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Termination Of Employment

A number of expressions are commonly utilized to explain circumstances when work is ended. These consist of “release,” “discharged,” “dismissed,” “fired” and “completely laid off.”

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

– dismisses or stops using a worker, including where a worker is no longer used due to the insolvency or insolvency of the company;

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

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

For the most part, when an employer ends the work of a worker who has been continuously used for 3 months, the company needs to supply the worker 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 notification the staff member is entitled to get).

The ESA does not need an employer to give a worker a factor why their work is being ended. There are, however, some circumstances where an employer can not terminate an employee’s work even if the employer is prepared to provide proper composed notice or termination pay. For instance, an employer can not end somebody’s employment, or penalize them in any other method, 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 day-to-day or weekly hours of work optimums, or taking a leave of absence specified in the ESA. Please see the chapter on reprisals.

Qualifying for termination notice or pay in lieu

Certain workers are not entitled to observe of termination or termination pay under the ESA. Examples include: staff members who are guilty of wilful misbehavior, disobedience, or wilful disregard of task that is not trivial and has not been excused by the company. Other examples include building and construction staff members, employees on short-lived layoff, workers who decline a deal of reasonable alternative work and workers who have actually been employed less than 3 months.

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

The termination-of-employment guidelines are totally separate from any entitlements an employee might have to be paid severance pay under the ESA.

Constructive termination

A useful termination may take place when a company makes a substantial modification to a basic term or condition of a worker’s work without the staff member’s actual or implied permission.

For instance, a worker might be constructively dismissed if the employer makes changes to the staff member’s terms and conditions of employment that lead to a substantial reduction in wage or a substantial unfavorable change in such things as the worker’s work area, hours of work, authority, or position. Constructive termination may also include circumstances where a company pesters or employment abuses a staff member, or an employer provides an employee an ultimatum to “stop or be fired” and the staff member resigns in reaction.

The employee would have to resign in response to the modification within a reasonable amount of time in order for the employer’s actions to be thought about a termination of employment for purposes of the ESA.

Constructive termination is a complex and tough topic. To find out more on useful termination, please get in touch with the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A staff member is on short-lived layoff when a company cuts back or stops the worker’s work without ending their work (for instance, laying somebody off at times when there is not enough work to do). The mere fact that the employer does not specify a recall date when laying the employee off does not necessarily imply that the lay-off is not short-lived. Note, however, that a lay-off, even if planned to be short-term, may lead to useful termination if it is not permitted by the work agreement.

For the functions 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 ordinarily make (or makes usually) in a week.

A week of layoff does not consist of any week in which the employee did not work for several days due to the fact that the worker was not able or readily available to work, underwent disciplinary suspension, or was not provided with work due to the fact that of a strike or lockout at their location of employment or in other places.

Employers are not needed under the ESA to provide workers with a written notification of a temporary layoff, nor do they need to supply a reason for the lay-off. (They may, however, be needed to do these things under a cumulative agreement or a work contract.)

Under the ESA, a “short-lived 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 period of 20 successive weeks, however less than 35 weeks of layoff in any period of 52 successive weeks, where:- the staff member continues to get significant payments from the employer;
or

– the employer continues to make payments for the advantage of the staff member under a genuine group or worker insurance plan (such as a medical or drug insurance coverage strategy) or a genuine retirement or pension strategy;
or

– the employee gets additional joblessness advantages;
or

– the worker would be entitled to receive additional unemployment advantages but isn’t getting them due to the fact that they are utilized somewhere else;
or

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

– the company remembers the employee within the time frame set out in a contract with a worker who is not represented by a trade union;
or

3. a layoff longer than a layoff explained in ‘B’ where the employer remembers a staff member who is represented by a trade union within the time set out in a contract between the union and the employer.

