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Termination Of Employment

A number of expressions are typically utilized to describe circumstances when employment is terminated. These include “release,” “released,” “dismissed,” “fired” and “permanently laid off.”

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

– dismisses or stops employing a worker, consisting of where an employee is no longer employed due to the personal bankruptcy or insolvency of the employer;

– “constructively” dismisses a staff member and the employee resigns, in action, within a sensible 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 worker who has been continually utilized for three months, the employer needs to provide the employee with either composed notification of termination, termination pay or a combination (as long as the notification and employment the number of weeks of termination pay together equivalent the length of notice the worker is entitled to get).

The ESA does not need a company to offer a staff member a reason their work is being ended. There are, however, some scenarios where a company can not end a staff member’s employment even if the employer is prepared to offer proper composed notice or termination pay. For example, a company can not end somebody’s work, or punish them in any other method, if any part of the reason for the termination of work is based on the employee asking concerns about the ESA or exercising a right under the ESA, such as declining to work in excess of the daily or weekly hours of work optimums, or taking a leave of lack defined 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 observe of termination or termination pay under the ESA. Examples include: workers who are guilty of wilful misconduct, disobedience, or wilful neglect of responsibility that is not minor and has not been excused by the company. Other examples include building and construction employees, staff members on momentary layoff, employees who refuse an offer of sensible alternative employment and staff members who have been used less than three months.

There are a number of other exemptions to the termination of employment arrangements of the ESA. See “Exemptions to observe of termination or termination pay.” Please likewise refer to the special rule tool.

The termination-of-employment rules are entirely separate from any privileges a staff member might have to be paid severance pay under the ESA.

Constructive dismissal

A positive dismissal may happen when a company makes a significant change to a basic term or condition of an employee’s work without the worker’s actual or implied permission.

For instance, a staff member may be constructively dismissed if the company makes modifications to the employee’s terms and conditions of work that result in a substantial decrease in salary or a significant unfavorable modification in such things as the employee’s work location, hours of work, authority, or position. Constructive termination may likewise include circumstances where an employer pesters or abuses a worker, or an employer offers an employee a demand to “stop or be fired” and the staff member resigns in reaction.

The worker would need to resign in action to the modification within an affordable time period in order for the company’s actions to be considered a termination of work for functions of the ESA.

Constructive termination is a complex and challenging topic. To find out more on positive termination, please call the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

An employee is on short-lived layoff when an employer cuts down or stops the worker’s work without ending their work (for example, laying somebody off sometimes when there is not sufficient work to do). The mere fact that the employer does not define a recall date when laying the worker off does not necessarily mean that the lay-off is not short-lived. Note, however, that a lay-off, even if planned to be short-term, might lead to constructive dismissal if it is not permitted by the employment agreement.

For the functions of the termination provisions of the ESA, a “week of layoff” is a week in which the employee earned less than half of what they would generally make (or earns 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 not able or available to work, went through disciplinary suspension, or was not offered 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 need to offer a reason for the lay-off. (They may, nevertheless, be needed to do these things under a collective arrangement or an .)

Under the ESA, a “short-lived layoff” can last:

1. not more than 13 weeks of layoff in any duration of 20 consecutive weeks;
or

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

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

– the staff member gets extra unemployment advantages;
or

– the staff member would be entitled to receive supplemental unemployment benefits however isn’t receiving them since they are utilized elsewhere;
or

– the company remembers the employee 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 worker 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 between the union and the company.

If an employee is laid off for a period longer than a momentary layoff as set out above, the company is thought about to have actually terminated the employee’s employment. Generally, the staff member will then be entitled to termination pay.

Written notification of termination and termination pay

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

– the employer has offered the staff member correct written notification of termination and the notification duration has actually expired

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

Written notice of termination

A staff member is entitled to notice of termination (or termination pay instead of notification) if they have actually been constantly utilized for a minimum of 3 months. A person is thought about “employed” not just while they are actively working, but also throughout any time in which they are not working however the employment relationship still exists (for example, time in which the staff member is off sick or on leave or on lay-off).

