Termination Of Employment

A variety of expressions are frequently used to describe circumstances when work is ended. These consist of “release,” “discharged,” “dismissed,” “fired” and “permanently laid off.”

Under the Employment Standards Act, 2000 (ESA) an individual’s work is terminated if the company:

– dismisses or stops using a staff member, including where a staff member is no longer employed due to the bankruptcy or insolvency of the company;

– “constructively” dismisses a worker and the worker resigns, in reaction, within an affordable time;

– lays an employee off for a period that is longer than a “temporary layoff”.

In many cases, when a company ends the work of a worker who has been continuously employed for three months, the company must provide the employee with either written notification of termination, termination pay or a mix (as long as the notification and the number of weeks of termination pay together equivalent the length of notice the worker is entitled to receive).

The ESA does not need a company to provide a worker a reason their employment is being ended. There are, nevertheless, some circumstances where an employer can not terminate an employee’s employment even if the company is prepared to give appropriate written notification or termination pay. For instance, an employer can not end somebody’s employment, or penalize them in any other way, if any part of the reason for the termination of employment is based on the employee asking concerns about the ESA or exercising a right under the ESA, such as declining to work in excess of the everyday or weekly hours of work maximums, or taking a leave of absence defined in the ESA. Please see the chapter on reprisals.

Getting approved for termination notice or pay in lieu

Certain employees are not entitled to notice of termination or termination pay under the ESA. Examples include: workers who are guilty of wilful misconduct, disobedience, or wilful overlook of task that is not trivial and has not been condoned by the employer. Other examples include construction employees, workers on short-term layoff, workers who refuse a deal of affordable alternative work and employees who have actually been employed less than 3 months.

There are a variety of other exemptions to the termination of work provisions of the ESA. See “Exemptions to notice of termination or termination pay.” Please also describe the special guideline tool.

The termination-of-employment guidelines are completely separate from any privileges an employee might have to be paid discontinuance wage under the ESA.

Constructive termination

A positive termination may happen when a company makes a substantial change to an essential term or condition of a staff member’s work without the worker’s actual or implied permission.

For example, a staff member might be constructively dismissed if the employer makes modifications to the employee’s terms of employment that result in a considerable reduction in wage or a significant negative change in such things as the worker’s work place, hours of work, authority, or position. Constructive termination might also consist of situations where a company pesters or abuses a worker, or an employer offers a worker a warning to “quit or be fired” and the staff member resigns in action.

The staff member would need to resign in reaction to the modification within an affordable duration of time in order for the company’s actions to be considered a termination of employment for functions of the ESA.

Constructive dismissal is a complex and tough subject. For additional information on constructive termination, please call the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A worker is on short-term layoff when a company cuts down or stops the employee’s work without ending their employment (for instance, laying someone off at times when there is not enough work to do). The mere truth that the company does not define a recall date when laying the staff member off does not necessarily suggest that the lay-off is not temporary. Note, nevertheless, that a lay-off, even if intended to be temporary, might result in positive dismissal if it is not permitted by the employment contract.

For the functions of the termination provisions of the ESA, a “week of layoff” is a week in which the staff member earned less than half of what they would ordinarily earn (or earns typically) in a week.

A week of layoff does not include any week in which the employee did not work for several days due to the fact that the worker was unable or available to work, employment underwent disciplinary suspension, or was not supplied with work because of a strike or lockout at their place of work or somewhere else.

Employers are not required under the ESA to offer workers with a written notice of a momentary layoff, nor do they have to provide a reason for the lay-off. (They may, however, be needed to do these things under a cumulative contract or an employment agreement.)

Under the ESA, a “short-term layoff” can last:

1. not more than 13 weeks of layoff in any period of 20 successive weeks;
or

2. more than 13 weeks in any period of 20 consecutive weeks, however less than 35 weeks of layoff in any period of 52 consecutive weeks, where:- the employee continues to get significant payments from the company;
or

– the employer continues to pay for the advantage of the employee under a genuine group or worker insurance strategy (such as a medical or drug insurance coverage plan) or a genuine retirement or pension;
or

– the employee gets supplementary welfare;
or

– the staff member would be entitled to receive additional joblessness benefits but isn’t getting them since they are used elsewhere;
or

– the employer remembers the staff member to work within the time frame authorized by the of Employment Standards;
or

– the employer remembers the staff member within the time frame set out in an arrangement with a worker who is not represented by a trade union;
or

3. a layoff longer than a layoff described in ‘B’ where the company remembers a worker who is represented by a trade union within the time set out in an agreement between the union and the employer.

