Federally regulated employees: severance and termination pay (2026) under the Canada Labour Code

If you work for a bank, an airline, a railway or another federally regulated employer, Part III of the Canada Labour Code replaces your province's employment standards Act, and the severance pay hub shows how different the two floors are. Federal notice starts at 2 weeks, not the one week most provinces begin with, once you have 3 months of continuous employment, and it climbs to 8 weeks. On top of that comes a separate statutory severance pay, owed after 12 months: the greater of 2 days per completed year and 5 days, with no ceiling of any kind. Add the vacation pay you earned but were never paid, at 4% to 8% of your wages, and the money is due within 30 days.

Updated September 6, 2026 · Figures verified against the statutes of each jurisdiction · see all figures and their sources

Who is federally regulated, and what that changes

Part III covers work in or connected with a federal work, undertaking or business, and Crown corporations that are not government departments (CLC s. 167). The Code's own definition names shipping and navigation, interprovincial and international railways, canals, telegraphs and other connecting works, interprovincial ferries, aerodromes, aircraft and air transportation, radio broadcasting, and banks (CLC s. 2). That definition is not a closed list: it opens with work within the legislative authority of Parliament, so other operations fall on the federal side through those general words rather than through a named paragraph.

What matters for this page is the consequence. If your employer is on the federal side of that line, your provincial employment standards Act does not apply to you at all. Not partly, not as a floor underneath the Code. A bank teller in Toronto is not covered by the Ontario ESA, and an airline employee in Vancouver is not covered by the BC Act. If your employer is not federally regulated, the page you want is Ontario, British Columbia, Quebec or your own province or territory from the hub.

Two limits are worth knowing. Managers sit outside the hours-of-work Part and the unjust-dismissal Part, but they still get notice, severance pay, vacation and general holidays. And a work of a local or private nature in Yukon, the Northwest Territories or Nunavut is outside Part III even though the territory is federal ground; territorial employment standards apply there.

Notice of termination: it starts at two weeks

This is the first place people get tripped up. Federal notice does not start at one week and climb from year one. 3 months of continuous employment buys the full 2 weeks, and there is nothing at all between three months and three years (CLC s. 230). The graduated ladder has been in force since February 1, 2024. Anything written before then describes a flat two-week rule.

Source: Canada Labour Code, s. 230 — Employer's duty to give notice or wages in lieu. Reviewed on September 6, 2026. Notice is owed once you have 3 months of continuous service.

Your employer can give written notice, pay wages in lieu at your regular rate for your regular hours, or mix the two so the weeks add up. The duty stands whether or not you also file an unjust dismissal complaint.

How your regular hours are counted matters when your schedule moves around. Where your hours aren't averaged, the regulations fix your regular weekly hours as the hours you actually worked, overtime excluded, in the four complete weeks before termination, divided by four; where they are averaged, the figure is a forty-hour week (CLSR s. 31). A complete week there is one with no general holiday, no vacation and no other absence.

During the notice period

Once written notice is given, your employer can't cut your wage rate or change any other term or condition of employment without your written consent, and must keep paying your regular rate for your regular hours until the date in the notice (CLC s. 231). Stay on more than two weeks past that date and the employer has to start over with fresh notice before it can end the job, unless it dismisses you for just cause or you agree in writing.

You're also owed paperwork: a written statement of your vacation benefits, wages, severance pay and other pay, due at least two weeks before the termination date if you were given notice, or by the termination date if you were paid in lieu.

Who gets nothing

The Code is unusually blunt here, and unusually narrow:

"This Division does not apply to an employee whose termination of employment is by way of dismissal for just cause." (CLC s. 229.1)

That is the only exclusion from the individual termination rules. There is no carve-out for fixed-term contracts, for construction work or for probation, which is a real difference from most provincial statutes. Some layoffs are treated as not being a termination at all, but that's a different thing from an exclusion.

Temporary layoff

A layoff is not treated as a termination if it lasts three months or less, or if it is caused by a strike or lockout (CLSR s. 30). Past three months it still doesn't count as a termination in four situations: your employer told you in writing at or before the layoff that you'd be recalled on a fixed date or within a fixed period no more than six months away, and then recalled you; you keep receiving agreed payments; your employer keeps up pension, group insurance or supplementary unemployment benefit contributions; or you hold recall rights under a collective agreement for a layoff of no more than twelve months.

Outside those cases, laying you off counts as terminating your employment for notice, for group termination and for severance pay.