If an employee is laid off for a duration longer than a momentary layoff as set out above, the employer is thought about to have ended the employee’s work. 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 constantly for three months or more if either:

– the company has actually given the worker appropriate composed notification of termination and the notice duration has actually expired

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

Written notification of termination

A staff member is entitled to observe of termination (or termination pay rather of notice) if they have actually been constantly utilized for at least three months. An individual is thought about “employed” not only while they are actively working, but also during whenever in which they are not working however the work relationship still exists (for example, time in which the employee is off ill or on leave or on lay-off).

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

– if a lay-off goes on longer than a momentary lay-off, the staff member’s work is considered (or considered) to have actually been terminated on the very first day of the lay-off-any time after that does not count as part of the staff member’s duration of work, even though the worker may still be used for purposes of the “continually utilized for 3 months” qualification

– if two separate durations of work are separated by more than 13 weeks, only the most current period counts for purposes of notification of termination

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

The following chart specifies the amount of notification needed:

Note: Special rules identify the amount of notice required when it comes to mass terminations – where the employment of 50 or more workers is ended at a company’s facility within a four-week period.

Requirements during the statutory notice duration

During the statutory notice duration, a company must:

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

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

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

Regular rate

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

Regular wages

These are salaries besides overtime pay, vacation pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and severance pay and particular legal privileges.

Regular work week

For a worker who generally works the exact same number of hours each week, a work week is a week of that numerous hours, not including overtime hours.

Some employees do not have a routine work week. That is, they do not work the very same number of hours each week or they are paid on a basis other than time. For these staff members, the “routine incomes” for a “routine work week” is the typical amount of the regular salaries earned by the staff member in the weeks in which the staff member worked throughout the duration of 12 weeks instantly preceding the date the notification was provided.

A company is not allowed to arrange a staff member’s getaway time throughout the statutory notification period unless the employee-after getting written notice of termination of employment-agrees to take their trip time throughout the notice duration.

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

How to provide written notice

For the most part, written notification of termination of employment must be addressed to the worker. It can be supplied personally or by mail, fax or e-mail, as long as delivery can be confirmed.

There are unique guidelines for offering notice of termination if a worker has an agreement of employment or a cumulative agreement that supplies seniority rights that allow 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 needs to post a notification in the workplace (where it will be seen by the staff members) setting out the names, seniority and job classification of those employees the company intends 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 worker who is “bumped” by an employee named in the notification. However, this notice of termination should still meet the length requirements set out in the ESA.

There are likewise unique rules concerning how notice is provided when there is a mass termination.

Termination pay

An employee who does not get the written notice needed under the ESA must be offered termination pay in lieu of notification. Termination pay is a lump sum payment equal to the routine wages for a regular work week that a staff member would otherwise have been entitled to during the written notice period. A staff member earns vacation pay on their termination pay. Employers must also continue to make whatever contributions would be required to maintain the benefits the employee would have been entitled to had they continued to be employed through the notification period.

Example: Regular work week

Sarah has worked for 3 and a half years. Now her job has been removed and her employment has been terminated. Sarah was not provided any written notice of termination.

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

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

$ 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 determined:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The company should also ensure continued coverage for any advantage or pension plans that used to her for three weeks.

Example: No routine work week

Gerry has worked at a retirement home for four years. He works every 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 vacation pay.

Gerry’s employer eliminated his position and did not give Gerry any written notice of termination. Gerry was ill and off work for two of the 12 weeks immediately preceding the day his employment was terminated. Gerry earned $1,800.00 in the 12 weeks before the day on which his work ended.

Gerry is entitled to four weeks of termination pay.

Gerry’s typical earnings per week are computed:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off sick for 2 weeks for that reason these weeks are not consisted of in the estimation of typical earnings) = $180.00 a week

His termination pay is determined:

$ 180.00 × 4 weeks = $720.00

Then his getaway pay on his termination pay is computed:

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 company must also make sure ongoing protection for any advantage or pension that used to him for 4 weeks.