If a staff member is laid off for a duration longer than a temporary layoff as set out above, the company is considered to have ended the staff member’s work. Generally, the worker will then be entitled to termination pay.

Written notice of termination and termination pay

Under the ESA, an employer can terminate the work of an employee who has been utilized constantly for 3 months or more if either:

– the company has actually given the worker proper composed notice of termination and the notice period has expired

– the employer pays termination pay to the employee where no composed notification or less notice than is required is given

Written notice of termination

A staff member is entitled to observe of termination (or termination pay rather of notice) if they have actually been constantly utilized for at least three months. An individual is considered “used” not just while they are actively working, however likewise during whenever in which they are not working however the work relationship still exists (for instance, time in which the staff member is off sick or on leave or on lay-off).

The amount of notice to which a staff member is entitled depends on their “period of employment”. An employee’s period of work consists of not only perpetuity while the employee is actively working however likewise at any time that they are not working however the employment relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a momentary lay-off, the staff member’s employment is considered (or thought about) to have actually been ended on the first day of the lay-off-any time after that does not count as part of the staff member’s duration of employment, even though the worker might still be utilized for purposes of the “constantly employed for 3 months” qualification

– if two different periods of employment are separated by more than 13 weeks, only the most recent duration counts for purposes of notice of termination

It is possible, in some situations, for a person to have been “continually employed” for 3 months or more and yet have a duration of work of less than three months. In such circumstances, the employee would be entitled to notice due to the fact that a staff member who has actually been continually employed for a minimum of three months is entitled to notice, and the minimum notice entitlement of one week applies to a worker with a duration of employment of any length less than one year.

The following chart specifies the quantity of notice required:

Note: Special rules figure out the amount of notification required in the case of mass terminations – where the employment of 50 or more workers is terminated at a company’s facility within a four-week period.

Requirements during the statutory notice duration

During the statutory notice period, an employer should:

– not decrease the staff member’s wage rate or alter any other term or condition of work;

– continue to make whatever contributions would be required to keep the worker’s benefits strategies; and

– pay the staff member the incomes they are entitled to, which can not be less than the staff member’s regular wages for a routine work week every week.

Regular rate

This is a worker’s rate of spend for each non-overtime hour of work in the staff member’s work week.

Regular earnings

These are incomes besides overtime pay, vacation pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and severance pay and certain legal entitlements.

Regular work week

For an employee who typically works the same number of hours weekly, a routine work week is a week of that many hours, not consisting of overtime hours.

Some workers do not have a regular work week. That is, they do not work the exact same number of hours every week or they are paid on a basis other than time. For these staff members, the “regular earnings” for a “routine work week” is the typical amount of the routine earnings earned by the worker in the weeks in which the worker worked during the duration of 12 weeks immediately preceding the date the notification was offered.

A company is not allowed to schedule a staff member’s getaway time during the statutory notification duration unless the employee-after getting written notification of termination of employment-agrees to take their trip time throughout the notification period.

If an employer supplies longer notice than is needed, the statutory part of the notification period is the last part of the period that ends on the date of termination.

How to offer written notification

For the most part, written notification of termination of work must be resolved to the staff member. It can be offered face to face or by mail, fax or e-mail, as long as delivery can be verified.

There are unique rules for providing notification of termination if an employee has an agreement of work or a collective contract that supplies seniority rights that permit a worker who is to be laid off or whose employment is to be ended to displace (” bump”) other staff members.

In that case, the employer should post a notification in the workplace (where it will be seen by the staff members) setting out the names, seniority and task classification of those staff members the company plans to end and the date of the proposed termination. The posting of the notification is thought about to be notification of termination, since the date of the posting, to a worker who is “bumped” by a staff member called in the notification. However, this notice of termination need to still fulfill the length requirements set out in the ESA.

There are also unique guidelines regarding how notice is provided when there is a mass termination.

