Termination Of Employment

A variety of expressions are typically used to explain circumstances when work is ended. These consist of “let go,” “discharged,” “dismissed,” “fired” and “permanently laid off.”

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

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

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

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

For the most part, when an employer ends the employment of a staff member who has actually been continually utilized for 3 months, the company should provide the employee with either composed notification 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 get).

The ESA does not require a company to provide a staff member a reason their employment is being terminated. There are, nevertheless, some scenarios where an employer can not terminate an employee’s employment even if the company is prepared to offer appropriate written notice or termination pay. For example, an employer can not end someone’s employment, or punish them in any other way, if any part of the factor for the termination of work is based on the worker asking concerns about the ESA or exercising a right under the ESA, such as declining to work in excess of the day-to-day or weekly hours of work optimums, or taking a leave of absence specified in the ESA. Please see the chapter on reprisals.

Getting approved for termination notification or pay in lieu

Certain staff members are not entitled to see of termination or termination pay under the ESA. Examples consist of: workers who are guilty of wilful misconduct, disobedience, or wilful disregard of responsibility that is not unimportant and has not been excused by the company. Other examples include construction workers, employees on temporary layoff, employees who decline a deal of affordable alternative work and workers who have actually been used less than 3 months.

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

The termination-of-employment rules are entirely separate from any privileges an employee may need to be paid severance pay under the ESA.

Constructive dismissal

A useful termination might occur when a company makes a considerable change to a fundamental term or condition of an employee’s employment without the employee’s actual or implied consent.

For example, a staff member might be constructively dismissed if the company makes changes to the staff member’s terms and conditions of work that result in a significant decrease in income or a considerable negative change in such things as the worker’s work area, hours of work, authority, or position. Constructive dismissal may also consist of scenarios where an employer pesters or abuses an employee, or an employer provides an employee a final notice to “give up or be fired” and the worker resigns in response.

The staff member would need to resign in response to the modification within a sensible duration of time in order for the company’s actions to be considered a termination of work for purposes of the ESA.

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

Temporary layoff

An employee is on short-term layoff when a company cuts down or stops the staff member’s work without ending their employment (for instance, laying someone off at times when there is insufficient work to do). The mere truth that the company does not specify a recall date when laying the employee off does not always mean that the lay-off is not temporary. Note, nevertheless, that a lay-off, even if intended to be short-term, might lead to useful termination if it is not enabled by the work agreement.

For the functions of the termination arrangements of the ESA, a “week of layoff” is a week in which the employee made less than half of what they would ordinarily make (or earns on average) in a week.

A week of layoff does not consist of any week in which the employee did not work for one or more days due to the fact that the staff member was unable or offered to work, underwent disciplinary suspension, or was not supplied with work since of a strike or lockout at their place of work or in other places.

Employers are not needed under the ESA to supply workers with a composed notification of a temporary layoff, nor do they need to supply a reason for the lay-off. (They may, however, be required to do these things under a cumulative 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 consecutive weeks;
or

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

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

– the employee gets extra unemployment advantages;
or

– the worker would be entitled to receive extra welfare but isn’t receiving them because they are used in other places;
or

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

– the employer recalls 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 explained in ‘B’ where the employer remembers a staff member who is represented by a trade union within the time set out in an arrangement in between the union and the employer.

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

Written notification of termination and termination pay

Under the ESA, a company can terminate the work of an employee who has been employed continually for 3 months or more if either:

– the company has offered the worker correct written notice of termination and the notice duration has actually expired

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

Written notification of termination

A worker is entitled to see of termination (or termination pay instead of notification) if they have actually been continuously employed for at least 3 months. An individual is thought about “used” not only while they are actively working, however also throughout any time in which they are not working however the work relationship still exists (for instance, time in which the employee is off ill or on leave or on lay-off).

