be entitled to up to three unpaid, job-protected days of job-seeking leave during the notice period, subject to the ESA’s requirements.

A careful process helps employers meet employment standards obligations while reducing avoidable risks during a workforce reduction.

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