Redundancy in Canada means an employer no longer needs a particular job or position. This can happen because of restructuring, downsizing, automation, a business closure or a change in how a company operates. When an employee is made redundant, their job is being eliminated for business reasons rather than because of misconduct.
Being made redundant doesn’t mean you lose your right to severance pay. In Canada, eliminating a position is usually treated as a termination without cause. The employer must still provide the notice or compensation required by law.
For many non-unionized employees, the full severance package can be significantly higher than the minimum required by employment standards legislation. Depending on the circumstances, severance can reach up to 24 months’ pay.
The employment lawyers at Samfiru Tumarkin LLP help non-unionized employees in Ontario, Alberta and British Columbia understand their rights when their positions are eliminated.
Reviewed by: Lior Samfiru, Employment Lawyer and National Co-Managing Partner
On This Page:
- 1. What Is Redundancy?
- 2. How Redundancy Works
- 3. Is Redundancy Legal?
- 4. Redundancy vs. Layoff
- 5. Redundancy Pay
- 6. Provincial & Federal Rights
- 7. What Employees Should Do
- 8. Common Questions
What Is Redundancy in Employment Law?
Redundancy happens when an employer decides a job or position is no longer required. It is a business decision affecting the role, rather than a dismissal based on the employee’s conduct or performance.
The term is commonly used in the United Kingdom and other countries. In Canada, employers also use the word “redundancy,” but employment legislation more commonly refers to termination, layoff or dismissal.
For example, an employer might say:
- “Your position has been made redundant.”
- “We’re eliminating your role.”
- “Your department is being restructured.”
- “We no longer need this position.”
- “Your job is being removed as part of a workforce reduction.”
These statements may describe the same outcome: the employer has decided to end the employee’s job.
In Canada, calling a termination a “redundancy” doesn’t change the employee’s legal entitlement. The employer must still comply with applicable employment laws.
What Does It Mean When Your Position Is Made Redundant?
It means your employer has decided that your position is no longer needed in its current business structure.
Common reasons include:
- Restructuring: Departments, teams or responsibilities are reorganized.
- Downsizing: The employer reduces staffing to control expenses.
- Automation: Technology or artificial intelligence replaces certain tasks.
- Mergers and acquisitions: Two businesses combine and eliminate overlapping positions.
- Outsourcing: Work is transferred to another company or service provider.
- Business closures: A department, location or operation shuts down.
Being made redundant doesn’t necessarily mean you did anything wrong. It also doesn’t mean you must accept whatever compensation the employer offers.
If your employer is specifically reorganizing its workforce, read our guide to job elimination due to restructuring.
How Does the Redundancy Process Work in Canada?
There is no single redundancy process that every Canadian employer must follow. The legal requirements depend on the employee’s jurisdiction, contract and circumstances of termination.
When a company permanently eliminates a position, the process commonly involves:
- Identifying positions to eliminate: The employer decides which jobs are no longer required.
- Notifying affected employees: Employees are informed that their employment will end, either immediately or on a future date.
- Providing termination documents: The employer may issue a termination letter, severance offer and release.
- Providing required notice or compensation: The employer must satisfy applicable statutory, contractual and other legal obligations.
- Ending the employment relationship: Final pay, benefits, vacation and other outstanding entitlements must be addressed.
Does an Employer Have to Give You Notice of Redundancy?
Eligible employees must receive the termination notice or compensation required under the laws that apply to their jobs.
An employer may provide:
- Working notice: You continue working until a specified termination date.
- Pay in lieu of notice: Your employment ends sooner, and the employer pays compensation instead of having you work through the notice period.
- A combination: You work part of the notice period and receive compensation for the remainder.
The required notice period may be much longer than the minimum set by employment standards legislation.
See our national guide to working notice in Canada.
What if Several Employees Are Made Redundant at Once?
When an employer eliminates numerous positions, additional group or mass termination rules may apply.
Those rules differ by jurisdiction and can include additional notice or reporting requirements. The fact that many employees lose their jobs at once does not remove their individual employment rights.
For more information about workforce reductions, visit our Layoffs in Canada guide.
Is Redundancy Legal in Canada?
Yes. An employer can eliminate positions for legitimate business reasons. Canadian employment law does not ordinarily require a non-unionized employer to keep a position simply because an employee has held it for many years.
A business can restructure, reduce costs or stop offering a particular service. However, it must still respect the employee’s employment and human rights.
A redundancy may raise legal concerns if:
- The employer fails to provide sufficient notice or compensation.
- The employer claims the position was eliminated to conceal discrimination.
- The employee was selected for termination because they exercised a protected workplace right.
- The employer breaches an enforceable employment contract or other legal obligation.
What if Your Employer Says Your Job Is Redundant but Hires Someone Else?
