Termination Of Employment

A variety of expressions are frequently 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) an individual’s work is terminated if the company:

– dismisses or stops utilizing an employee, including where an employee is no longer employed due to the bankruptcy or insolvency of the employer;

– “constructively” dismisses a worker and the employee resigns, in action, within a sensible time;

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

In many cases, when a company ends the work of a staff member who has actually been continuously employed for three months, the company needs to offer the employee with either written notice of termination, termination pay or a mix (as long as the notification and the variety of weeks of termination pay together equivalent the length of notice the worker is entitled to get).

The ESA does not require a company to offer a staff member a reason why their work is being terminated. There are, however, some scenarios where a company can not end a staff member’s work even if the employer is prepared to give appropriate composed notification or termination pay. For example, a company can not end somebody’s employment, or penalize them in any other way, if any part of the factor for the termination of employment is based upon the staff member asking questions about the ESA or exercising a right under the ESA, such as refusing to work in excess of the daily or weekly hours of work optimums, or taking a leave of absence defined in the ESA. Please see the chapter on reprisals.

Receiving termination notice or pay in lieu

Certain workers are not entitled to notice of termination or termination pay under the ESA. Examples include: workers who are guilty of wilful misconduct, disobedience, or wilful overlook of task that is not trivial and has actually not been condoned by the employer. Other examples include construction employees, workers on short-lived layoff, staff members who decline an offer of sensible alternative work and workers who have actually been utilized less than 3 months.

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

The termination-of-employment rules are totally different from any entitlements a worker might have to be paid severance pay under the ESA.

Constructive termination

A constructive termination might take place when an employer makes a considerable change to a basic term or condition of a staff member’s work without the employee’s actual or implied consent.

For instance, an employee may be constructively dismissed if the company makes modifications to the staff member’s conditions of employment that lead to a significant reduction in salary or a considerable negative change in such things as the employee’s work area, hours of work, authority, or position. Constructive termination may likewise include scenarios where an employer bugs or abuses a staff member, or a company provides an employee a final notice to “give up or be fired” and the employee resigns in action.

The staff member would have to resign in reaction to the modification within an affordable time period 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 subject. For more details on positive termination, please contact 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 employment (for instance, laying someone off sometimes when there is inadequate work to do). The simple fact that the employer does not define a recall date when laying the worker off does not necessarily imply that the lay-off is not temporary. Note, nevertheless, that a lay-off, even if meant to be temporary, might result in useful termination if it is not permitted by the work agreement.

For the functions of the termination arrangements of the ESA, a “week of layoff” is a week in which the worker earned less than half of what they would normally make (or makes usually) in a week.

A week of layoff does not include any week in which the employee did not work for one or more days because the staff member was not able or readily available to work, underwent disciplinary suspension, or was not supplied with work because of a strike or lockout at their place of employment or in other places.

Employers are not needed under the ESA to provide staff members with a composed notification of a temporary layoff, nor do they have to supply a factor for the lay-off. (They may, nevertheless, be needed to do these things under a cumulative arrangement or a work 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 duration of 20 successive weeks, however less than 35 weeks of layoff in any duration of 52 successive weeks, where:- the staff member continues to get considerable payments from the company;
or

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

– the employee receives additional unemployment advantages;
or

– the staff member would be entitled to receive additional welfare but isn’t receiving them because they are used somewhere else;
or

– the company remembers the worker 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 a contract 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 a worker who is represented by a trade union within the time set out in an arrangement between the union and the company.

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

Written notice of termination and termination pay

Under the ESA, an employer can end the employment of an employee who has been employed continually for employment 3 months or more if either:

– the company has given the employee correct composed notice of termination and the notification period has actually ended

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

Written notice of termination

A staff member is entitled to observe of termination (or termination pay rather of notice) if they have actually been constantly employed for at least three months. An individual is thought about “used” not only while they are actively working, however also during any time in which they are not working but the work relationship still exists (for example, time in which the worker 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 worker’s period of employment includes not only perpetuity while the employee is actively working but also any time that they are not working but the employment relationship still exists, with the following exceptions:

– if a goes on longer than a temporary lay-off, the staff member’s work is deemed (or considered) to have actually been ended on the very first day of the lay-off-any time after that does not count as part of the worker’s duration of employment, although the worker might still be utilized for functions of the “continually used for three months” credentials

– if 2 different periods of employment are separated by more than 13 weeks, only the most current period counts for purposes of notice of termination

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

The following chart defines the amount of notice needed:

Note: Special rules identify the quantity of notification required when it comes to mass terminations – where the employment 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 notice period, a company should:

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

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

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

Regular rate

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

Regular salaries

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

Regular work week

For a staff member who generally works the exact same variety of hours weekly, a routine 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 staff members, the “routine wages” for a “routine work week” is the typical quantity of the routine salaries earned by the worker in the weeks in which the worker worked throughout the period of 12 weeks right away preceding the date the notification was given.

A company is not permitted to schedule a staff member’s vacation time during the statutory notice duration unless the employee-after receiving written notification of termination of employment-agrees to take their trip time during the notification duration.

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

How to provide written notice

In many cases, written notification of termination of employment should be addressed to the employee. It can be supplied in person or by mail, fax or e-mail, as long as delivery can be validated.

There are special rules for providing notice of termination if a staff member has a contract of work or a collective agreement that offers seniority rights that allow an employee who is to be laid off or whose work is to be ended to displace (” bump”) other employees.

