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Termination Of Employment

A variety of expressions are frequently utilized to explain situations when work is ended. These include “let go,” “discharged,” “dismissed,” “fired” and “completely laid off.”

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

– dismisses or stops using a staff member, consisting of where a worker is no longer employed due to the personal bankruptcy or insolvency of the employer;

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

– lays an employee off for a duration that is longer than a “momentary layoff”.

For the most part, when an employer ends the work of a worker who has actually been continuously used for 3 months, the company must offer the staff member with either composed notice of termination, termination pay or a combination (as long as the notification and the number of weeks of termination pay together equal the length of notification the staff member is entitled to receive).

The ESA does not require a company to provide an employee a reason their employment is being ended. There are, however, some circumstances where an employer can not end a worker’s work even if the employer is prepared to offer proper written notice or termination pay. For example, a company can not end someone’s work, or punish them in any other method, if any part of the reason for the termination of work is based upon the staff member 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 maximums, or taking a leave of absence defined in the ESA. Please see the chapter on reprisals.

Qualifying for termination notice or pay in lieu

Certain staff members are not entitled to see of termination or termination pay under the ESA. Examples consist of: staff members who are guilty of wilful misbehavior, disobedience, or wilful neglect of responsibility that is not minor and has not been excused by the employer. Other examples consist of construction workers, employees on short-term layoff, staff members who refuse a deal of affordable alternative work and workers who have been employed less than 3 months.

There are a number of other exemptions to the termination of employment provisions of the ESA. See “Exemptions to see of termination or termination pay.” Please likewise describe the special guideline tool.

The termination-of-employment guidelines are totally separate from any entitlements an employee may need to be paid discontinuance wage under the ESA.

Constructive dismissal

A useful termination might take place when a company makes a considerable change to a basic term or condition of an employee’s employment without the worker’s actual or implied authorization.

For instance, an employee might be constructively dismissed if the employer makes changes to the employee’s conditions of employment that lead to a significant decrease in income or a significant negative modification in such things as the employee’s work location, hours of work, authority, or position. Constructive termination might likewise consist of scenarios where a company bugs or abuses an employee, or a company offers a worker an ultimatum to “stop or be fired” and the worker resigns in response.

The staff member would have to resign in reaction to the change within an affordable duration of time in order for the employer’s actions to be considered a termination of employment for purposes of the ESA.

Constructive termination is a complex and tough topic. To learn more on useful dismissal, please call the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A staff member is on momentary layoff when a company cuts down or stops the staff member’s work without ending their employment (for example, laying somebody off sometimes when there is insufficient work to do). The simple fact that the employer does not define a recall date when laying the employee off does not always suggest that the lay-off is not short-term. Note, nevertheless, that a lay-off, even if planned to be short-term, might lead to useful termination if it is not enabled by the employment agreement.

For the purposes of the termination provisions of the ESA, a “week of layoff” is a week in which the employee made less than half of what they would generally earn (or makes usually) in a week.

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

Employers are not needed under the ESA to offer staff members with a composed notification of a short-term layoff, nor do they have to provide a factor for the lay-off. (They may, however, be needed to do these things under a cumulative arrangement or an employment contract.)

Under the ESA, a “short-lived 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 period of 20 successive weeks, but less than 35 weeks of layoff in any period of 52 successive weeks, where:- the staff member continues to get considerable payments from the employer;
or

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

– the worker receives supplementary welfare;
or

– the worker would be entitled to receive additional unemployment advantages however isn’t getting them because they are used somewhere else;
or

– the employer recalls the employee to work within the time frame authorized by the Director of Employment Standards;
or

– the company recalls the staff member within the time frame set out in a contract with a staff member who is not represented by a trade union;
or

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

If an employee is laid off for a duration longer than a short-lived layoff as set out above, the company is thought about 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, a company can end the work of a staff member who has actually been used constantly for three months or more if either:

– the company has actually given the staff member appropriate written notification of termination and the notification duration has actually expired

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

Written notification of termination

An employee is entitled to observe of termination (or termination pay instead of notification) if they have been continually utilized for at least 3 months. An individual is thought about “utilized” not only while they are actively working, but likewise during at any time in which they are not working but the work relationship still exists (for example, time in which the employee is off ill or on leave or on lay-off).

