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  • Founded Date June 30, 2009
  • Sectors Education Training
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Termination Of Employment

A number of expressions are commonly used to describe situations when work is ended. These consist of “release,” “released,” “dismissed,” “fired” and “completely laid off.”

Under the Employment Standards Act, 2000 (ESA) a person’s work is terminated if the employer:

– dismisses or stops employing a staff member, including where a staff member is no longer used due to the bankruptcy or insolvency of the employer;

– “constructively” dismisses a worker and the staff member resigns, in action, within a reasonable time;

– lays a staff member off for a period that is longer than a “momentary layoff”.

In many cases, when an employer ends the work of a worker who has actually been continuously used for 3 months, the employer needs to supply the staff member with either composed notice of termination, termination pay or a mix (as long as the notification and the number of weeks of termination pay together equal the length of notice the staff member is entitled to receive).

The ESA does not need an employer to provide a staff member a reason why their employment is being terminated. There are, nevertheless, some circumstances where a company can not end a worker’s work even if the employer is prepared to provide correct written notice or termination pay. For example, a company can not end someone’s work, or penalize them in any other method, if any part of the factor for the termination of employment is based upon the worker asking concerns about the ESA or working out a right under the ESA, such as declining to work in excess of the everyday or weekly hours of work optimums, or job taking a leave of lack defined in the ESA. Please see the chapter on reprisals.

Qualifying for termination notice or pay in lieu

Certain employees are not entitled to notice of termination or termination pay under the ESA. Examples consist of: staff members who are guilty of wilful misbehavior, job disobedience, or wilful neglect of responsibility that is not minor and has actually not been condoned by the employer. Other examples include construction staff members, employees on short-lived layoff, employees who refuse an offer of sensible alternative work and staff members who have been used less than three months.

There are a number of other exemptions to the termination of work provisions of the ESA. See “Exemptions to notice of termination or termination pay.” Please likewise refer to the unique rule tool.

The termination-of-employment rules are entirely separate from any entitlements a staff member may need to be paid severance pay under the ESA.

Constructive termination

A constructive termination may happen when a company makes a significant modification to a basic term or condition of a worker’s employment without the employee’s real or implied approval.

For instance, a worker might be constructively dismissed if the company makes changes to the staff member’s conditions of employment that lead to a substantial decrease in wage or a significant negative change in such things as the staff member’s work area, hours of work, authority, or position. Constructive dismissal might likewise include scenarios where an employer pesters or abuses a staff member, or a company offers an employee an ultimatum to “stop or be fired” and the worker resigns in response.

The employee would have to resign in response to the modification within a sensible time period in order for the company’s actions to be considered a termination of employment for purposes of the ESA.

Constructive dismissal is a complex and tough subject. For more info on positive termination, please get in touch with the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A worker is on short-lived layoff when an employer cuts down or stops the worker’s work without ending their employment (for example, laying someone off sometimes when there is insufficient work to do). The mere fact that the employer does not specify a recall date when laying the employee off does not always indicate that the lay-off is not short-lived. Note, however, that a lay-off, even if intended to be short-lived, may lead to positive termination if it is not permitted by the employment agreement.

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 makes usually) in a week.

A week of layoff does not consist of any week in which the employee did not work for several days because the staff member was unable or readily available to work, underwent disciplinary suspension, or was not offered with work since of a strike or lockout at their location of work or somewhere else.

Employers are not required under the ESA to supply employees with a written notification of a momentary layoff, nor do they have to supply a factor for the lay-off. (They may, however, be needed to do these things under a collective agreement or an employment agreement.)

Under the ESA, a “temporary layoff” can last:

1. not more than 13 weeks of layoff in any duration of 20 consecutive weeks;
or

2. more than 13 weeks in any duration of 20 successive weeks, however less than 35 weeks of layoff in any period of 52 successive weeks, where:- the staff member continues to get considerable payments from the company;
or

– the company continues to make payments for the benefit of the worker under a legitimate group or staff member insurance plan (such as a medical or drug insurance coverage plan) or a legitimate retirement or pension strategy;
or

– the employee receives extra welfare;
or

– the worker would be entitled to get supplementary joblessness advantages however isn’t getting them due to the fact that they are employed elsewhere;
or

– the company recalls the staff member to work within the time frame approved by the Director of Employment Standards;
or

– the company remembers the employee within the time frame set out in an arrangement with an employee who is not represented by a trade union;
or

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

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

Written notice of termination and termination pay

Under the ESA, an employer can terminate the employment of an employee who has been utilized continually for three months or more if either:

– the employer has actually offered the employee correct composed notice of termination and the notification period has actually expired

– the employer pays termination pay to the worker where no written notification or less notice than is needed is given

Written notification of termination

An is entitled to observe of termination (or termination pay rather of notice) if they have been continually employed for at least 3 months. An individual is considered “utilized” not just while they are actively working, but likewise throughout at any time in which they are not working however the work relationship still exists (for instance, time in which the staff member is off ill or on leave or on lay-off).