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

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

– if two separate durations of employment are separated by more than 13 weeks, only the most recent duration counts for purposes of notification of termination

It is possible, in some situations, for an individual to have been “continuously employed” for 3 months or more and yet have a period of employment of less than 3 months. In such situations, the staff member would be entitled to notice since a staff member who has been continually employed for a minimum of three months is entitled to see, and the minimum notification entitlement of one week applies to an employee with a period of employment of any length less than one year.

The following chart defines the amount of notice needed:

Note: Special guidelines determine the amount of notice required when it comes to mass terminations – where the work of 50 or more workers is ended at an employer’s establishment within a four-week period.

Requirements throughout the statutory notice period

During the statutory notice period, an employer should:

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

– continue to make whatever contributions would be needed to keep the employee’s advantages plans; and

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

Regular rate

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

Regular wages

These are incomes besides overtime pay, vacation pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and discontinuance wage and particular contractual entitlements.

Regular work week

For an employee who typically works the exact same number of hours every week, a routine work week is a week of that lots of hours, not including overtime hours.

Some employees do not have a routine work week. That is, they do not work the exact same number of hours weekly or they are paid on a basis other than time. For these staff members, the “regular wages” for a “routine work week” is the typical quantity of the routine earnings made by the staff member in the weeks in which the worker worked during the duration of 12 weeks immediately preceding the date the notification was provided.

A company is not allowed to schedule a staff member’s vacation time during the statutory notice period unless the employee-after getting composed notification of termination of employment-agrees to take their vacation time throughout the notice period.

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

How to offer written notification

For the most part, composed notification of termination of work should be addressed to the staff member. It can be provided personally or by mail, fax or email, as long as delivery can be verified.

There are unique guidelines for supplying notification of termination if a worker has a contract of work or a cumulative agreement that supplies seniority rights that permit an employee who is to be laid off or whose work is to be terminated to displace (” bump”) other staff members.

In that case, the company should post a notice in the office (where it will be seen by the employees) setting out the names, employment seniority and job classification of those employees the employer intends to terminate and the date of the proposed termination. The posting of the notification is thought about to be notice of termination, as of the date of the posting, to an employee who is “bumped” by a worker called in the notification. However, this notification of termination need to still meet the length requirements set out in the ESA.

There are likewise special guidelines relating to how notification is offered when there is a mass termination.

Termination pay

A worker who does not receive the written notification required under the ESA should be provided termination pay in lieu of notification. Termination pay is a swelling sum payment equal to the routine incomes for a regular work week that an employee would otherwise have been entitled to during the composed notice period. An employee makes getaway pay on their termination pay. Employers should likewise continue to make whatever contributions would be needed to keep the advantages the worker would have been entitled to had they continued to be employed through the notification period.

Example: Regular work week

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

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

Sarah’s regular salaries for a routine work week are computed:

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

Her termination pay is computed:

$ 800.00 X 3 weeks = $2,400.00

Then her trip 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 must likewise ensure continued protection for any benefit or pension that used to her for 3 weeks.

Example: No regular work week

Gerry has worked at a retirement home for employment four years. He works each week, however his hours vary from week to week. His rate of pay is $25.00 an hour, and he is paid 6 per cent holiday pay.

Gerry’s employer removed his position and did not give Gerry any written notice of termination. Gerry was ill and off work for 2 of the 12 weeks right away 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 profits weekly are determined:

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

His termination pay is computed:

$ 180.00 × 4 weeks = $720.00

Then his holiday pay on his termination pay is determined:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer must also make sure continued coverage for any advantage or pension that used to him for four weeks.

When to pay termination pay

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

Mass termination

Special rules for notification of termination may apply in cases of mass termination (when an employer is terminating 50 or more workers at its establishment within a four-week duration).

Meaning of “facility”

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

– they are located within the very same municipality, or

– a worker at one area has legal seniority rights that encompass the other location, enabling the worker to displace another staff member (also called “bumping rights”).