Worked example: Dev's notice

Dev started at an interprovincial carrier on February 3, 2020 and his last day was September 30, 2026: six completed years. His regular rate for his regular hours came to $1,500 a week. Six years gives him 6 weeks of notice (CLC s. 230), and he was given none, so the whole entitlement is owed as wages in lieu: 6 weeks × $1,500 = $9,000.00.

Severance pay: the second entitlement, with no ceiling

Federally regulated workplaces and Ontario are the only two jurisdictions in the country with a statutory severance pay separate from notice. Here it is paid on top of the notice entitlement, and the condition is short:

"An employer who terminates the employment of an employee who has completed twelve consecutive months of continuous employment by the employer shall, except where the termination is by way of dismissal for just cause, pay to the employee the greater of…" (CLC s. 235)

12 months of continuous employment, and one exception: dismissal for just cause. That is the whole test. The old paragraph that took severance pay away from employees entitled to a pension or covered by an employer severance plan was repealed years ago, so ignore any page that still repeats it. A layoff counts as a termination for severance pay unless the regulation says otherwise.

How much

Severance pay is the greater of two amounts: 2 days wages at your regular rate for your regular hours for each completed year of continuous employment, and 5 days wages at that same rate (CLC s. 235). Short-service employees get that floor; because only completed years count, the per-year calculation takes over from your third completed year (two completed years still give four days, so the five-day floor wins). The Code sets no maximum. Ontario caps its severance pay. Here the formula just keeps adding, and only completed years count, never the leftover months.

Dev's regular rate worked out to $300 a day. Six completed years at 2 days each is $3,600.00, against a floor of 5 days, or $1,500.00. He takes the greater: $3,600.00, on top of his $9,000.00 of wages in lieu of notice, for a statutory minimum of $12,600.00 before vacation pay.

For a day's regular hours the regulations use the same window as the weekly figure: hours actually worked, overtime excluded, in the four complete weeks before termination divided by twenty, or eight hours where your hours are averaged (CLSR s. 31). That total is a floor and not a forecast. A lawyer may be able to recover more under common law or your contract, and this site publishes no such amounts.

Group terminations: when a whole group goes at once

The federal group rule has no tiers. When 50 employees or more are terminated simultaneously or within any 4 weeks at one industrial establishment, the notice is 16 weeks whether the threshold is barely met or thousands of jobs go (CLC s. 212).

Source: Canada Labour Code, s. 212 — Notice of group termination. Reviewed on September 6, 2026. Sixteen weeks before the first termination, the employer must notify the Head of Compliance and Enforcement in writing, and immediately copy that notice to the Minister of Employment and Social Development, the Canada Employment Insurance Commission and any union; employees with no union get the notice directly or see it posted at the workplace. This is on top of the individual notice under section 230, not instead of it. Each affected employee must also get a written statement of vacation benefits, wages, severance pay and other pay no later than two weeks before their termination date, and the employer must set up a joint planning committee.

That notice goes to the Head of Compliance and Enforcement, in writing, that far ahead of the first termination, with copies sent immediately to the Minister of Employment and Social Development, the Canada Employment Insurance Commission and any union. Employees with no union get the notice directly or see it posted at the workplace. It is in addition to the individual notice under s. 230, not instead of it, which is the opposite of how Ontario's group rule works and the opposite of Quebec's no-cumulation rule.

Your employer must also set up a joint planning committee, unless a collective agreement contains its own settled procedure or the terminations result from technological change.

Notice you owe when you quit

None. The Code sets no notice period for an employee who resigns from a federally regulated job; every notice duty in Divisions IX, X and XI is on the employer (CLC s. 230). Whatever your contract says about two weeks' notice is a contract question, not a Code one. Quitting does cost you the notice and severance entitlements, because both depend on the employer ending the employment, but it doesn't cost you your vacation pay, which is owed whenever the employment ends.

Vacation pay on your final pay

Federally regulated employees have the most generous statutory vacation pay in the country: the ladder reaches a fourth week, at a percentage no province matches (CLC s. 184).

Source: Canada Labour Code, s. 184 — Annual vacation with pay. Reviewed on September 6, 2026. Within 30 days of the day you stop being employed, the employer must pay any vacation pay still owing for a completed year of employment, plus the applicable percentage of the wages you earned in the part-year since your last vacation pay was paid.