The amount of notice to which a staff member is entitled depends upon their “period of work”. A worker’s period of work includes not only perpetuity while the worker is actively working but also at any time that they are not working but the work relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a short-lived lay-off, the employee’s work is considered (or thought about) to have been terminated on the very first day of the lay-off-any time after that does not count as part of the staff member’s period of employment, despite the fact that the worker may still be utilized for purposes of the “constantly used for 3 months” qualification

– if two different durations of employment are separated by more than 13 weeks, just the most current period counts for purposes of notice of termination

It is possible, in some situations, for a person to have been “continually utilized” for three months or more and yet have a period of work of less than 3 months. In such circumstances, the employee would be entitled to observe since a staff member who has actually been continually utilized for at least 3 months is entitled to see, and the minimum notice privilege of one week uses to an employee with a duration of work of any length less than one year.

The following chart specifies the quantity of notification needed:

Note: Special guidelines figure out the amount of notice required when it comes to mass terminations – where the work of 50 or more staff members is ended at a company’s facility within a four-week duration.

Requirements during the statutory notification period

During the statutory notification period, a company must:

– not reduce the employee’s wage rate or alter any other term or condition of work;

– continue to make whatever contributions would be required to preserve the employee’s advantages plans; and

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

Regular rate

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

Regular earnings

These are wages besides overtime pay, trip pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and severance pay and particular legal privileges.

Regular work week

For a staff member who normally works the same number of hours every week, 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 weekly or they are paid on a basis aside from time. For these employees, the “routine incomes” for a “routine work week” is the typical amount of the regular wages earned by the employee in the weeks in which the employee worked throughout the period of 12 weeks instantly preceding the date the notification was offered.

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

If a company supplies longer notification than is needed, the statutory part of the notice duration is the last part of the duration that ends on the date of termination.

How to supply written notification

In many cases, composed notification of termination of employment should be dealt with to the employee. It can be provided face to face or by mail, fax or e-mail, as long as delivery can be verified.

There are special rules for supplying notice of termination if a staff member has an agreement of employment or a collective contract that provides seniority rights that enable a worker who is to be laid off or whose work is to be terminated to displace (” bump”) other staff members.

In that case, the company needs to post a notification in the work environment (where it will be seen by the staff members) setting out the names, seniority and task classification of those workers the company means to end and the date of the proposed termination. The posting of the notice is considered to be notice of termination, as of the date of the posting, to a staff member who is “bumped” by a staff member named in the notification. However, this notification of termination must still satisfy the length requirements set out in the ESA.

There are likewise special guidelines relating to how notice is offered when there is a mass termination.

Termination pay

An employee who does not get the composed notification needed under the ESA must be given termination pay in lieu of notification. Termination pay is a swelling amount payment equivalent to the routine earnings for a regular work week that an employee would otherwise have been entitled to throughout the composed notification duration. An employee makes holiday pay on their termination pay. Employers need to also continue to make whatever contributions would be needed to keep the advantages the worker would have been entitled to had they continued to be employed through the notification duration.

Example: Regular work week

Sarah has worked for 3 and a half years. Now her job has actually been removed and her employment has been ended. Sarah was not given any composed notice of termination.

Sarah worked 40 hours a week every week and was paid $20.00 an hour. She also got 4 percent vacation pay. Because she worked for more than 3 years but less than four years, she is entitled to three weeks’ pay in lieu of notification.

Sarah’s routine earnings for a routine work week are determined:

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

Her termination pay is calculated:

$ 800.00 X 3 weeks = $2,400.00

Then her trip pay on her termination pay is determined:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The company must likewise ensure ongoing coverage for any advantage or pension that applied to her for 3 weeks.

Example: No regular work week

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

Gerry’s employer removed his position and did not give Gerry any composed notice of termination. Gerry was ill and off work for two of the 12 weeks instantly preceding the day his employment was terminated. Gerry earned $1,800.00 in the 12 weeks before the day on which his work ended.

Gerry is entitled to 4 weeks of termination pay.

Gerry’s average earnings each week are computed:

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

His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00

Then his trip pay on his termination pay is calculated:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer should likewise make sure ongoing coverage for any benefit or pension that applied to him for 4 weeks.

When to pay termination pay

Termination pay should 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 notice of termination may use in cases of mass termination (when an employer is ending 50 or more employees at its facility within a four-week duration).

Meaning of “facility”

An “establishment” is a place at which the company continues business. Separate places can be considered one facility if either:

– they lie within the exact same municipality, or

– an employee at one place has contractual seniority rights that encompass the other place, allowing the worker to displace another staff member (also called “bumping rights”).

