Termination Of Employment

A variety of expressions are commonly utilized to describe circumstances when work is ended. These include “release,” “released,” “dismissed,” “fired” and “completely laid off.”

Under the Employment Standards Act, 2000 (ESA) a person’s work is terminated if the employer:

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

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

– lays a staff member off for a duration that is longer than a “short-term layoff”.

Most of the times, when a company ends the work of a staff member who has been continually utilized for three months, the employer needs to supply the employee with either written notice of termination, termination pay or a combination (as long as the notice and the number of weeks of termination pay together equal the length of notification the employee is entitled to receive).

The ESA does not need a company to give a worker a reason why their work is being terminated. There are, nevertheless, some scenarios where a company can not terminate an employee’s employment even if the company is prepared to offer correct composed notification or termination pay. For example, a company can not end somebody’s employment, or penalize them in any other method, if any part of the reason for the termination of employment is based upon the worker asking questions about the ESA or exercising a right under the ESA, such as refusing to work in excess of the daily or weekly hours of work optimums, or taking a leave of lack specified in the ESA. Please see the chapter on reprisals.

Qualifying for termination notice or pay in lieu

Certain workers are not entitled to discover of termination or termination pay under the ESA. Examples consist of: staff members who are guilty of wilful misconduct, disobedience, or wilful neglect of duty that is not unimportant and has actually not been condoned by the employer. Other examples consist of construction employees, staff members on temporary layoff, workers who refuse a deal of sensible alternative work and employees who have been employed less than three months.

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

The termination-of-employment rules are entirely different from any privileges a worker might have to be paid discontinuance wage under the ESA.

Constructive termination

A useful dismissal may take place when an employer makes a considerable modification to a fundamental term or condition of a worker’s employment without the employee’s actual or implied approval.

For instance, an employee might be constructively dismissed if the company makes modifications to the staff member’s conditions of employment that result in a considerable decrease in wage or a considerable negative change in such things as the worker’s work place, hours of work, authority, or position. Constructive dismissal might also consist of scenarios where a company pesters or employment abuses a worker, or an employer offers an employee a demand to “stop or be fired” and the worker resigns in reaction.

The worker would have to resign in reaction to the modification within a reasonable time period in order for the employer’s actions to be considered a termination of employment for purposes of the ESA.

Constructive termination is a complex and difficult subject. For additional information on useful dismissal, please contact the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

An employee is on short-lived layoff when a company cuts down or stops the worker’s work without ending their work (for instance, laying somebody off sometimes when there is inadequate work to do). The mere truth that the employer does not specify a recall date when laying the employee off does not necessarily mean that the lay-off is not momentary. Note, nevertheless, that a lay-off, even if planned to be temporary, employment might lead to positive termination 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 worker made less than half of what they would generally make (or makes typically) in a week.

A week of layoff does not consist of any week in which the staff member did not work for one or more days because 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 place of employment or in other places.

Employers are not needed under the ESA to provide workers with a composed notice of a temporary layoff, nor do they need to offer a reason for employment the lay-off. (They may, nevertheless, be required to do these things under a collective arrangement or an employment agreement.)

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

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

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

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

– the staff member gets supplemental unemployment advantages;
or

– the worker would be entitled to get supplementary joblessness benefits however isn’t getting them due to the fact that 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 employer remembers the employee 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 worker who is represented by a trade union within the time set out in a contract in between the union and the company.

If a worker is laid off for a duration longer than a temporary layoff as set out above, the company is thought about to have actually 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, an employer can end the work of an employee who has been employed constantly for 3 months or more if either:

– the company has given the staff member correct composed notification of termination and the notification period has expired

– the company pays termination pay to the worker where no composed notice or less notification than is required is offered

Written notice of termination

A staff member is entitled to notice of termination (or termination pay instead of notification) if they have actually been continuously utilized for a minimum of three months. A person is considered “utilized” not only while they are actively working, however also throughout whenever in which they are not working but the employment relationship still exists (for instance, time in which the employee is off sick or on leave or on lay-off).

The quantity of notice to which a worker is entitled depends upon their “duration of employment”. A staff member’s duration of employment consists of not only perpetuity while the worker is actively working however also at any time that they are not working but the employment relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a momentary lay-off, the employee’s employment is deemed (or considered) to have been terminated 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 employee may still be used for purposes of the “constantly employed for three months” certification

– if 2 different periods of work are separated by more than 13 weeks, just the most recent period counts for purposes of notification of termination

It is possible, in some circumstances, for an individual to have actually been “continually utilized” for three months or more and yet have a duration of employment of less than three months. In such circumstances, the staff member would be entitled to observe due to the fact that a staff member who has actually been continually used for a minimum of 3 months is entitled to discover, and the minimum notice entitlement of one week uses to a staff member with a period of work of any length less than one year.

The following chart specifies the amount of notice required:

Note: Special rules identify the amount of notice needed in the case of 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 notification period

During the statutory notification duration, a company must:

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

– continue to make whatever contributions would be needed to preserve the employee’s benefits strategies; and

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

Regular rate

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

Regular salaries

These are incomes aside from overtime pay, trip pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and discontinuance wage and specific legal entitlements.

Regular work week

For an employee who typically works the very same variety of hours every week, a regular work week is a week of that many hours, not consisting of overtime hours.

Some employees do not have a routine work week. That is, they do not work the same number of hours each week or they are paid on a basis besides time. For these employees, the “regular salaries” for a “regular work week” is the average quantity of the regular salaries earned by the worker in the weeks in which the worker worked throughout the period of 12 weeks instantly preceding the date the notice was given.