Vacation pay is 4% of the wages you earned in the year of employment the vacation is for, 6% once you have completed five consecutive years with the same employer, and 8% at ten consecutive years (CLC s. 184.01). Vacation pay counts as wages for every purpose of the Code, so it carries the same protections as your regular pay.

When you stop being employed, your employer has 30 days to pay any vacation pay still owing for a completed year, plus the applicable percentage of the wages you earned in the part-year since your last vacation pay was paid (CLC s. 188). Dev earned $47,000 since his last payout, and at six years his rate is 6%, so that part-year amount is $2,820.00.

General holidays in your last weeks

The Code calls them general holidays and lists 10, a longer list than most provinces set (CLC s. 166). Family Day and the provincial August holidays are not on it.

Source: Canada Labour Code, s. 166 — Definition of general holiday. Reviewed on September 6, 2026. The statute names 10 holidays.

Holiday pay for each general holiday is at least one twentieth of the wages, overtime excluded, that you earned with that employer in the four-week period immediately before the week the holiday falls in (CLC s. 196). If you're paid wholly or partly by commission and have at least twelve weeks of continuous employment, it's one sixtieth of the wages, overtime excluded, earned in the twelve weeks before. Work the holiday and you also get at least time and a half for the hours worked.

There is no service requirement and no attendance test. Every employee is entitled to a holiday with pay on each general holiday that falls while they are employed (CLC s. 192). The old thirty-day qualifying rule was repealed in 2019, so any page that still asks for a month of service before holiday pay in a federally regulated job is publishing a figure that hasn't existed for years. The only employees who can lose the pay are those in a continuous operation who are called in and don't show up, or who make themselves unavailable when their conditions of employment required them to be available. If the holiday falls on a day you don't normally work, you get the day off with pay at another time, or it's added to your vacation.

When the final pay must arrive

Two clocks, both in the Code:

"an employer shall (a) pay to any employee any wages to which the employee is entitled on the regular pay-day of the employee …; and (b) pay any wages or other amounts to which the employee is entitled under this Part within thirty days from the time when the entitlement … arose." (CLC s. 247)

So ordinary wages land on your employer's regular pay day, and everything the Code entitles you to, including wages in lieu of notice and severance pay, is due within 30 days of the moment the entitlement arose, which for both of those is the end of the employment. Vacation pay runs on its own 30 days clock from the day you stop being employed, and it applies whether you quit or were let go.

Severance and Employment Insurance

Money paid because the job ended, whether it's severance pay, wages in lieu of notice or a vacation payout, normally counts as earnings for Employment Insurance. It's allocated to the weeks after your last day at the rate of a normal working week, so benefits don't start until it runs out. Allocation delays the payments; it doesn't cut the total weeks you can draw.

Apply as soon as the job ends rather than waiting for the money to settle, because a late application can cost you weeks. The EI section has the estimator, the hours your region requires and the current regional table, and severance pay and EI works through the allocation rule.

What the statutory minimum doesn't include

Everything above is the floor. Three things can sit above it, and none is calculated here.

• Common law reasonable notice. Courts award notice on facts a calculator can't see: your age, your job, your service, how hard a comparable job is to find. It's often well above the statutory minimum, and this site publishes no amounts for it.
• Your written contract. It can promise more than the Code. A term promising less isn't enforceable, but a badly drafted termination clause can still cost you the common law entitlement.
• A collective agreement. If you're unionized, your agreement may set out its own severance, recall rights and grievance timetable, and your steward comes first.

There is also a route the provinces mostly don't have. An unjust dismissal complaint under Division XIV is open to an employee who has completed twelve consecutive months of continuous employment, is not a manager and is not covered by a collective agreement (CLC s. 240). It must be filed within 90 days of the dismissal, and the Board can order reinstatement. An employer that pays you the statutory notice and severance does not close that door.

How to file a complaint

You complain in writing to the Head of Compliance and Enforcement at the Labour Program. For money owed, the deadline is 6 months from the last day the employer was required to pay it, not from your last day of work (CLC s. 251.01). For anything else it runs from the day the subject matter of the complaint arose. The Head can extend that deadline if you complained in time to a government official you believed had the authority to deal with it, and it turned out they didn't.

You can't run a wage complaint and an unjust dismissal complaint on substantially the same facts at once, but a complaint only about money you're owed, wages in lieu of notice and severance pay included, is allowed, and it simply waits until the dismissal complaint is withdrawn or resolved. The forms are on the Labour Program's page for filing a complaint about federal labour standards.