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

– if a lay-off goes on longer than a temporary lay-off, the staff member’s work is deemed (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 period of employment, despite the fact that the staff member may still be utilized for functions of the “constantly used for 3 months” credentials

– if two separate periods of employment are separated by more than 13 weeks, just the most recent period counts for purposes of notification of termination

It is possible, in some scenarios, for a person to have been “constantly utilized” for three months or more and yet have a duration of employment of less than 3 months. In such scenarios, the employee would be entitled to discover because a worker who has actually been constantly used for at least 3 months is entitled to observe, and the minimum notice privilege of one week uses to a worker with a period of employment of any length less than one year.

The following chart defines the quantity of notification needed:

Note: Special guidelines figure out the quantity of notification needed in the case of mass terminations – where the employment of 50 or more staff members is terminated at a company’s establishment within a four-week period.

Requirements during the statutory notification duration

During the statutory notification period, an employer must:

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

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

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

Regular rate

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

Regular incomes

These are incomes aside from overtime pay, holiday pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and discontinuance wage and certain legal privileges.

Regular work week

For a staff member who generally works the same number of hours every week, a regular work week is a week of that numerous hours, not including overtime hours.

Some employees do not have a regular work week. That is, they do not work the exact same variety of hours weekly or they are paid on a basis other than time. For these employees, the “routine incomes” for a “regular work week” is the average amount of the regular salaries earned by the worker in the weeks in which the staff member worked throughout the period of 12 weeks right away preceding the date the notification was given.

A company is not allowed to schedule a worker’s holiday time during the statutory notice duration unless the employee-after receiving written notice of termination of employment-agrees to take their vacation time during the notice period.

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

How to supply written notice

In many cases, composed notification of termination of employment must be addressed to the staff member. It can be offered face to face or by mail, fax or e-mail, as long as shipment can be verified.

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

Because case, the company needs to post a notice in the workplace (where it will be seen by the employees) setting out the names, seniority and task category of those staff members the company intends to terminate and the date of the proposed termination. The posting of the notice is thought about to be notification of termination, as of the date of the posting, to an employee who is “bumped” by a staff member named in the notification. However, this notification of termination should still satisfy the length requirements set out in the ESA.

There are also unique rules relating to how notification is offered when there is a mass termination.

Termination pay

A worker who does not get the written notice required under the ESA should be offered termination pay in lieu of notification. Termination pay is a swelling amount payment equivalent to the routine wages for a routine work week that a worker would otherwise have actually been entitled to throughout the written notice duration. An employee earns holiday pay on their termination pay. Employers should likewise continue to make whatever contributions would be required to maintain the benefits the employee would have been entitled to had they continued to be used through the notice period.

Example: Regular work week

Sarah has worked for three and a half years. Now her job has actually been removed and her employment has been ended. Sarah was not provided any written notification of termination.

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

Sarah’s regular incomes for a regular work week are calculated:

$ 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 getaway 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 needs to also guarantee ongoing coverage for any benefit or pension that used to her for employment 3 weeks.

Example: No regular work week

Gerry has actually operated at an assisted living home for 4 years. He works weekly, however his hours vary from week to week. His rate of pay is $25.00 an hour, and he is paid 6 percent holiday pay.

Gerry’s company eliminated his position and did not provide Gerry any composed notice of termination. Gerry was ill and off work for two of the 12 weeks immediately 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 four weeks of termination pay.

Gerry’s typical profits per week are calculated:

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

His termination pay is computed:

$ 180.00 × 4 weeks = $720.00

Then his trip 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 should likewise make sure continued protection for any advantage or pension plans that used to him for 4 weeks.

When to pay termination pay

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

Mass termination

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

Meaning of “establishment”

An “facility” is an area at which the company brings on business. Separate locations can be thought about one facility if either:

– they lie within the very same municipality, or

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

Effective October 26, 2023, in cases of mass termination, the term “establishment” includes a worker’s home, but just if the staff member works from home and does not work at any other area where the employer carries on business.

