Termination Of Employment

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

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

– dismisses or stops employing a staff member, consisting of where a staff member is no longer employed due to the bankruptcy or insolvency of the employer;

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

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

Most of the times, when an employer ends the employment of a worker who has actually been continually employed for three months, the company must provide the staff member with either composed notice of termination, termination pay or a combination (as long as the notice and the variety of weeks of termination pay together equivalent the length of notification the employee is entitled to get).

The ESA does not need an employer to offer an employee a reason their employment is being terminated. There are, however, some circumstances where a company can not terminate a staff member’s employment even if the employer is prepared to give correct written notice or termination pay. For example, a company can not end somebody’s employment, or punish them in any other method, if any part of the factor for the termination of employment is based on the worker asking concerns 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.

Getting approved for termination notification or pay in lieu

Certain staff members are not entitled to discover of termination or termination pay under the ESA. Examples consist of: workers who are guilty of wilful misbehavior, disobedience, or wilful overlook of responsibility that is not unimportant and has not been condoned by the employer. Other examples include building and construction employees, employees on short-term layoff, employees who decline a deal of affordable alternative work and workers who have been used less than 3 months.

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

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

Constructive dismissal

A constructive dismissal might occur when an employer makes a substantial modification to a fundamental term or condition of a worker’s work without the staff member’s actual or implied permission.

For example, an employee may be constructively dismissed if the employer makes modifications to the worker’s terms of employment that result in a considerable reduction in wage or a significant unfavorable modification in such things as the worker’s work location, hours of work, authority, or position. Constructive dismissal may likewise consist of situations where an employer bugs or abuses an employee, or an employer offers an employee a warning to “quit or be fired” and the worker resigns in response.

The employee would need to resign in response to the modification within a sensible period of time in order for the employer’s actions to be considered a termination of work for functions of the ESA.

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

Temporary layoff

An employee is on temporary layoff when a company cuts down or stops the staff member’s work without ending their employment (for example, laying someone off sometimes when there is not adequate work to do). The mere reality that the employer does not define a recall date when laying the staff member off does not always imply that the lay-off is not momentary. Note, nevertheless, that a lay-off, even if planned to be short-lived, may result in positive termination if it is not enabled 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 earned less than half of what they would generally make (or makes on average) in a week.

A week of layoff does not include any week in which the employee did not work for one or employment more days because the staff member was unable or offered to work, underwent disciplinary suspension, or was not provided with work since of a strike or lockout at their location of work or elsewhere.

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

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

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

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

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

– the employee receives extra welfare;
or

– the staff member would be entitled to get extra unemployment benefits but isn’t receiving them due to the fact that they are used in other places;
or

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

– the employer recalls the staff member within the time frame set out in an arrangement with an employee who is not represented by a trade union;
or

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

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

Written notification of termination and termination pay

Under the ESA, an employer can end the employment of a staff member who has actually been utilized constantly for 3 months or more if either:

– the company has actually given the worker proper composed notice of termination and the notification period has actually ended

– the company pays termination pay to the employee where no written notification or less notification than is needed is offered

Written notification of termination

A worker is entitled to notice of termination (or termination pay rather of notification) if they have actually been constantly utilized for a minimum of 3 months. A person is considered “utilized” not only while they are actively working, however likewise throughout any time in which they are not working however the employment relationship still exists (for instance, time in which the staff member is off ill or on leave or on lay-off).

The amount of notice to which a staff member is entitled depends on their “period of employment”. A worker’s period of employment includes not only all time while the staff member is actively working but also 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 worker’s employment is deemed (or thought about) 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 duration of employment, even though the worker might still be employed for functions of the “continuously used for 3 months” qualification

– if 2 different durations of employment are separated by more than 13 weeks, just the most recent duration counts for purposes of notice of termination

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

The following chart defines the amount of notice required:

Note: Special guidelines figure out the amount of notification required when it comes to mass terminations – where the work of 50 or more employees is terminated at an employer’s facility within a four-week period.

Requirements during the statutory notification period

During the statutory notice duration, an employer needs to:

– not lower the worker’s wage rate or modify any other term or condition of work;

– continue to make whatever contributions would be required to keep the worker’s benefits strategies; and

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

Regular rate

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

Regular incomes

These are incomes aside from overtime pay, vacation pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and discontinuance wage and certain contractual privileges.

Regular work week

For employment a worker who typically works the exact same number of hours each week, 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 exact same variety of hours every week or they are paid on a basis other than time. For these staff members, the “routine wages” for a “routine work week” is the average quantity of the routine salaries earned by the staff member in the weeks in which the staff member worked during the period of 12 weeks immediately preceding the date the notification was given.

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

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

How to supply written notification

For the most part, composed notification of termination of employment must be addressed to the employee. It can be provided personally or by mail, fax or email, as long as shipment can be validated.

There are unique rules for supplying notice of termination if a worker has a contract of employment or a collective agreement that supplies seniority rights that allow an employee who is to be laid off or whose employment is to be terminated to displace (” bump”) other employees.

Because case, the employer must post a notification in the workplace (where it will be seen by the employees) setting out the names, seniority and task classification of those employees the company intends to terminate and the date of the proposed termination. The posting of the notice is considered to be notice of termination, since the date of the posting, to an employee who is “bumped” by a worker called in the notice. However, this notification of termination need to still fulfill the length requirements set out in the ESA.

There are likewise unique guidelines concerning how notification is supplied when there is a mass termination.

