Termination Of Employment

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

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

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

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

– lays a worker off for a duration that is longer than a “short-term layoff”.

In many cases, when a company ends the employment of a staff member who has actually been continually used for 3 months, the company must offer the employee with either composed notice of termination, termination pay or a mix (as long as the notice and the number of weeks of termination pay together equal the length of notice the employee is entitled to get).

The ESA does not require a company to provide a staff member a reason why their work is being terminated. There are, nevertheless, some circumstances where a company can not terminate an employee’s employment even if the employer is prepared to give correct written notice or termination pay. For example, an employer can not end somebody’s work, or punish them in any other way, if any part of the reason for the termination of employment is based upon the worker asking questions about the ESA or working out a right under the ESA, such as declining to work in excess of the daily 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 notification or pay in lieu

Certain employees are not entitled to see of termination or termination pay under the ESA. Examples include: job workers who are guilty of wilful misbehavior, disobedience, or wilful disregard of responsibility that is not insignificant and has not been condoned by the company. Other examples consist of building employees, employees on temporary layoff, job staff members who refuse an offer of reasonable alternative work and staff members who have actually been utilized less than three 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 also refer to the special rule tool.

The termination-of-employment guidelines are totally different from any entitlements a staff member may have to be paid severance pay under the ESA.

Constructive termination

A positive termination might happen when a company makes a significant modification to an essential term or condition of a staff member’s employment without the employee’s actual or implied consent.

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 income or a substantial unfavorable change in such things as the staff member’s work place, hours of work, authority, or position. Constructive termination might also include scenarios where an employer pesters or abuses a worker, or an employer gives a worker an ultimatum to “stop or be fired” and the staff member resigns in reaction.

The worker would have to resign in response to the modification within an affordable amount 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 hard topic. For more details on useful termination, please call the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

An employee is on temporary layoff when an employer cuts down or stops the staff member’s work without ending their work (for instance, laying somebody off at times when there is insufficient work to do). The simple truth that the employer does not define a recall date when laying the worker off does not always mean that the lay-off is not short-term. Note, however, that a lay-off, even if intended to be short-term, may lead to constructive dismissal if it is not enabled by the employment agreement.

For the purposes of the termination arrangements of the ESA, job a “week of layoff” is a week in which the employee earned less than half of what they would generally make (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 worker was unable or available to work, went through disciplinary suspension, or was not offered with work due to the fact that of a strike or lockout at their location of employment or in other places.

Employers are not required under the ESA to offer workers with a written notification of a short-term layoff, nor do they need to offer a factor for the lay-off. (They may, however, be required to do these things under a collective contract 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 successive weeks;
or

2. more than 13 weeks in any duration of 20 consecutive weeks, but less than 35 weeks of layoff in any duration of 52 successive weeks, where:- the staff member continues to receive significant payments from the company;
or

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

– the employee receives supplementary joblessness benefits;
or

– the staff member would be entitled to receive supplemental welfare but isn’t receiving them since they are used in other places;
or

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

– the company remembers the worker within the time frame set out in an agreement 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 recalls a staff member who is represented by a trade union within the time set out in a contract in between the union and the company.

If an employee is laid off for a duration longer than a short-lived layoff as set out above, the employer is thought about to have actually ended the worker’s work. Generally, the staff member will then be entitled to termination pay.

Written notification of termination and termination pay

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

– the company has actually offered the staff member appropriate composed notification of termination and the notification duration has actually expired

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

Written notice of termination

An employee is entitled to observe of termination (or termination pay instead of notification) if they have actually been constantly used for a minimum of 3 months. An individual is considered “utilized” not only while they are actively working, however also during at any time in which they are not working however the work relationship still exists (for instance, time in which the worker is off sick or on leave or on lay-off).

The amount of notification to which a staff member is entitled depends on their “period of work”. A worker’s period of employment includes not only all time while the staff member is actively working however also whenever that they are not working however the employment relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a short-lived lay-off, the staff member’s work is deemed (or considered) to have actually been on the very first day of the lay-off-any time after that does not count as part of the worker’s duration of work, even though the worker may still be utilized for purposes of the “continually employed for three months” qualification

– if 2 separate periods of work are separated by more than 13 weeks, only the most recent duration counts for functions of notice of termination

It is possible, in some scenarios, for a person to have actually been “constantly utilized” for 3 months or more and yet have a duration of employment of less than 3 months. In such circumstances, the worker would be entitled to see because an employee who has actually been constantly used for a minimum of 3 months is entitled to observe, and the minimum notification privilege of one week applies to a worker with a duration of work of any length less than one year.

The following chart specifies the quantity of notification needed:

Note: Special rules determine the quantity of notice required in the case of mass terminations – where the employment of 50 or job more staff members is terminated at an employer’s facility within a four-week period.

Requirements throughout the statutory notification duration

During the statutory notice duration, a company needs to:

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

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

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

Regular rate

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

Regular earnings

These are incomes other than overtime pay, trip pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and discontinuance wage and specific legal entitlements.

Regular work week

For an employee who generally works the same number of hours weekly, a regular work week is a week of that numerous hours, not consisting of overtime hours.

Some staff members do not have a regular work week. That is, they do not work the exact same number of hours each week or they are paid on a basis other than time. For these workers, the “routine earnings” for a “regular work week” is the average amount of the regular earnings made by the staff member in the weeks in which the worker worked throughout the period of 12 weeks immediately preceding the date the notice was offered.

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

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

How to offer written notification

In many cases, written notice of termination of work must be addressed to the worker. It can be supplied face to face or by mail, fax or e-mail, as long as shipment can be validated.

