CanadaCan my employer force me to resign instead of firing me to avoid paying severance?
No, your employer cannot force you to resign to avoid paying severance — doing so may constitute a wrongful dismissal, and you remain entitled to severance if you have 12+ months of continuous service.
What the Law Says
The Canada Labour Code sets out clear rights for federally regulated employees facing termination. Severance pay is not optional — it’s a statutory entitlement when certain conditions are met.
If you work for a federally regulated employer (e.g., banks, airlines, interprovincial transport) and have completed at least 12 consecutive months of continuous employment, you are legally entitled to severance pay upon termination — regardless of how the employer labels it.
Your employer cannot bypass this obligation by pressuring, coercing, or tricking you into resigning. Courts treat such actions as constructive dismissal if your working conditions become intolerable, or as wrongful dismissal if the 'resignation' wasn’t truly voluntary.
Even if you submit a resignation, your employer generally cannot terminate you earlier than your stated last day without providing proper notice or pay in lieu — unless there’s just cause.
Statutory TextEmployee with 12 months' continuous service is entitled to severance pay equal to 2 days' wages per year of service.
— Canada Labour Code, s. 235 — Severance pay
What Courts Have Said
The Supreme Court of Canada has affirmed that employers cannot unilaterally cut short an employee’s resignation notice period without consequences — reinforcing that control over the timing and nature of termination rests with legal standards, not employer convenience.
An employer who terminates an employee before the end of their own resignation notice period must still provide notice or pay in lieu — because the employee’s resignation does not waive the employer’s legal obligations under labour standards.
What to Do
Document any pressure, threats, or unusual requests related to your resignation (e.g., emails, texts, witness names).
Do not sign anything waiving rights without independent legal advice.
If you’ve already resigned under pressure, contact your provincial or federal labour standards office — or consult an employment lawyer — within strict time limits.
For federally regulated workers, file a complaint with the Canada Labour Program within 6 months of termination.
Sources
Not legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.