Termination Of Employment

A variety of expressions are typically utilized to describe situations when employment is terminated. These include “let go,” “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 employment stops using a staff member, consisting of where a worker is no longer employed due to the personal bankruptcy or insolvency of the employer;

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

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

In many cases, when an employer ends the employment of a worker who has been continually used for 3 months, the employer should supply the staff member with either written notice of termination, termination pay or a mix (as long as the notice and the number of weeks of termination pay together equal the length of notice the staff member is entitled to get).

The ESA does not require a company to offer an employee a reason that their work is being terminated. There are, however, some circumstances where an employer can not terminate a worker’s work even if the company is prepared to provide correct composed notification or termination pay. For instance, an employer can not end somebody’s employment, or punish them in any other way, if any part of the factor for the termination of employment is based upon the employee asking concerns about the ESA or working out a right under the ESA, such as declining to work in excess of the everyday or weekly hours of work maximums, or taking a leave of absence specified in the ESA. Please see the chapter on reprisals.

Receiving termination notification or pay in lieu

Certain workers are not entitled to observe of termination or termination pay under the ESA. Examples include: employees who are guilty of wilful misbehavior, disobedience, or wilful neglect of responsibility that is not minor and has not been condoned by the company. Other examples consist of building workers, workers on short-term layoff, employees who refuse an offer of reasonable alternative employment and workers who have actually been utilized less than 3 months.

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

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

Constructive termination

A positive dismissal may happen when a company makes a considerable change to a fundamental term or condition of a worker’s work without the staff member’s actual or implied permission.

For instance, an employee might be constructively dismissed if the company makes changes to the worker’s conditions of work that lead to a significant decrease in income or a substantial unfavorable modification in such things as the employee’s work area, hours of work, authority, or position. Constructive termination might likewise include situations where a company bugs or abuses an employee, or an employer offers a staff member an ultimatum to “quit or be fired” and the staff member resigns in reaction.

The worker would have to resign in response to the change within a sensible time period in order for the company’s actions to be thought about a termination of work for functions of the ESA.

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

Temporary layoff

A worker is on short-term layoff when an employer cuts back or stops the worker’s work without ending their employment (for instance, laying someone off at times when there is inadequate work to do). The simple fact that the company does not specify a recall date when laying the worker off does not always imply that the lay-off is not temporary. Note, however, that a lay-off, even if planned to be temporary, might lead to positive dismissal if it is not permitted by the employment agreement.

For the purposes of the termination provisions of the ESA, a “week of layoff” is a week in which the employee made less than half of what they would normally make (or makes typically) in a week.

A week of layoff does not include any week in which the employee did not work for several days due to the fact that the employee was not able or offered to work, was subject to disciplinary suspension, or was not provided 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 offer workers with a composed notice of a short-lived layoff, nor do they need to provide a factor for the lay-off. (They may, nevertheless, be required to do these things under a collective agreement or an employment agreement.)

Under the ESA, a “momentary layoff” can last:

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

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

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

– the employee receives supplementary welfare;
or

– the employee would be entitled to get supplementary welfare however isn’t getting them since they are employed elsewhere;
or

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

– the company recalls the staff member within the time frame set out in an agreement with an employee 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 a contract between the union and the employer.

If a staff member is laid off for a duration longer than a temporary layoff as set out above, the employer is considered to have terminated the worker’s employment. Generally, 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 a worker who has been used continuously for 3 months or more if either:

– the company has offered the employee appropriate written notification of termination and the notice period 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

An employee is entitled to discover of termination (or termination pay rather of notification) if they have actually been continuously employed for at least three months. An individual is thought about “utilized” not just while they are actively working, however also during whenever in which they are not working however the employment relationship still exists (for example, time in which the worker is off sick or on leave or on lay-off).

The amount of notice to which a worker is entitled depends on their “duration of work”. An employee’s duration of employment consists of not only perpetuity while the worker is actively working but likewise at 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 worker’s work is deemed (or thought about) to have actually been ended on the first day of the lay-off-any time after that does not count as part of the worker’s duration of work, although the worker might still be utilized for purposes of the “constantly used for 3 months” credentials

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

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

The following chart defines the quantity of notice required:

Note: Special rules figure out the quantity of notification needed when it comes to mass terminations – where the work of 50 or more staff members is ended at an employer’s establishment within a four-week period.

Requirements throughout the statutory notice duration

During the statutory notice duration, a company needs to:

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

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

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

Regular rate

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

Regular earnings

These are incomes other than overtime pay, getaway pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and severance pay and specific legal privileges.

Regular work week

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

Some staff members do not have a regular work week. That is, they do not work the very same number of hours each week or they are paid on a basis aside from time. For these employees, employment the “routine wages” for a “routine work week” is the average quantity of the regular earnings earned by the staff member in the weeks in which the worker worked during the duration of 12 weeks instantly preceding the date the notification was provided.

A company is not permitted to schedule an employee’s holiday time during the statutory notification duration unless the employee-after receiving written notification of termination of employment-agrees to take their getaway time during the notification duration.

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

How to supply written notification

In a lot of cases, composed notice of termination of employment must be addressed to the staff member. It can be provided face to face or by mail, fax or e-mail, as long as shipment can be validated.

There are unique guidelines for offering notification of termination if a staff member has a contract of work or a cumulative arrangement that offers seniority rights that allow a staff member who is to be laid off or whose work is to be ended to displace (” bump”) other employees.

In that case, the employer should publish a notice in the workplace (where it will be seen by the workers) setting out the names, seniority and task classification of those staff members the company means to end and the date of the proposed termination. The posting of the notice is considered to be notice of termination, as of the date of the posting, to a staff member who is “bumped” by an employee called in the notification. However, this notification of termination need to still satisfy the length requirements set out in the ESA.