In that case, the company should publish a notice in the work environment (where it will be seen by the workers) setting out the names, seniority and job category of those workers the employer plans to end and the date of the proposed termination. The publishing of the notification is considered to be notification of termination, since the date of the publishing, to a staff member who is “bumped” by a staff member called in the notice. However, this notice of termination need to still meet the length requirements set out in the ESA.

There are also special rules relating to how notice is offered when there is a mass termination.

Termination pay

An employee who does not receive the composed notice needed under the ESA needs to be offered termination pay in lieu of notice. Termination pay is a lump sum payment equal to the regular salaries for a regular work week that a worker would otherwise have been entitled to during the written notice period. A staff member makes getaway pay on their termination pay. Employers must also continue to make whatever contributions would be required to preserve the advantages the worker would have been entitled to had they continued to be employed through the notice duration.

Example: Regular work week

Sarah has worked for three and a half years. Now her job has been gotten rid of and her work has actually been ended. Sarah was not offered any composed notification of termination.

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

Sarah’s routine 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 calculated:

$ 800.00 X 3 weeks = $2,400.00

Then her vacation pay on her termination pay is calculated:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

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

Example: No regular work week

Gerry has actually operated at a retirement 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 per cent getaway pay.

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

Gerry is entitled to four weeks of termination pay.

Gerry’s typical profits weekly are computed:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for two weeks for that reason these weeks are not included in the estimation of typical profits) = $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 trip pay is included to his termination pay:

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company should likewise ensure continued coverage for any benefit or pension that applied to him for 4 weeks.

When to pay termination pay

Termination pay must be paid to a staff member either 7 days after the worker’s work is terminated or on the employee’s next routine pay date, whichever is later.

Mass termination

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

Meaning of “establishment”

An “facility” is a location at which the employer continues company. Separate locations can be thought about one facility if either:

– they lie within the exact same municipality, or

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

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

This will need that staff members who work exclusively remotely be thought about for addition in the count when identifying whether 50 or more staff members have actually been terminated.

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

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

ABC Company has an office and a warehouse located in London, ON. Sabrina lives in London and works for ABC Company specifically from another location: she performs work for the business from home and does not operate at the office.

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

Employer responsibilities in a mass termination

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

– e-mail to esa_form1_notice@ontario.ca.

– fax to (416) 326-7061.

– personal delivery 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 shipment can be confirmed.

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

Any notification to the affected workers is ruled out to have actually been given until the Form 1 is gotten by the Director; in other words, notice of mass termination is ineffective up until the Director receives the Form 1.

In addition to supplying staff members with individual notifications of termination, the company must, on the very first day of the notice duration:

– publish a copy of the Form 1 offered to the Director in the work environment where it will concern the attention of the impacted workers.

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

The quantity of notice workers should receive in a mass termination is not based on the workers’ length of work, however on the number of staff members who have been ended. An employer needs to provide:

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

– 12 weeks observe if the employment of 200 to 499 workers is to be terminated

– 16 weeks notice if the employment of 500 or employment more workers is to be terminated

Exception to the mass termination rules

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

– the variety of staff members whose employment is being terminated represents not more than 10 percent of the staff members who have been utilized 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 employer’s company at the establishment

Mass termination: resignation by a staff member

A worker who has gotten termination notification under the mass termination guidelines who wishes to resign before the termination date provided in the company’s notification need to 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 actually been two years or more, the worker should give at least 2 weeks’ written notice of resignation. However, the worker does not have to notify of resignation if the company constructively dismisses the employee or breaches a term of the contract.

Temporary work after termination date in notification

An employer can offer work to a staff member who has been notified of termination on a short-term basis in the 13-week period after the termination date set out in the notification without affecting the initial date of the termination and without being needed to offer any more notification of termination to the employee when the short-term work ends.

If a worker works beyond the 13-week period after the termination date and then has their employment ended, employment the worker will be entitled to a brand-new written notice of termination as if the previous notification had never ever been given. The employee’s period of work will then also consist of the duration of short-lived work.

Recall rights

A “recall right” is the right of a worker on a layoff to be recalled to work by their company under a term or condition of work. This right is frequently found in cumulative contracts.

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

– keep their recall rights and not be paid termination pay (or severance pay, 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 discontinuance wage).

If a worker is entitled to both termination pay and discontinuance wage, they must make the exact same choice for employment 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 employer should send 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 staff member who is represented by a trade union chooses to keep their recall rights or stops working to make a choice, 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 worker. If they can not pertain to a plan, and the trade union advises the employer and the Director employment of Employment Standards in writing that efforts have failed, the employer needs to send 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 cash that is kept in trust needs to be sent to the employee.

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

Exemptions to see of termination or termination pay

Much of these exemptions are complicated. Please contact the Employment Standards Information Centre, 1-800-531-5551, if you require more information. Please likewise refer to the special rule tool.

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

– is guilty of wilful misbehavior, disobedience or wilful overlook of task that is not trivial and has not been excused by the employer. Note: “wilful” includes when an employee intended the resulting repercussion or acted recklessly if they knew or should have understood the impacts their conduct would have. Poor work conduct that is unintentional or unintentional is typically ruled out wilful;

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

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

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

See also: Employment Standards Self-Service Tool

Wrongful dismissal

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

The rules under the ESA about termination and severance of work are minimum requirements. Some staff members may have rights under the typical law that are higher than the rights to discover of termination (or termination pay) and discontinuance wage under the ESA. An employee might wish to sue their former company in court for “wrongful dismissal”. Employees need to understand that they can not take legal action against an employer 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. An employee must choose one or the other. Employees may wish to acquire legal advice concerning their rights.