The amount of notice to which a worker is entitled depends upon their “period of employment“. A staff member’s duration of work consists of not just perpetuity while the staff member is actively working but also whenever 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-term lay-off, the worker’s employment is considered (or considered) to have been ended on the first day of the lay-off-any time after that does not count as part of the worker’s duration of work, despite the fact that the worker might still be utilized for purposes of the “continually utilized for three months” qualification

– if 2 different periods of work are separated by more than 13 weeks, just the most recent period counts for functions of notification of termination

It is possible, in some scenarios, for a person to have been “continuously employed” for 3 months or more and yet have a duration of work of less than three months. In such scenarios, the staff member would be entitled to notice because a worker who has actually been continually employed for at least 3 months is entitled to observe, and the minimum notification privilege of one week applies to an employee with a period of employment of any length less than one year.

The following chart defines the quantity of notice required:

Note: Special rules determine the amount of notification needed when it comes to mass terminations – where the employment of 50 or more workers is ended at an employer’s facility within a four-week duration.

Requirements during the statutory notice duration

During the statutory notice period, an employer needs to:

– not reduce the worker’s wage rate or change any other term or condition of employment;

– continue to make whatever contributions would be required to preserve the staff member’s advantages strategies; and

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

Regular rate

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

Regular earnings

These are earnings besides overtime pay, holiday pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and discontinuance wage and specific contractual entitlements.

Regular work week

For a worker who normally works the very same variety of hours each week, a routine work week is a week of that numerous hours, not consisting of overtime hours.

Some workers do not have a routine work week. That is, they do not work the same variety of hours weekly or they are paid on a basis besides time. For these staff members, the “regular wages” for a “routine work week” is the typical quantity of the regular incomes made by the employee in the weeks in which the employee worked during the duration of 12 weeks right away preceding the date the notice was provided.

A company is not allowed to set up an employee’s vacation time throughout the statutory notification period unless the employee-after receiving composed notice of termination of employment-agrees to take their getaway time throughout the notification period.

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

How to supply written notification

For the most part, written notification of termination of employment must be resolved to the staff member. It can be provided in person or by mail, fax or email, as long as shipment can be verified.

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

Because case, the employer needs to publish a notification in the office (where it will be seen by the workers) setting out the names, seniority and job classification of those workers the employer means to terminate and the date of the proposed termination. The posting of the notice is thought about to be notification of termination, since the date of the publishing, to a staff member who is “bumped” by a staff member named in the notification. However, this notification of termination should still fulfill the length requirements set out in the ESA.

There are likewise special guidelines regarding how notice is supplied when there is a mass termination.

Termination pay

A staff member who does not receive the composed notice needed under the ESA must be given termination pay in lieu of notification. Termination pay is a lump amount payment equal to the routine earnings for a regular work week that an employee would otherwise have actually been entitled to during the composed notice period. An employee earns vacation pay on their termination pay. Employers should also continue to make whatever contributions would be required to maintain the advantages the worker would have been entitled to had they continued to be employed through the notification period.

Example: Regular work week

Sarah has worked for 3 and a half years. Now her job has actually been removed and her work has been terminated. Sarah was not given any composed notification of termination.

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

Sarah’s routine wages for a routine work week are computed:

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

Her termination pay is computed:

$ 800.00 X 3 weeks = $2,400.00

Then her getaway pay on her termination pay is computed:

4% of $2,400.00 = $96.00

Finally, her vacation pay is to her termination pay:

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The company should likewise guarantee ongoing protection for any advantage or pension that applied to her for three weeks.

Example: No routine work week

Gerry has actually worked at a nursing home for 4 years. He works weekly, but his hours vary from week to week. His rate of pay is $25.00 an hour, and he is paid 6 per cent holiday pay.

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

Gerry is entitled to four weeks of termination pay.

Gerry’s typical earnings per week are calculated:

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

His termination pay is determined:

$ 180.00 × 4 weeks = $720.00

Then his holiday pay on his termination pay is calculated:

6% of $720.00 = $43.20

Finally, his getaway pay is contributed to his termination pay:

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company should also make sure continued protection for any benefit or pension that used to him for 4 weeks.

When to pay termination pay

Termination pay need to be paid to an employee either 7 days after the worker’s work is ended or on the employee’s next routine pay date, whichever is later on.