Termination pay

A worker who does not receive the composed notice needed under the ESA should be given termination pay in lieu of notification. Termination pay is a swelling amount payment equal to the routine incomes for a routine work week that an employee would otherwise have actually been entitled to during the written notification duration. A worker earns trip pay on their termination pay. Employers need to also continue to make whatever contributions would be needed to maintain the benefits the staff member would have been entitled to had they continued to be utilized through the notice period.

Example: Regular work week

Sarah has actually worked for three and a half years. Now her job has actually been removed and her employment has been terminated. Sarah was not given any written notice of termination.

Sarah worked 40 hours a week each week and was paid $20.00 an hour. She also got 4 per cent trip pay. Because she worked for more than 3 years however less than four years, she is entitled to three weeks’ pay in lieu of notice.

Sarah’s regular salaries for a routine work week are computed:

$ 20.00 an hour X 40 hours a week = $800.00 a week

Her termination pay is determined:

$ 800.00 X 3 weeks = $2,400.00

Then her vacation pay on her termination pay is calculated:

4% of $2,400.00 = $96.00

Finally, her trip pay is added to her termination pay:

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The employer needs to also make sure ongoing protection for any benefit or pension plans that used to her for 3 weeks.

Example: No regular work week

Gerry has worked at a retirement home for four years. He works every week, but his hours vary from week to week. His rate of pay is $25.00 an hour, and he is paid 6 per cent getaway pay.

Gerry’s company removed his position and did not give Gerry any written notification of termination. Gerry was ill and off work for 2 of the 12 weeks immediately preceding the day his work was terminated. Gerry earned $1,800.00 in the 12 weeks before the day on which his employment ended.

Gerry is entitled to 4 weeks of termination pay.

Gerry’s typical revenues per week are determined:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for two weeks for that reason these weeks are not included in the estimation of typical incomes) = $180.00 a week

His termination pay is computed:

$ 180.00 × 4 weeks = $720.00

Then his holiday pay on his termination pay is computed:

6% of $720.00 = $43.20

Finally, his holiday pay is included to his termination pay:

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company must also ensure continued protection for any benefit or pension strategies that applied to him for 4 weeks.

When to pay termination pay

Termination pay must be paid to a worker either seven days after the worker’s work is terminated or on the staff member’s next routine pay date, whichever is later on.

Mass termination

Special guidelines for notification of termination may apply in cases of mass termination (when a company is ending 50 or more staff members at its facility within a four-week period).

Meaning of “establishment”

An “establishment” is a place at which the employer carries on organization. Separate places can be considered one facility if either:

– they lie within the very same municipality, or

– a worker at one location has contractual seniority rights that reach the other area, permitting the worker to displace another employee (likewise called “bumping rights”).

Effective October 26, 2023, in cases of mass termination, the term “facility” includes an employee’s home, but just if the employee works from home and does not operate at any other area where the employer carries on company.

This will need that staff members who work exclusively from another location be thought about for inclusion in the count when figuring out whether 50 or more employees have actually been terminated.

Note that where an employee carries out work both from their home and from another location where the employer brings on company (for instance, a workplace), their home is not consisted of in the definition of “establishment”. Instead, the worker is thought about to have a connection to the workplace location and, employment for that reason, for the purpose of mass termination, the worker is consisted of with respect to that office place.

Example: where numerous locations are thought about one “facility”

ABC Company has a workplace and a warehouse situated in London, ON. Sabrina resides in London and works for ABC Company specifically from another location: she carries out work for the company from home and does not work at the office.

For the function of mass termination, the company’s London office, London storage facility and Sabrina’s London home are considered one “facility.”

Employer commitments in a mass termination

When a mass termination occurs, the employer must finish and deliver the Form 1 (Notice of termination of work) to the Director of Employment Standards (Director) by:

– e-mail to esa_form1_notice@ontario.ca.

– fax to (416) 326-7061.

– personal shipment to the Director’s workplace on a day and at a time when it is open.

– mail delivery to the Director’s office, if the delivery can be verified.

The workplace of the Director of Employment Standards is found on the 9th floor, 400 University Avenue, Toronto ON M7A 1T7.

Any notification to the affected employees is ruled out to have been offered up until the Form 1 is gotten by the Director; simply put, notification of mass termination is ineffective up until the Director receives the Form 1.

In addition to supplying workers with private notifications of termination, the company must, on the very first day of the notice period:

– publish a copy of the Form 1 supplied to the Director in the work environment where it will come to the attention of the affected staff members.

