Termination Of Employment

A number of expressions are frequently utilized to describe circumstances when work is ended. These consist of “let go,” “released,” “dismissed,” “fired” and “permanently laid off.”

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

– 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 an employee and the employee resigns, in reaction, within a sensible time;

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

In a lot of cases, when a company ends the employment of a staff member who has actually been continually employed for three months, the company needs to offer the worker with either written notice of termination, termination pay or a combination (as long as the notice and the variety of weeks of termination pay together equivalent the length of notice the worker is entitled to receive).

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

Certain employees are not entitled to discover of termination or termination pay under the ESA. Examples consist of: workers who are guilty of wilful misconduct, disobedience, or wilful overlook of duty that is not trivial and has actually not been condoned by the employer. Other examples include construction employees, staff members on short-term layoff, staff members who decline an offer of affordable alternative employment and employees who have been utilized less than three 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 also describe the unique rule tool.

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

Constructive termination

A constructive termination might take place when an employer makes a considerable change to a fundamental term or condition of a worker’s employment without the worker’s real or implied permission.

For example, a staff member may be constructively dismissed if the employer makes modifications to the staff member’s terms of work that lead to a substantial reduction in income or a significant unfavorable change in such things as the staff member’s work place, hours of work, authority, or position. Constructive termination might also consist of scenarios where an employer bothers or abuses a staff member, or a company provides an employee a warning to “quit or be fired” and the worker resigns in reaction.

The employee would need to resign in reaction to the change within a reasonable time period in order for the employer’s actions to be thought about a termination of work for functions of the ESA.

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

Temporary layoff

A worker is on short-lived layoff when an employer cuts back or stops the worker’s work without ending their work (for example, laying someone off at times when there is inadequate work to do). The simple reality that the company does not specify a recall date when laying the worker off does not always indicate that the lay-off is not momentary. Note, nevertheless, that a lay-off, even if intended to be short-lived, may lead to constructive dismissal if it is not enabled by the work agreement.

For the purposes of the termination provisions of the ESA, a “week of layoff” is a week in which the worker 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 employee did not work for one or more days since the staff member was unable or readily 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 in other places.

Employers are not needed under the ESA to provide employees with a composed notice of a momentary layoff, nor do they have to supply a reason for the lay-off. (They may, nevertheless, be needed 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 period 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 consecutive weeks, where:- the worker continues to get significant payments from the company;
or

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

– the worker gets additional unemployment benefits;
or

– the staff member would be entitled to receive supplementary welfare however isn’t receiving them because they are used in other places;
or

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

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

Written notice of termination and termination pay

Under the ESA, an employer can end the employment of a staff member who has been employed continually for three months or more if either:

– the employer has actually provided the worker appropriate composed notification of termination and the notification duration has actually ended

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

Written notification of termination

A worker is entitled to observe of termination (or termination pay instead of notification) if they have been continuously employed for a minimum of three months. An individual is thought about “used” not only while they are actively working, however also during at any time in which they are not working but the work relationship still exists (for instance, time in which the staff member is off ill or on leave or on lay-off).

The quantity of notification to which a worker is entitled depends upon their “duration of work”. A worker’s duration of work includes not only perpetuity while the employee is actively working however also at any time 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 employment is deemed (or thought about) to have been ended on the first day of the lay-off-any time after that does not count as part of the staff member’s period of work, even though the worker might still be employed for purposes of the “constantly used for three months” qualification

– if 2 different durations of employment are separated by more than 13 weeks, only the most recent period counts for functions of notice of termination

It is possible, in some scenarios, for an individual to have been “continually utilized” for three months or more and yet have a duration of work of less than three months. In such circumstances, the worker would be entitled to notice since an employee who has actually been continuously used for a minimum of three months is entitled to see, and the minimum notification privilege of one week uses to a worker with a duration of employment of any length less than one year.

The following chart defines the amount of notice needed:

Note: Special rules identify the amount of notification needed in the case of mass terminations – where the employment of 50 or more employees is terminated at an employer’s facility within a four-week period.

Requirements during the statutory notice duration

During the statutory notification period, an employer should:

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

– continue to make whatever contributions would be needed to keep the staff member’s benefits strategies; and

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

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 wages

These are wages aside from overtime pay, trip pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of task pay, termination pay and severance pay and specific legal privileges.

Regular work week

For an employee who normally works the same number of hours every week, a regular work week is a week of that lots of hours, not consisting of overtime hours.

Some workers do not have a regular work week. That is, they do not work the exact same number of hours weekly or they are paid on a basis aside from time. For these workers, the “regular earnings” for a “routine work week” is the typical quantity of the regular wages made by the staff member in the weeks in which the employee worked during the period of 12 weeks immediately preceding the date the notification was offered.

An employer is not permitted to arrange an employee’s holiday time throughout the statutory notice duration unless the employee-after receiving composed notification of termination of employment-agrees to take their vacation time throughout the notice duration.

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

How to offer written notice

Most of the times, composed notice of termination of work must be addressed to the employee. It can be supplied face to face or by mail, fax or email, as long as shipment can be confirmed.

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

Because case, the employer must publish a notice in the office (where it will be seen by the staff members) setting out the names, seniority and task classification of those employees the employer intends to terminate and the date of the proposed termination. The publishing 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 worker named in the notification. However, this notification of termination need to still fulfill the length requirements set out in the ESA.