Mass termination

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

Meaning of “establishment”

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

– they lie within the very same town, or

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

Effective October 26, 2023, in cases of mass termination, the term “facility” includes a staff member’s home, however just if the employee works from home and does not work at any other place where the company carries on service.

This will require that employees who work solely remotely be considered for inclusion in the count when figuring out whether 50 or more staff members have actually been ended.

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

Example: where several areas are considered one “facility”

ABC Company has an office and a storage facility situated in London, ON. Sabrina lives in London and works for ABC Company solely from another location: she carries out work for the business from home and does not work at the workplace.

For the purpose of mass termination, the company’s London workplace, London warehouse and Sabrina’s London home are considered one “facility.”

Employer obligations in a mass termination

When a mass termination occurs, the employer needs to finish and provide 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.

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

– mail delivery to the Director’s workplace, if the delivery can be validated.

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

Any notification to the impacted employees is not considered to have actually been offered till the Form 1 is received by the Director; in other words, notice of mass termination is not reliable up until the Director receives the Form 1.

In addition to providing staff members with specific 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 pertain to the attention of the affected employees.

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

The amount of notification employees should get in a mass termination is not based on the staff members’ length of work, but on the number of staff members who have actually been ended. An employer should provide:

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

– 12 weeks see if the work of 200 to 499 employees is to be terminated

– 16 weeks observe if the employment of 500 or more staff members is to be ended

Exception to the mass termination rules

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

– the variety of staff members whose work is being terminated represents not more than 10 percent of the workers who have actually been employed for a minimum of three months at the establishment

– none of the terminations are brought on by the long-term discontinuance of all or part of the company’s business at the facility

Mass termination: resignation by a staff member

An employee who has received termination notification under the mass termination guidelines who desires to resign before the termination date provided in the company’s notice must give the employer at least one week’s composed notification of resignation if the staff member has actually been used for less than two years. If the employment period has been two years or more, the worker must give a minimum of 2 weeks’ written notice of resignation. However, the staff member does not have to give notification of resignation if the company constructively dismisses the staff member or breaches a regard to the contract.

Temporary work after termination date in notification

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

If a worker works beyond the 13-week duration after the termination date and after that has their work ended, the staff member will be entitled to a new composed notification of termination as if the previous notification had actually never ever been offered. The employee’s duration of work will then also include the period of temporary work.

Recall rights

A “recall right” is the right of a worker on a layoff to be called back to work by their employer under a term or condition of work. This right is frequently discovered in cumulative agreements.

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

– keep their recall rights and not be paid termination pay (or discontinuance wage, if they were entitled to severance pay) 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 need to make the exact same option for both.

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

If a staff member who is represented by a trade union elects to keep their recall rights or stops working to decide, the employer and the trade union should attempt to come to a plan to hold the termination pay (and severance pay, if any) in trust for the staff member. If they can not pertain to an arrangement, and the trade union advises the company and the Director of Employment Standards in composing that efforts have actually failed, the company needs to send out the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the money in trust.

If a worker selects to provide up their recall rights or if the recall rights expire, the cash that is held in trust must be sent out to the worker.

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

Exemptions to discover of termination or termination pay

Much of these exemptions are complex. Please call the Employment Standards Information Centre, 1-800-531-5551, if you require more details. Please likewise refer to the unique guideline tool.

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

– is guilty of wilful misbehavior, disobedience or wilful disregard of responsibility that is not unimportant and has actually not been excused by the company. Note: “wilful” includes when a staff member planned the resulting effect or acted recklessly if they knew or must have known the results their conduct would have. Poor work conduct that is unintentional or unintended is normally not considered wilful;

– was hired for a particular length of time or till the completion of a specific task. However, such an employee will be entitled to see of termination or termination pay if:- the work ends before the term expires or the job is finished; or

– the term ends or the job is not finished more than 12 months after the employment started; or

– the work continues for three months or more after the term ends or the job is completed;

See also: Employment Standards Self-Service Tool

Wrongful dismissal

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

The rules under the ESA about termination and severance of work are minimum requirements. Some staff members might have rights under the common law that are higher than the rights to discover of termination (or termination pay) and discontinuance wage under the ESA. A worker may wish to sue their previous employer in court for “wrongful termination”. Employees must be mindful that they can not take legal action against a company for wrongful termination and sue for termination pay or severance pay with the ministry for the same termination or severance of work. A worker must select one or the other. Employees may want to acquire legal guidance worrying their rights.