– provide a copy of the Form 1 to each affected employee.

The amount of notification workers need to receive in a mass termination is not based on the employees’ length of employment, but on the number of workers who have actually been terminated. A company should give:

– 8 weeks discover if the employment of 50 to 199 staff members is to be terminated

– 12 weeks notice if the work of 200 to 499 employees is to be ended

– 16 weeks observe if the employment of 500 or more employees is to be terminated

Exception to the mass termination rules

The mass termination guidelines do not use if these 2 things apply:

– the variety of employees whose employment is being ended represents not more than 10 per cent of the employees who have been used for employment at least three months at the facility

– none of the terminations are triggered by the permanent discontinuance of all or part of the company’s business at the establishment

Mass termination: resignation by an employee

An employee who has actually received termination notification under the mass termination rules who wishes to resign before the termination date provided in the company’s notification must offer the employer a minimum of one week’s written notification of resignation if the employee has been utilized for less than 2 years. If the work period has actually been two years or more, the employee needs to provide at least two weeks’ composed notification of resignation. However, the staff member does not need to notify of resignation if the employer constructively dismisses the staff member or breaches a regard to the contract.

Temporary work after termination date in notice

A company can supply work to a worker who has been notified of termination on a short-lived basis in the 13-week period after the termination date set out in the notification without impacting the original date of the termination and without being required to provide any additional notice of termination to the employee when the short-term work ends.

If a worker works beyond the 13-week duration after the termination date and after that has their work terminated, the employee will be entitled to a new composed notice of termination as if the previous notice had actually never ever been provided. The worker’s period of work will then likewise include the duration of momentary work.

Recall rights

A “recall right” is the right of a staff member on a layoff to be recalled to work by their company under a term or condition of work. This right is commonly found in cumulative arrangements.

A worker who has recall rights and who is entitled to termination pay because of a layoff of 35 weeks or more may choose to:

– keep their recall rights and not be paid termination pay (or severance pay, if they were entitled to discontinuance wage) at that time;
or

– give up their recall rights and get termination pay (and severance pay, if they were entitled to discontinuance wage).

If a worker is entitled to both termination pay and severance pay, they should make the exact same choice for both.

If a staff member who is not represented by a trade union chooses to keep their recall rights or fails to decide, the employer needs to send out the quantity of the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If an employee who is represented by a trade union chooses to keep their recall rights or fails to decide, the company and the trade union need to attempt to come to an arrangement to hold the termination pay (and severance pay, if any) in trust for the employee. If they can not concern a plan, and the trade union encourages the company and the Director of Employment Standards in composing that efforts have actually failed, the employer must send the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If a worker picks to offer up their recall rights or if the recall rights end, the cash that is held in trust needs to be sent out to the worker.

If the staff member accepts a recall back to work, the cash that is kept in trust will be gone back to the employer.

Exemptions to observe of termination or termination pay

A lot of these exemptions are intricate. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you require more details. Please also describe the unique guideline tool.

The notice of termination and termination pay requirements of the ESA do not use to a worker who:

– is guilty of wilful misbehavior, disobedience or wilful neglect of responsibility that is not unimportant and has actually not been excused by the employer. Note: “wilful” includes when a staff member planned the resulting consequence or acted recklessly if they knew or ought to have understood the results their conduct would have. Poor work conduct that is accidental or unintentional is normally ruled out wilful;

– was employed for a specific length of time or up until the completion of a particular task. However, such a worker will be entitled to observe of termination or termination pay if:- the employment ends before the term expires or the task is completed; or

– the term expires or the task is not finished more than 12 months after the work began; or

– the employment continues for 3 months or more after the term ends or the task is completed;

See likewise: Employment Standards Self-Service Tool

Wrongful termination

Rights greater than ESA notice of termination, termination pay, severance pay

The guidelines under the ESA about termination and severance of employment are minimum requirements. Some workers might have rights under the typical law that are greater than the rights to see of termination (or termination pay) and severance pay under the ESA. An employee might wish to sue their former employer in court for “wrongful dismissal”. Employees must understand that they can not take legal action against a company for wrongful dismissal and sue for termination pay or severance pay with the ministry for the exact same termination or severance of employment. An employee must choose one or the other. Employees might want to get legal suggestions concerning their rights.