Effective October 26, 2023, in cases of mass termination, the term “establishment” consists of a staff member’s home, however just if the employee works from home and does not work at any other area where the employer brings on organization.

This will require that employees who work solely from another location be considered for inclusion in the count when figuring out whether 50 or more workers have actually been terminated.

Note that where a staff member carries out work both from their home and from another area where the employer continues organization (for instance, an office), their home is not consisted of in the meaning of “facility”. Instead, the worker is considered to have a connection to the office area and, therefore, for the function of mass termination, the staff member is consisted of with regard to that workplace place.

Example: where several areas are thought about one “establishment”

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

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

Employer obligations in a mass termination

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

– email 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 shipment can be verified.

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

Any notification to the impacted employees is ruled out to have actually been offered till the Form 1 is received by the Director; to put it simply, notification of mass termination is not effective up until the Director gets the Form 1.

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

– post a copy of the Form 1 provided to the Director in the workplace where it will come to the attention of the affected employees.

– offer a copy of the Form 1 to each impacted worker.

The quantity of notification workers need to get in a mass termination is not based upon the employees’ length of work, however on the variety of workers who have been ended. An employer needs to provide:

– 8 weeks notice if the employment of 50 to 199 workers is to be terminated

– 12 weeks see if the employment of 200 to 499 workers is to be ended

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

Exception to the mass termination guidelines

The mass termination rules do not use if these two things use:

– the variety of workers whose employment is being ended represents not more than 10 per cent of the employees who have been employed for a minimum of 3 months at the facility

– none of the terminations are brought on by the permanent discontinuance of all or part of the company’s organization at the facility

Mass termination: resignation by a staff member

A worker who has received termination notice under the mass termination rules who wishes to resign before the termination date provided in the company’s notice need to provide the company at least one week’s written notification of resignation if the worker has actually been employed for less than 2 years. If the work duration has actually been 2 years or more, the staff member should provide a minimum of two weeks’ composed notification of resignation. However, the worker does not have to notify of resignation if the company constructively dismisses the staff member or breaches a term of the agreement.

Temporary work after termination date in notice

An employer can provide 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 notice without impacting the original date of the termination and without being needed to offer any additional notice of termination to the staff member when the momentary work ends.

If a staff member works beyond the 13-week duration after the termination date and then has their employment terminated, job the staff member will be entitled to a brand-new composed notification of termination as if the previous notification had actually never ever been given. The employee’s duration of work will then likewise consist of the duration of momentary work.

Recall rights

A “recall right” is the right of an employee on a layoff to be recalled to work by their company under a term or condition of work. This right is commonly discovered in collective contracts.

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

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

– quit their recall rights and receive termination pay (and severance pay, if they were entitled to severance pay).

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

If a worker who is not represented by a trade union elects to keep their recall rights or fails to make an option, the company should send out the quantity of the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.

If a worker who is represented by a trade union chooses to keep their recall rights or stops working to decide, the employer and the trade union must attempt to come to an arrangement to hold the termination pay (and severance pay, if any) in trust for the worker. If they can not concern an arrangement, and the trade union recommends the employer and the Director of Employment Standards in writing that efforts have stopped working, the employer should send out the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.

If an employee picks to give up their recall rights or if the recall rights expire, the cash that is kept in trust needs to be sent to the employee.

If the employee accepts a recall back to work, the cash that is held in trust will be gone back to the company.

Exemptions to discover of termination or termination pay

Many of these exemptions are complicated. Please contact the Employment Standards Information Centre, 1-800-531-5551, if you need more details. Please likewise describe the unique guideline tool.

The notification of termination and termination pay requirements of the ESA do not use to a staff member who:

– is guilty of wilful misbehavior, disobedience or wilful overlook of responsibility that is not trivial and has actually not been condoned by the employer. Note: “wilful” consists of when a worker intended the resulting consequence or acted recklessly if they knew or ought to have understood the effects their conduct would have. Poor work conduct that is accidental or unintentional is usually not thought about wilful;

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

– the term ends or the task is not finished more than 12 months after the employment began; or

– the work continues for 3 months or more after the term expires or the job is completed;

See also: Employment Standards Self-Service Tool

Wrongful termination

Rights greater than ESA notice of termination, termination pay, discontinuance wage

The guidelines under the ESA about termination and severance of employment are minimum requirements. Some workers might have rights under the common law that are higher than the rights to observe of termination (or termination pay) and severance pay under the ESA. A worker might want to sue their former employer in court for “wrongful dismissal”. Employees must understand that they can not take legal action against an employer for wrongful termination and submit a claim for termination pay or severance pay with the ministry for the exact same termination or severance of employment. A worker must pick one or the other. Employees may wish to obtain legal guidance concerning their rights.

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