There are likewise unique guidelines concerning how notice is offered when there is a mass termination.

Termination pay

A worker who does not receive the composed notification required under the ESA must be given termination pay in lieu of notice. Termination pay is a lump amount payment equivalent to the regular incomes for a routine work week that a worker would otherwise have been entitled to throughout the written notification duration. A worker earns holiday pay on their termination pay. Employers should likewise continue to make whatever contributions would be needed to maintain the advantages the staff member would have been entitled to had they continued to be used through the notification period.

Example: Regular work week

Sarah has worked for three and a half years. Now her job has been eliminated and her work has actually been terminated. Sarah was not offered 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 holiday pay. Because she worked for more than 3 years but less than 4 years, she is entitled to 3 weeks’ pay in lieu of notice.

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

$ 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 calculated:

4% of $2,400.00 = $96.00

Finally, her vacation pay is included to her termination pay:

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The employer should also make sure ongoing protection for any benefit or pension that used to her for 3 weeks.

Example: No routine work week

Gerry has operated at a nursing home for four years. He works every week, 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 provide 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 ended. Gerry made $1,800.00 in the 12 weeks before the day on which his employment ended.

Gerry is entitled to 4 weeks of termination pay.

Gerry’s typical earnings weekly are determined:

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

His termination pay is computed:

$ 180.00 × 4 weeks = $720.00

Then his trip 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 employer needs to likewise make sure ongoing coverage for any advantage or pension strategies that applied to him for four 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 worker’s next regular pay date, whichever is later.

Mass termination

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

Meaning of “establishment”

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

– they are located within the very same municipality, or

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

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

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

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

Example: where several areas are considered one “facility”

ABC Company has a workplace and a warehouse situated in London, ON. Sabrina resides in London and works for ABC Company exclusively remotely: she carries out work for the business from home and does not operate at the workplace.

For the function of mass termination, the business’s London office, London warehouse and Sabrina’s London home are considered one “facility.”

Employer obligations in a mass termination

When a mass termination occurs, the employer must 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.

– 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 shipment can be verified.

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

Any notice to the impacted employees is not considered 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 gets the Form 1.

In addition to providing staff members with specific notices of termination, the employer must, on the first day of the notice duration:

– post a copy of the Form 1 provided to the Director in the work environment where it will come to the attention of the affected staff members.

– provide a copy of the Form 1 to each affected employee.

The amount of notification staff members must receive in a mass termination is not based on the employees’ length of employment, however on the variety of staff members who have been ended. A company needs to give:

– 8 weeks observe if the employment of 50 to 199 workers is to be ended

– 12 weeks notice if the work of 200 to 499 staff members is to be terminated

– 16 weeks notice if the work 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 2 things apply:

– the number of staff members whose work is being terminated represents not more than 10 per cent of the staff members who have actually been utilized for at least 3 months at the establishment

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

Mass termination: resignation by a worker

An employee who has actually gotten termination notice under the mass termination guidelines who wants to resign before the termination date supplied in the employer’s notice should provide the employer a minimum of one week’s written notice of resignation if the employee has actually been utilized for less than two years. If the work duration has actually been two years or more, the employee should offer a minimum of two weeks’ composed notice of resignation. However, the employee does not need to offer notice of resignation if the employer constructively dismisses the worker or breaches a term of the contract.

Temporary work after termination date in notification

A company can provide work to a staff member who has been notified of termination on a short-term basis in the 13-week duration after the termination date set out in the notice without affecting the original date of the termination and without being needed to supply any more notification of termination to the worker when the short-lived work ends.

If a staff member works beyond the 13-week period after the termination date and after that has their employment terminated, the worker will be entitled to a brand-new composed notification of termination as if the previous notice had actually never been provided. The worker’s period of work will then likewise include the period of short-term work.

Recall rights

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

An employee who has recall rights and who is entitled to termination pay because of a layoff of 35 weeks or more may pick to:

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

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

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

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

If a staff member selects to provide up their recall rights or if the recall rights end, the cash that is held in trust needs to be sent to the employee.

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

Exemptions to notice of termination or termination pay

Many of these exemptions are intricate. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you require more information. Please also describe the unique guideline tool.

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

– is guilty of wilful misbehavior, disobedience or wilful disregard of duty that is not unimportant and has not been condoned by the company. Note: “wilful” includes when a worker intended the resulting effect or acted recklessly if they knew or ought to have understood the impacts their conduct would have. Poor work conduct that is unintentional or unintended is generally ruled out wilful;

– was hired for a specific length of time or until the completion of a particular job. However, such a staff member will be entitled to observe of termination or termination pay if:- the employment ends before the term ends or the job is completed; or

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

– the employment continues for three months or more after the term expires or the task is completed;

See also: Employment Standards Self-Service Tool

Wrongful termination

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

The rules under the ESA about termination and severance of work are minimum requirements. Some employees may have rights under the common law that are higher than the rights to see of termination (or termination pay) and discontinuance wage under the ESA. A worker might wish to sue their previous employer in court for “wrongful dismissal”. Employees ought to be mindful that they can not sue a company for wrongful termination and file a claim for termination pay or severance pay with the ministry for the same termination or severance of employment. An employee should choose one or the other. Employees might want to get legal suggestions concerning their rights.