If your employer claims your role has disappeared but soon hires someone to perform substantially the same work, you may have questions about the real reason for your dismissal.
That doesn’t automatically make the termination illegal. Employers may reorganize duties or create new positions. However, the circumstances can matter, particularly where discrimination, retaliation or bad faith is suspected.
For many non-unionized employees, the central issue remains whether they received the full severance compensation required by law.
Redundancy vs. Layoff vs. Termination: What’s the Difference?
These terms are often used interchangeably, but they don’t always mean the same thing.
| Term | Meaning in Canada |
|---|---|
| Redundancy | An employer no longer needs a position or role. If employment ends, termination rights may apply. |
| Temporary layoff | Work is suspended with the possibility of recall. Statutory and contractual limits apply. |
| Permanent layoff | Employment ends permanently, commonly because of a shortage of work or position elimination. |
| Termination without cause | The employer ends employment without relying on serious misconduct to avoid notice obligations. |
| Wrongful dismissal | A dismissal where the employer fails to provide legally sufficient notice or compensation, or otherwise breaches applicable legal rights. |
For example, a company that permanently removes 20 positions during restructuring may describe those employees as “redundant” or “laid off.” If their employment is ending, their termination rights must still be assessed.
A temporary layoff is different because the employer may intend to recall the employee. However, an unauthorized temporary layoff can itself create a constructive dismissal claim.
Read our detailed comparison of layoff versus termination in Canada.
Are You Entitled to Redundancy Pay in Canada?
If your employer makes your position redundant and ends your employment, you may be entitled to severance pay.
Canada does not have one universal redundancy-payment formula. Instead, your entitlement depends on the employment standards legislation that applies to you, your employment contract and, where applicable, common law.
An employer may offer only a few weeks of termination pay. But for many non-unionized employees, that is not their full legal entitlement.
How Much Severance Can You Get if Your Job Is Made Redundant?
A full severance package can depend on several factors:
- Age: Your age when your employment ends.
- Length of service: How long you worked for your employer.
- Position: The nature of your job and responsibilities.
- Availability of similar work: How difficult it may be to find comparable employment.
- Compensation: Your salary, commissions, bonuses, benefits and other earnings.
- Employment contract: Whether an enforceable termination clause affects your rights.
In some cases, severance can reach up to 24 months’ pay. The amount is not calculated automatically by multiplying your years of service by a fixed number of weeks.
Use our free Severance Pay Calculator to estimate what you could be owed.
Is Redundancy Pay Different From Severance Pay?
In everyday language, “redundancy pay” describes compensation received when a job is eliminated. In Canada, employees and employers more often refer to this compensation as termination pay, pay in lieu of notice or severance pay.
The terminology matters because different laws establish different payments.
For example, Ontario has a separate statutory severance-pay entitlement for qualifying employees. Federally regulated employees may also qualify for a separate statutory severance payment under the Canada Labour Code.
For a complete explanation, see Severance Pay in Canada.
Redundancy Rights in Ontario, Alberta, BC and Federally Regulated Workplaces
Although redundancy has a similar everyday meaning across Canada, the rules governing notice and severance depend on the jurisdiction.
Redundancy in Ontario
In Ontario, an employer that permanently eliminates a non-unionized employee’s position will ordinarily be terminating employment without cause.
Under Ontario’s Employment Standards Act (ESA), qualifying employees must receive written termination notice or termination pay. Under the individual termination rules, this can reach eight weeks.
Some employees are also entitled to separate statutory severance pay. This generally requires at least five years of employment and an employer with a global payroll of at least $2.5 million, or a qualifying permanent closure affecting 50 or more employees within six months.
These are minimum statutory rights. Many non-unionized employees can be owed additional common-law severance.
Learn more about severance pay in Ontario.
Redundancy in Alberta
In Alberta, an employee whose position is permanently eliminated may be entitled to termination notice or termination pay under the Employment Standards Code.
For qualifying employees, the minimum notice period depends on length of service and can reach eight weeks.
Alberta does not provide a separate statutory redundancy payment equivalent to Ontario’s ESA severance-pay provision. However, non-unionized employees may still be entitled to much greater compensation under common law.
See our guide to severance pay in Alberta.
Redundancy in British Columbia
In British Columbia, eliminating an employee’s position can trigger notice or compensation obligations under the Employment Standards Act.
BC’s legislation uses the term “compensation for length of service.” For qualifying employees, the minimum entitlement can reach eight weeks of notice, compensation or a combination.
That statutory amount does not necessarily represent the full severance owed to a non-unionized employee under common law.
Read our guide to severance pay in British Columbia.
Redundancy in Federally Regulated Employment
Employees working in federally regulated industries, such as banking, airlines, telecommunications and interprovincial transportation, follow different employment standards rules under the Canada Labour Code.