This will require that staff members who work specifically remotely be thought about for inclusion in the count when identifying whether 50 or more employees have been terminated.

Note that where a worker performs work both from their home and from another place where the employer brings on company (for instance, an office), their home is not consisted of in the meaning of “establishment”. Instead, the employee is considered to have a connection to the workplace area and, therefore, for the function of mass termination, the employee is included with respect to that workplace area.

Example: where several locations are considered one “facility”

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

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

Employer obligations in a mass termination

When a mass termination occurs, the employer should 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.

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

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

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

Any notification to the affected employees is not considered to have been provided up until the Form 1 is received by the Director; to put it simply, notice of mass termination is ineffective up until the Director receives the Form 1.

In addition to supplying workers with private notifications of termination, the employer must, employment on the very first day of the notice duration:

– publish a copy of the Form 1 provided to the Director in the office where it will pertain to the attention of the impacted workers.

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

The quantity of notice staff members need to get in a mass termination is not based on the employees’ length of employment, however on the number of staff members who have been terminated. A company should offer:

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

– 12 weeks notice if the employment of 200 to 499 employees is to be terminated

– 16 weeks see if the employment of 500 or more employees is to be ended

Exception to the mass termination guidelines

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

– the number of workers whose employment is being ended represents not more than 10 percent of the staff members who have actually been used for at least three months at the facility

– none of the terminations are triggered by the long-term discontinuance of all or part of the employer’s company at the facility

Mass termination: resignation by a worker

A staff member who has actually received termination notice under the mass termination rules who desires to resign before the termination date offered in the employer’s notification should give the company a minimum of one week’s composed notification of resignation if the staff member has been used for less than two years. If the work period has actually been two years or more, the employee needs to offer a minimum of two weeks’ composed notice of resignation. However, the worker does not need to offer notice of resignation if the employer constructively dismisses the staff member or breaches a regard to the contract.

Temporary work after termination date in notification

An employer can provide work to a staff member who has actually been notified of termination on a momentary 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 needed to offer any more 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 ended, the staff member will be entitled to a brand-new composed notification of termination as if the previous notification had never been given. The worker’s period of employment will then likewise consist of the duration of short-term work.

Recall rights

A “recall right” is the right of an employee on a layoff to be called back 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 since of a layoff of 35 weeks or more might select 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

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

If a staff member is entitled to both termination pay and discontinuance wage, they must make the same choice for both.

If a staff member who is not represented by a trade to keep their recall rights or stops working to decide, the company must send out 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 elects to keep their recall rights or stops working to choose, the company 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 worker. If they can not concern a plan, and the trade union recommends the company and the Director of Employment Standards in composing that efforts have stopped working, the company should send out the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.

If a worker selects to quit their recall rights or if the recall rights end, the money that is kept in trust must be sent to the staff member.

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

Exemptions to see of termination or termination pay

Much of these exemptions are complicated. Please call the Employment Standards Information Centre, 1-800-531-5551, if you require more info. Please likewise describe the special rule tool.

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

– is guilty of wilful misbehavior, disobedience or wilful disregard of responsibility that is not trivial and has not been excused by the company. Note: “wilful” consists of when a worker intended the resulting repercussion or acted recklessly if they knew or must have known the effects their conduct would have. Poor work conduct that is unexpected or unintentional is typically not thought about wilful;

– was worked with for a particular length of time or up until the completion of a specific job. However, such a staff member 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 work started; or

– the work 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 notification of termination, termination pay, severance pay

The guidelines under the ESA about termination and severance of employment are minimum requirements. Some staff members might have rights under the common law that are higher than the rights to see of termination (or termination pay) and severance pay under the ESA. An employee might wish to sue their previous company in court for “wrongful dismissal”. Employees must be aware that they can not sue a company for wrongful dismissal and file a claim for termination pay or discontinuance wage with the ministry for the exact same termination or severance of employment. A staff member should select one or the other. Employees might want to acquire legal advice concerning their rights.