A company is not allowed to set up a worker’s getaway time during the statutory notice period unless the employee-after receiving written notice of termination of employment-agrees to take their trip time throughout the notice period.

If an employer supplies longer notification 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 provide written notice

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

There are unique rules for offering notification of termination if a worker has an agreement of work or a collective arrangement that supplies seniority rights that enable an employee who is to be laid off or whose employment is to be ended to displace (” bump”) other employees.

Because case, the company must publish a notification in the workplace (where it will be seen by the employees) setting out the names, seniority and task classification of those workers the employer intends to end and the date of the proposed termination. The posting of the notification is considered to be notification of termination, since the date of the publishing, to a worker who is “bumped” by a staff member named in the notification. However, this notice of termination should still meet the length requirements set out in the ESA.

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

Termination pay

An employee who does not get the written notice required under the ESA should be offered termination pay in lieu of notification. Termination pay is a lump sum payment equal to the routine earnings for a regular work week that an employee would otherwise have actually been entitled to throughout the written notice duration. An employee makes holiday pay on their termination pay. Employers need to likewise continue to make whatever contributions would be needed to preserve the advantages the worker would have been entitled to had they continued to be used through the notice period.

Example: Regular work week

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

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

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

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

Her termination pay is determined:

$ 800.00 X 3 weeks = $2,400.00

Then her holiday pay on her termination pay is determined:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

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

Example: No regular work week

Gerry has actually operated at a retirement home for 4 years. He works each week, however his hours vary from week to week. His rate of pay is $25.00 an hour, and he is paid 6 percent trip pay.

Gerry’s company eliminated his position and did not give Gerry any written 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 four weeks of termination pay.

Gerry’s average profits per week are computed:

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

His termination pay is determined:

$ 180.00 × 4 weeks = $720.00

Then his vacation 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 company needs to also guarantee continued coverage for any advantage or pension strategies that used to him for employment four weeks.

When to pay termination pay

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

Mass termination

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

Meaning of “establishment”

An “facility” is an area at which the company carries on organization. Separate locations can be considered one facility if either:

– they are located within the exact same municipality, or

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

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

This will need that workers who work solely remotely be thought about for addition in the count when identifying 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 area where the employer carries on organization (for instance, a workplace), their home is not included in the definition of “establishment”. Instead, the employee is thought about to have a connection to the workplace location and, employment therefore, for the function of mass termination, the staff member is consisted of with respect to that workplace location.

Example: where several areas are considered one “establishment”

ABC Company has a workplace and a warehouse situated in London, ON. Sabrina lives in London and works for ABC Company exclusively from another location: she performs work for the company from home and does not operate at the office.

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

Employer obligations in a mass termination

When a mass termination occurs, the employer should complete and provide the Form 1 (Notice of termination of employment) to the Director of Employment Standards (Director) by:

– e-mail to esa_form1_notice@ontario.ca.

– fax to (416) 326-7061.

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

– mail 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 workers is not considered to have been provided until the Form 1 is gotten by the Director; to put it simply, notice of mass termination is not effective until the Director receives the Form 1.

In addition to providing employees with individual 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 workplace where it will pertain to the attention of the impacted employees.

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

The amount of notice staff members must get in a mass termination is not based upon the workers’ length of employment, but on the variety of staff members who have been terminated. An employer must offer:

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

– 12 weeks see if the work of 200 to 499 staff members is to be ended

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

Exception to the mass termination rules

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

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

– none of the terminations are triggered by the permanent discontinuance of all or part of the company’s business at the facility

Mass termination: resignation by a worker

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

Temporary work after termination date in notice

A company can offer work to an employee who has been notified of termination on a momentary basis in the 13-week duration after the termination date set out in the notice without impacting the original date of the termination and without being required to supply any more notification of termination to the staff member when the momentary 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 new composed notice of termination as if the previous notification had actually never been offered. The worker’s period of work will then also consist of the period of short-lived work.

Recall rights

A “recall right” is the right of an employee on a layoff to be called back to work by their employer under a term or condition of employment. This right is typically found in collective agreements.

A staff member 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 severance pay, if they were entitled to severance pay) at that time;
or

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

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

If a worker who is not represented by a trade union elects to keep their recall rights or stops working to choose, 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 cash in trust.

If an employee who is represented by a trade union chooses to keep their recall rights or stops working to choose, the company and the trade union need to attempt to come to a plan to hold the termination pay (and discontinuance wage, if any) in trust for the staff member. If they can not concern an arrangement, and the trade union recommends the employer and the Director of Employment Standards in composing that efforts have stopped working, 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 expire, the money that is held in trust should be sent out to the staff member.

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

Exemptions to observe of termination or termination pay

A lot of these exemptions are complex. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you require more details. Please also refer to the unique guideline tool.

The notification of termination and termination pay requirements of the ESA do not apply to an employee who:

– is guilty of wilful misconduct, disobedience or wilful overlook of responsibility that is not trivial and has actually not been condoned by the company. Note: “wilful” consists of when an employee meant the resulting repercussion or acted recklessly if they knew or need to have known the effects their conduct would have. Poor work conduct that is unintentional or unintended is usually ruled out wilful;

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

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

– the work continues for 3 months or more after the term expires or the task is finished;

See also: Employment Standards Self-Service Tool

Wrongful dismissal

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

The guidelines under the ESA about termination and severance of 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 worker may wish to sue their former employer in court for “wrongful termination”. Employees should understand that they can not take legal action against a company for wrongful termination and submit a claim for termination pay or discontinuance wage with the ministry for the same termination or severance of work. A staff member must pick one or the other. Employees may wish to obtain legal recommendations concerning their rights.