There are special guidelines for offering notification of termination if a worker has a contract of employment or a collective contract that provides seniority rights that enable a worker who is to be laid off or whose employment is to be terminated to displace (” bump”) other employees.

In that case, the employer needs to publish a notification in the workplace (where it will be seen by the workers) setting out the names, seniority and task classification of those employees the company means to end and the date of the proposed termination. The publishing of the notification is thought about to be notification of termination, since the date of the publishing, to an employee who is “bumped” by an employee called in the notice. However, this notice of termination should still fulfill the length requirements set out in the ESA.

There are likewise special rules regarding how notification is offered when there is a mass termination.

Termination pay

A worker who does not receive the written notice required under the ESA should be given termination pay in lieu of notification. Termination pay is a lump sum payment equivalent to the routine earnings for a regular work week that a staff member would otherwise have actually been entitled to during the written notification duration. An employee makes holiday pay on their termination pay. Employers must also continue to make whatever contributions would be required to preserve 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 worked for three and a half years. Now her task has been gotten rid of and her employment has been ended. Sarah was not provided any composed notice of termination.

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

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

$ 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 holiday pay on her termination pay is computed:

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 also guarantee continued protection for any advantage or pension plans that used to her for 3 weeks.

Example: No regular work week

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

Gerry’s employer eliminated his position and did not offer 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 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 incomes per week are calculated:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off sick for 2 weeks for that reason these weeks are not included in the estimation of average revenues) = $180.00 a week

His termination pay is determined:

$ 180.00 × 4 weeks = $720.00

Then his vacation pay on his termination pay is computed:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer needs to likewise guarantee continued protection for any advantage or pension that applied to him for four weeks.

When to pay termination pay

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

Mass termination

Special rules for notice of termination might use in cases of mass termination (when an employer is ending 50 or more employees at its establishment within a four-week period).

Meaning of “facility”

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

– they are situated within the exact same municipality, or

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

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

This will require that workers who work solely from another location be considered for addition in the count when determining whether 50 or more staff members have been terminated.

Note that where a staff member carries out work both from their home and from another place where the company continues company (for instance, an office), their home is not consisted of in the meaning of “establishment”. Instead, the staff member is thought about to have a connection to the workplace area and, for that reason, for the function of mass termination, the employee is included with regard to that workplace place.

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

ABC Company has a workplace and a storage facility situated in London, ON. Sabrina lives in London and works for ABC Company solely remotely: she performs work for the business from home and does not operate at the workplace.

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

Employer obligations in a mass termination

When a mass termination happens, the company 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 delivery to the Director’s workplace on a day and at a time when it is open.

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

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

Any notification to the impacted workers is not considered to have actually been provided until the Form 1 is gotten by the Director; in other words, notification of mass termination is not effective up until the Director gets the Form 1.

In addition to supplying employees with private notifications of termination, the employer must, on the 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 impacted workers.

– supply a copy of the Form 1 to each impacted employee.

The amount of notice workers must receive in a mass termination is not based upon the workers’ length of work, however on the number of staff members who have actually been terminated. An employer must give:

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

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

– 16 weeks discover if the employment of 500 or more workers is to be ended

Exception to the mass termination rules

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

– the number of employees whose employment is being ended represents not more than 10 percent of the employees who have been used for at least 3 months at the establishment

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

Mass termination: resignation by an employee

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

Temporary work after termination date in notice

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

If a worker works beyond the 13-week period after the termination date and then has their employment terminated, the worker will be entitled to a brand-new composed notification of termination as if the previous notification had never been provided. The staff member’s duration of employment will then also consist of the period of temporary work.

Recall rights

A “recall right” is the right of a staff member on a layoff to be recalled to work by their employer under a term or condition of work. This right is typically found in collective agreements.

A staff member who has recall rights and who is entitled to termination pay due to the fact that 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

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

If a staff member is entitled to both termination pay and severance pay, they need to make the exact same option for both.

If a staff member who is not represented by a trade union elects to keep their recall rights or fails to decide, the employer should send the amount of the termination pay (and severance pay, 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 chooses to keep their recall rights or stops working to choose, the employer and the trade union must try to come to an arrangement to hold the termination pay (and severance pay, if any) in trust for the staff member. If they can not come to an arrangement, and the trade union recommends the company and the Director of Employment Standards in writing that efforts have failed, the company needs to send the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If a worker chooses to give up their recall rights or if the recall rights expire, the cash that is kept in trust should be sent out to the employee.

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

Exemptions to notice of termination or termination pay

A lot of these exemptions are complicated. Please call the Employment Standards Information Centre, 1-800-531-5551, if you require more details. Please also describe the special 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 duty that is not minor and has actually not been excused by the company. Note: “wilful” includes when an employee planned the resulting effect or acted recklessly if they understood or must have understood the results their conduct would have. Poor work conduct that is unintentional or unintentional is typically not considered wilful;

– was employed for a specific length of time or till the conclusion of a specific job. However, such an employee will be entitled to discover of termination or termination pay if:- the employment ends before the term expires or the task is completed; or

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

– the employment continues for three months or more after the term ends or the job is finished;

See likewise: Employment Standards Self-Service Tool

Wrongful termination

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

The rules under the ESA about termination and severance of employment are minimum requirements. Some employees may have rights under the common law that are higher than the rights to discover of termination (or termination pay) and severance pay under the ESA. A staff member may desire to sue their former employer in court for “wrongful dismissal”. Employees should be conscious that they can not take legal action against an employer for job 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 should choose one or the other. Employees might want to get legal guidance worrying their rights.