Eligible employees may be entitled to termination notice or pay instead of notice. Employees with at least 12 consecutive months of service can also qualify for a separate statutory severance payment, subject to the applicable rules and exceptions.
A genuine lack-of-work termination or discontinuance of a work function may also affect eligibility for the federal unjust dismissal complaint process. Other legal rights and compensation entitlements may still apply.
See our dedicated guide to Federal Severance Pay.
What Should You Do if Your Job Is Made Redundant?
If you’ve been told your position is being eliminated, there are several steps you can take to protect your rights.
1. Get the Termination Details in Writing
Ask your employer to confirm your termination date, the reason given for eliminating your position and what compensation is being offered.
Keep the termination letter, severance package and relevant communications you are entitled to retain.
2. Don’t Assume Redundancy Means Minimum Severance
Your employer may describe the termination as a restructuring or cost-cutting measure and offer only the minimum required by employment standards legislation.
That does not automatically mean the offer reflects your full entitlement.
3. Review the Entire Severance Package
Check whether the offer addresses your regular salary, benefits, commissions, bonuses, vacation pay and other compensation.
Look carefully at any release that requires you to give up the right to pursue further compensation.
4. Don’t Rush to Meet an Employer’s Signing Deadline
Employers may give employees only a few days to accept a redundancy or severance package.
An employer’s acceptance deadline is not the same as a legal deadline for pursuing severance. The specific offer may expire or be withdrawn, but a short signing deadline doesn’t automatically erase your legal rights.
Legal claim deadlines can vary, including shorter complaint periods in certain federal employment matters. Get advice promptly rather than ignoring the employer’s deadline.
5. Apply for Employment Insurance
If you’ve lost your job because your position was eliminated, you may qualify for Employment Insurance (EI), subject to the federal eligibility rules.
Apply as soon as you stop working, even if you’re still reviewing or negotiating a severance package.
Read more about EI and severance pay in Canada.
6. Speak With an Employment Lawyer Before Signing
An employment lawyer can review your contract and termination offer, explain how the applicable law affects your rights and determine whether additional compensation may be owed.
Visit our Severance Package Review page to learn how we can help.
Redundancy in Canada: Frequently Asked Questions
What does redundancy mean in Canada?
Redundancy means an employer no longer needs a particular job or position. It can result from restructuring, cost-cutting, automation or other business changes. If an employee’s job is permanently eliminated, termination and severance rights may apply.
Is being made redundant the same as being fired?
If redundancy results in a permanent end to employment, it is ordinarily treated as a termination without cause. The employer must still provide the notice or compensation legally owed. Being made redundant is not the same as being fired for serious misconduct.
Does redundancy mean you get severance pay?
Many non-unionized employees whose positions are permanently eliminated are entitled to severance compensation. The amount depends on their contract, applicable employment standards and possible common-law rights. Some employees can receive up to 24 months’ pay.
How is redundancy pay calculated in Canada?
There is no single Canada-wide formula. Statutory minimums vary by jurisdiction. Full common-law severance may depend on age, length of service, position and the availability of comparable work. An enforceable employment contract can also affect the amount owed.
Can an employer make your position redundant without warning?
An employer may be able to end employment immediately rather than provide advance working notice, but it must still satisfy applicable termination-pay and other legal obligations. A lack of advance warning does not automatically eliminate severance rights.
Can you challenge a redundancy?
Yes, depending on the circumstances. Employees may challenge insufficient termination compensation or raise separate claims involving discrimination, prohibited retaliation or other legal violations. A redundancy is not automatically unlawful because the employee disagrees with the business decision.
What if your position is redundant but the company is still hiring?
A company can eliminate some positions while hiring for different roles. However, if the employer claims your position has disappeared while continuing to hire for substantially the same work, the circumstances may warrant closer review.
Is redundancy different from constructive dismissal?
Yes. Redundancy describes a position being eliminated. Constructive dismissal can arise when an employer makes a fundamental, unauthorized change to employment or otherwise seriously breaches the employment relationship. Both situations can potentially lead to severance rights.
Do you have to accept a redundancy package?
No. You don’t have to sign an offered severance package simply because your employer calls it a redundancy. However, the employer may withdraw or change an offer, and legal deadlines can apply. Have the package reviewed promptly before deciding.
What if you’re unionized and made redundant?
Unionized employees must look to their collective agreement and the applicable labour-relations process for their rights. Seniority, recall provisions and grievance procedures may apply. Samfiru Tumarkin LLP’s employment law team represents non-unionized employees only.
Made Redundant? Know What You’re Owed.
Your employer may have eliminated your position, but that doesn’t mean it has eliminated your right to severance pay.
The employment lawyers at Samfiru Tumarkin LLP help non-unionized employees in Ontario, Alberta and British Columbia review redundancy and termination packages, understand their rights and pursue the compensation they’re legally owed.
Before you sign, always check first.
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