There are also special guidelines regarding how notice is provided when there is a mass termination.

Termination pay

A staff member who does not get the composed notice required under the ESA must be provided termination pay in lieu of notification. Termination pay is a lump sum payment equal to the routine incomes for a regular work week that a worker would otherwise have actually been entitled to during the composed notification period. A worker earns trip pay on their termination pay. Employers should likewise continue to make whatever contributions would be needed to keep the benefits the worker would have been entitled to had they continued to be utilized through the notification duration.

Example: Regular work week

Sarah has actually worked for 3 and a half years. Now her job has actually been eliminated and her work has been terminated. Sarah was not given any composed notification of termination.

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

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 calculated:

$ 800.00 X 3 weeks = $2,400.00

Then her getaway pay on her termination pay is computed:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The company should likewise ensure continued coverage for any benefit or pension that applied to her for 3 weeks.

Example: No regular work week

Gerry has operated at an assisted living home for 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 getaway pay.

Gerry’s employer removed his position and did not give Gerry any composed notice 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 average incomes per week are determined:

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

His termination pay is computed:

$ 180.00 × 4 weeks = $720.00

Then his getaway pay on his termination pay is computed:

6% of $720.00 = $43.20

Finally, his vacation pay is added to his termination pay:

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer needs to also make sure ongoing 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 employee’s work is ended or on the staff member’s next regular pay date, whichever is later on.

Mass termination

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

Meaning of “establishment”

An “establishment” is an area at which the employer carries on service. Separate places can be thought about one facility if either:

– they lie within the very same municipality, or

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

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

This will need that workers who work solely remotely be considered for addition in the count when figuring out whether 50 or more staff members have been ended.

Note that where a staff member carries out work both from their home and from another location where the company continues organization (for instance, a workplace), their home is not consisted of in the definition of “facility”. Instead, the staff member is considered to have a connection to the office place and, for that reason, for the purpose of mass termination, the staff member is included with respect to that office area.

Example: where several places are considered one “establishment”

ABC Company has an office and a warehouse located in London, ON. Sabrina lives in London and works for ABC Company specifically remotely: she carries out work for the business from home and does not work at the workplace.

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

Employer responsibilities in a mass termination

When a mass termination occurs, the employer should finish 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.

– individual shipment to the Director’s office 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 flooring, 400 University Avenue, Toronto ON M7A 1T7.

Any notice to the impacted employees is ruled out to have been provided up until the Form 1 is gotten by the Director; to put it simply, notification of mass termination is not reliable up until the Director gets the Form 1.

In addition to providing workers with specific notifications of termination, the company must, on the first day of the notification duration:

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

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

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

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

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

– 16 weeks notice if the work of 500 or more staff members is to be ended

Exception to the mass termination guidelines

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

– the variety 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 three months at the facility

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

Mass termination: by a staff member

An employee who has actually gotten termination notice under the mass termination rules who wishes to resign before the termination date supplied in the employer’s notice must give the employer a minimum of one week’s composed notification of resignation if the employee has actually been utilized for less than 2 years. If the work duration has actually been two years or more, the employee must give a minimum of 2 weeks’ written notice of resignation. However, the worker does not have to provide notification of resignation if the company constructively dismisses the employee or breaches a regard to the agreement.

Temporary work after termination date in notification

A company can provide work to a worker who has actually been notified of termination on a short-lived basis in the 13-week period after the termination date set out in the notice without impacting the initial date of the termination and without being needed to provide any more notice of termination to the worker when the temporary work ends.

If a worker works beyond the 13-week period after the termination date and after that has their work ended, the worker will be entitled to a brand-new composed notice of termination as if the previous notice had actually never ever 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 a worker on a layoff to be recalled to work by their employer under a term or condition of work. This right is commonly discovered in cumulative arrangements.

A worker who has recall rights and who is entitled to termination pay because of a layoff of 35 weeks or more might pick to:

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

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

If an employee is entitled to both termination pay and discontinuance wage, they should make the 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 decide, the employer should send out the quantity of the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the money in trust.

If a worker who is represented by a trade union elects to keep their recall rights or stops working to make an option, the company and the trade union should attempt 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 recommends the company and the Director of Employment Standards in composing that efforts have actually stopped working, the company needs to send out the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the money in trust.

If a staff member selects to provide up their recall rights or if the recall rights expire, the cash that is kept in trust must be sent out to the worker.

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

Exemptions to notice of termination or termination pay

Many of these exemptions are intricate. Please call the Employment Standards Information Centre, 1-800-531-5551, if you require more info. Please likewise describe the unique guideline tool.

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

– is guilty of wilful misbehavior, disobedience or wilful disregard of duty that is not unimportant and has actually not been condoned by the company. Note: “wilful” consists of when a staff member planned the resulting effect or acted recklessly if they knew or should have understood the effects their conduct would have. Poor work conduct that is accidental or unintended is usually ruled out wilful;

– was employed for a particular length of time or until the conclusion of a specific job. However, such an employee will be entitled to notice of termination or termination pay if:- the work ends before the term expires or the job is finished; or

– the term ends or the job is not completed more than 12 months after the employment started; or

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

See also: Employment Standards Self-Service Tool

Wrongful termination

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

The guidelines under the ESA about termination and severance of work are minimum requirements. Some staff members might have rights under the typical law that are higher than the rights to notice of termination (or termination pay) and discontinuance wage under the ESA. A staff member might wish to sue their previous employer in court for “wrongful termination”. Employees ought to know that they can not sue a company for wrongful termination and sue for termination pay or discontinuance wage with the ministry for the exact same termination or employment severance of work. A worker must pick one or the other. Employees might wish to acquire legal advice worrying their rights.