Termination pay

A staff member who does not receive the composed notification needed under the ESA needs to be offered termination pay in lieu of notification. Termination pay is a swelling amount payment equivalent to the routine earnings for a regular work week that a staff member would otherwise have been entitled to throughout the composed notification duration. A worker earns getaway pay on their termination pay. Employers should also continue to make whatever contributions would be needed to keep the benefits the staff member would have been entitled to had they continued to be employed through the notice duration.

Example: Regular work week

Sarah has worked for three and a half years. Now her task has actually been gotten rid of and her employment has been terminated. Sarah was not provided any written notice of termination.

Sarah worked 40 hours a week every week and was paid $20.00 an hour. She likewise got 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 routine earnings for a routine work week are calculated:

$ 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 trip pay on her termination pay is determined:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

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

Example: No regular work week

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

Gerry’s employer removed his position and did not offer Gerry any written notification 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 employment ended.

Gerry is entitled to four weeks of termination pay.

Gerry’s average incomes per week are computed:

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

His termination pay is determined:

$ 180.00 × 4 weeks = $720.00

Then his trip pay on his termination pay is computed:

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 ongoing coverage for any benefit or pension that used to him for 4 weeks.

When to pay termination pay

Termination pay should be paid to an employee either seven days after the staff member’s work is terminated or on the employee’s next routine pay date, whichever is later on.

Mass termination

Special rules for notification of termination may use in cases of mass termination (when a company is ending 50 or more employees at its facility within a four-week duration).

Meaning of “facility”

An “establishment” is an area at which the company continues organization. Separate locations can be thought about one establishment if either:

– they are situated within the same town, or

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

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

This will need that workers who work exclusively from another location be considered for addition in the count when determining whether 50 or more workers have been ended.

Note that where a staff member performs work both from their home and from another place where the employer continues company (for example, an office), their home is not included in the meaning of “facility”. Instead, the worker is considered to have a connection to the workplace area and, for that reason, for the purpose of mass termination, the worker is consisted of with regard to that office place.

Example: where several areas are considered one “establishment”

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

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

Employer commitments in a mass termination

When a mass termination occurs, the employer should finish 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.

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

Any notice to the affected employees is not thought about to have been provided till the Form 1 is received by the Director; to put it simply, notice of mass termination is ineffective till the Director gets the Form 1.

In addition to offering employees with specific notices of termination, the employer must, on the very first day of the notice duration:

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

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

The amount of notice employees should get in a mass termination is not based on the employees’ length of employment, however on the variety of workers who have actually been terminated. An employer must provide:

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

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

– 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 guidelines do not use if these two things apply:

– the variety of employees whose employment is being terminated represents not more than 10 per cent of the employees who have been used for at least three months at the facility

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

Mass termination: resignation by a worker

An employee who has actually gotten termination notice under the mass termination rules who wishes to resign before the termination date offered in the company’s notification must offer the employer at least one week’s written notice of resignation if the staff member has actually been used for less than two years. If the employment duration has been two years or more, the employee must give a minimum of 2 weeks’ written notice of resignation. However, employment the staff member does not have 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 offer work to a staff member who has been offered notification of termination on a temporary basis in the 13-week duration after the termination date set out in the notification without impacting the original date of the termination and without being required to supply any more notice of termination to the staff member when the short-lived work ends.

If a worker works beyond the 13-week duration after the termination date and after that has their work terminated, the staff member will be entitled to a new written notification of termination as if the previous notification had never ever been offered. The staff member’s duration of employment will then also include the period of temporary work.

Recall rights

A “recall right” is the right of a worker on a layoff to be recalled to work by their company under a term or condition of employment. This right is frequently discovered 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 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 discontinuance wage, if they were entitled to severance pay).

If a staff member 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 fails to choose, the employer needs to send out the amount of the termination pay (and severance pay, employment if any) to the Director of Employment Standards, who holds the cash in trust.

If an employee who is represented by a trade union elects to keep their recall rights or fails to make a choice, the company 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 pertain to an arrangement, and the trade union advises the company and the Director of Employment Standards in composing that efforts have actually failed, the company needs to send out the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If an employee chooses to quit their recall rights or if the recall rights end, the money that is kept in trust must be sent out to the staff member.

If the staff member accepts a recall back to work, the cash that is held in trust will be gone back to the company.

Exemptions to notice of termination or termination pay

Many of these exemptions are complicated. Please call the Employment Standards Information Centre, 1-800-531-5551, if you need more info. Please also refer to 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 misconduct, disobedience or wilful disregard of duty that is not minor and has not been excused by the employer. Note: “wilful” includes when an employee meant the resulting effect or acted recklessly if they knew or must have understood the effects their conduct would have. Poor work conduct that is unexpected or unintentional is usually ruled out wilful;

– was hired for a particular length of time or till the conclusion of a specific job. However, such a staff member will be entitled to notice of termination or termination pay if:- the employment ends before the term expires or the job is finished; or

– the term ends or the task is not completed more than 12 months after the work started; or

– the work continues for 3 months or employment 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, severance pay

The guidelines under the ESA about termination and severance of work are minimum requirements. Some workers might have rights under the typical law that are greater than the rights to notice of termination (or termination pay) and discontinuance wage under the ESA. An employee might wish to sue their former company in court for “wrongful termination”. Employees should be conscious that they can not sue an employer for wrongful dismissal and submit a claim for termination pay or severance pay with the ministry for the very same termination or severance of employment. An employee must pick one or the other. Employees may wish to get legal advice concerning their rights.