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

This will need that workers who work solely remotely be thought about for inclusion in the count when figuring out whether 50 or more staff members have actually been terminated.

Note that where an employee carries out work both from their home and from another area where the company brings on company (for instance, an office), their home is not included in the meaning of “establishment”. Instead, the staff member is considered to have a connection to the office place and, therefore, for the purpose of mass termination, the staff member is included with regard to that office area.

Example: where multiple locations are thought about one “establishment”

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

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

Employer commitments in a mass termination

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

– email to esa_form1_notice@ontario.ca.

– fax to (416) 326-7061.

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

– mail delivery to the Director’s office, if the delivery can be verified.

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

Any notification to the impacted staff members is ruled out to have actually been given till the Form 1 is received by the Director; to put it simply, notification of mass termination is not efficient until the Director gets the Form 1.

In addition to offering employees with private notifications of termination, the company must, on the very first day of the notification duration:

– post a copy of the Form 1 provided to the Director in the workplace where it will come to the attention of the impacted workers.

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

The amount of notice staff members should receive in a mass termination is not based upon the workers’ length of employment, but on the number of staff members who have actually been terminated. A company needs to give:

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

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

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

Exception to the mass termination rules

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

– the variety of staff members whose employment is being ended represents not more than 10 percent of the employees who have actually been employed for a minimum of 3 months at the facility

– none of the terminations are brought on by the irreversible discontinuance of all or part of the employer’s organization at the facility

Mass termination: resignation by an employee

A staff member who has actually received termination notification under the mass termination rules who wants to resign before the termination date offered in the company’s notification should provide the company a minimum of one week’s written notice of resignation if the worker has been used for less than 2 years. If the work duration has actually been 2 years or more, the worker must offer a minimum of two weeks’ composed notification of resignation. However, the staff member does not have to notify of resignation if the company constructively dismisses the worker or breaches a term of the contract.

Temporary work after termination date in notice

An employer can offer work to a worker who has actually been given notice of termination on a temporary basis in the 13-week period after the termination date set out in the notification without impacting the initial date of the termination and without being needed to supply any more notice of termination to the worker when the short-lived work ends.

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

Recall rights

A “recall right” is the right of an employee on a layoff to be recalled to work by their company under a term or condition of employment. This right is commonly found in cumulative agreements.

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

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

If an employee is entitled to both termination pay and discontinuance wage, they need to make the very same choice for both.

If a staff member who is not represented by a trade union chooses to keep their recall rights or stops working to make an option, the employer needs to send out the amount of the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the money in trust.

If an employee who is represented by a trade union elects to keep their recall rights or stops working to decide, the employer and the trade union need to try to come to a plan to hold the termination pay (and discontinuance wage, if any) in trust for the worker. If they can not concern an arrangement, and the trade union recommends the employer and the Director of Employment Standards in writing that efforts have failed, the employer must 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 picks to give up their recall rights or if the recall rights end, the cash that is held in trust should be sent out to the staff member.

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

Exemptions to see 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 information. Please also refer to the special guideline 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 duty that is not minor and has not been excused by the employer. Note: “wilful” consists of when a worker meant the resulting effect or acted recklessly if they understood or need to have known the results their conduct would have. Poor work conduct that is unintentional or unintended is usually not thought about wilful;

– was worked with for a particular length of time or until the completion of a particular job. However, such a staff member will be entitled to discover of termination or termination pay if:- the work ends before the term ends or the task is finished; or

– the term expires or the task is not completed more than 12 months after the employment started; or

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

See likewise: Employment Standards Self-Service Tool

Wrongful termination

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

The rules under the ESA about termination and severance of work are minimum requirements. Some workers 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 desire to sue their former company in court for “wrongful dismissal”. Employees should understand that they can not sue an employer for wrongful termination and submit a claim for termination pay or discontinuance wage with the ministry for the very same termination or severance of employment. A staff member should pick one or the other. Employees might want to acquire legal advice worrying their rights.

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