By: Stephanie McDonald and Baljinder (Bal) Singh Tiwana
If you’ve lost your job in Ontario, you should apply for Employment Insurance (EI) immediately, even if you received your severance. Delaying your application can cost you benefits.
Understanding the current rules helps you make informed decisions and protect your financial position during a job transition.
What Is Employment Insurance (EI)?
Employment Insurance (EI) provides temporary financial support if you lose your job through no fault of your own while you look for new work. If you were terminated without cause, you will generally want to apply for regular EI benefits.
To qualify, you generally must:
- Have lost your job through no fault of your own;
- Be ready, willing and capable of working and actively looking for a new job; and
- Have between 420 and 700 insurable hours in your qualifying period, depending on the unemployment rate in your region.
You should apply as soon as your employment ends, even if you have received or are negotiating severance.
Temporary EI Measures
Current temporary government measures, recently extended until October 10, 2027, allow eligible workers to receive EI benefits without having certain separation payments, including lump sum severance payments and vacation pay, allocated against their EI benefits. Under the usual rules, these payments can delay the start of EI benefits. For now, that treatment is suspended for qualifying claims.
These measures are temporary and may not apply to every EI claim. The rules can also change again when the temporary measures expire.
Apply Right Away
Do not wait for your severance to be paid, before applying for EI. Submit your EI application online as soon as your employment ends. Late applications can lead to lost benefits.
Who Decides Eligibility?
Service Canada decides whether you qualify for EI and when your benefits start. Your employer does not make that decision, although Service Canada may obtain information from your employer when assessing your claim.
Allegations of Misconduct
If your employer alleges misconduct (dismissed with cause), Service Canada will assess the situation independently by gathering information from your employer to make a fair and objective decision.
If you were dismissed without cause and meet the eligibility requirements, you will often still qualify for EI.
Constructive Dismissal and EI
EI generally does not cover someone who voluntarily quits their job without just cause, so constructive dismissal cases can create a dispute about whether you quit or were dismissed.
An employer may report that you quit, but that does not necessarily decide the issue. You will have an opportunity to explain to Service Canada why you left, what happened at work, and why you believed you had no reasonable alternative but to resign.
What If Your EI Claim Is Denied?
If Service Canada denies your EI claim, you can ask for the decision to be reconsidered. You generally have 30 days from the date the decision was communicated to you to submit a request for reconsideration.
If the reconsideration decision is still not in your favour, you may be able to appeal to the Social Security Tribunal of Canada.
Don’t assume a denial is the end of the road. EI decisions can be challenged, particularly where there is a dispute about why your employment ended or whether your circumstances amount to misconduct.
If you receive an EI denial, pay close attention to the deadline and consider getting legal advice before deciding whether to appeal.
Conclusion
Navigating severance and Employment Insurance can be confusing, especially as rules change and timing affects your financial outcome.
Workplace Sage Legal can help you make sense of these moving parts and take control of your situation. By assessing your severance package, advising on the best structure for your payments, and guiding you through EI eligibility, we can help you make informed decisions at every step.
With the right guidance, you can avoid costly mistakes, maximize your entitlements, and move forward with confidence during your job transition.
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Learn more about employment law through the articles below:
- I feel Guilty Negotiating my Severance
- Ontario Severance Packages: Why You Should Almost Never Accept the First Offer
- Who is entitled to Reasonable Notice, and how is it calculated?
DISCLAIMER: This article/blog is provided for educational/informational purposes only. This blog does not constitute legal advice. Do not rely on any advice before speaking with a lawyer. This blog does not form a solicitor-client relationship.