When to pay termination pay

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

Mass termination

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

Meaning of “facility”

An “establishment” is a place at which the employer carries on company. Separate places can be thought about one facility if either:

– they are located within the same municipality, or

– a worker at one location has contractual seniority rights that extend to the other place, enabling the worker to displace another worker (also called “bumping rights”).

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

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

Note that where a worker carries out work both from their home and from another area where the company brings on company (for employment example, an office), their home is not consisted of in the definition of “establishment”. Instead, the staff member is thought about to have a connection to the office area and, for that reason, for the function of mass termination, the staff member is included with regard to that workplace area.

Example: where numerous locations are considered one “facility”

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

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

Employer commitments in a mass termination

When a mass termination happens, the company needs to complete and provide 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 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 confirmed.

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

Any notice to the impacted employees is ruled out to have been provided until the Form 1 is received by the Director; in other words, notice of mass termination is not effective until the Director receives the Form 1.

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

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

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

The quantity of notice employees need to get in a mass termination is not based on the staff members’ length of work, but on the variety of workers who have been terminated. A company needs to provide:

– 8 weeks observe if the work of 50 to 199 employees is to be terminated

– 12 weeks discover if the employment of 200 to 499 staff members is to be ended

– 16 weeks observe if the employment of 500 or more staff members is to be terminated

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 ended represents not more than 10 per cent of the staff members who have been employed for at least three months at the establishment

– 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 a staff member

An employee who has actually received termination notice under the mass termination guidelines who wishes to resign before the termination date supplied in the company’s notice must give the employer a minimum of one week’s written notification of resignation if the staff member has been used for less than two years. If the work duration has been 2 years or more, the employee should offer a minimum of two weeks’ written notification of resignation. However, the employee does not need to notify of resignation if the company constructively dismisses the employee or breaches a term of the agreement.

Temporary work after termination date in notice

A company can provide work to an employee who has been offered notification of termination on a short-lived 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 required to provide any further notice of termination to the worker when the short-lived work ends.

If an employee works beyond the 13-week period after the termination date and then has their employment terminated, the employee will be entitled to a brand-new composed notice of termination as if the previous notice had never ever been provided. The staff member’s period of work will then likewise consist of the duration of temporary work.

Recall rights

A “recall right” is the right of a staff member on a layoff to be recalled to work by their employer under a term or condition of work. This right is frequently found 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 may select to:

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

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

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

If an employee who is not represented by a trade union chooses to keep their recall rights or fails to choose, the company should send the quantity of the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If a worker who is represented by a trade union chooses to keep their recall rights or stops working to choose, the employer and the trade union must attempt to come to an arrangement to hold the termination pay (and discontinuance wage, if any) in trust for the worker. If they can not pertain to a plan, and the trade union recommends the company and the Director of Employment Standards in writing that efforts have failed, the employer should send the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If a staff member picks to quit their recall rights or if the recall rights end, the cash that is held in trust should be sent to the worker.

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

Exemptions to discover 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 need more information. Please also refer to the special rule 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 insignificant and has actually not been excused by the company. Note: “wilful” consists of when a worker intended the resulting repercussion or acted recklessly if they understood or must have understood the results their conduct would have. Poor work conduct that is accidental or unintended is normally not thought about wilful;

– was hired for a particular length of time or until the completion of a specific task. However, such a worker 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 finished more than 12 months after the work began; or

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

See likewise: Employment Standards Self-Service Tool

Wrongful dismissal

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

The guidelines under the ESA about termination and severance of work are minimum requirements. Some staff members may have rights under the common law that are greater than the rights to see of termination (or termination pay) and severance pay under the ESA. An employee may wish to sue their former company in court for “wrongful dismissal”. Employees need to understand that they can not take legal action against a company for wrongful dismissal and submit a claim for termination pay or discontinuance wage with the ministry for the exact same termination or severance of work. An employee must select one or the other. Employees might want to get legal advice concerning their rights.