Termination Of Employment

A number of expressions are commonly utilized to explain circumstances when work is terminated. These consist of “let go,” “released,” “dismissed,” “fired” and “completely laid off.”

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

– dismisses or stops using a staff member, including where a worker is no longer utilized due to the insolvency or insolvency of the employer;

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

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

Most of the times, when an employer ends the employment of a staff member who has been continuously utilized for 3 months, the employer should provide the employee with either composed notice of termination, termination pay or a mix (as long as the notice and the number of weeks of termination pay together equivalent the length of notification the employee is entitled to receive).

The ESA does not require an employer to give a worker a reason their employment is being terminated. There are, however, some circumstances where an employer can not end a worker’s employment even if the company is prepared to provide appropriate composed notice or termination pay. For example, a company can not end somebody’s work, 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 exercising a right under the ESA, such as refusing to work in excess of the day-to-day or weekly hours of work maximums, or taking a leave of absence defined in the ESA. Please see the chapter on reprisals.

Getting approved for termination notice or pay in lieu

Certain workers are not entitled to discover of termination or termination pay under the ESA. Examples include: employees who are guilty of wilful misconduct, disobedience, or wilful disregard of responsibility that is not insignificant and has actually not been excused by the company. Other examples consist of construction workers, workers on short-term layoff, employees who refuse a deal of sensible alternative employment and staff members who have actually been used less than three months.

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

The termination-of-employment guidelines are totally separate from any privileges a staff member may have to be paid discontinuance wage under the ESA.

Constructive dismissal

A useful dismissal may take place when a company makes a significant change to a fundamental term or condition of a staff member’s employment without the staff member’s real or implied permission.

For example, a staff member might be constructively dismissed if the company makes changes to the staff member’s conditions of work that result in a considerable reduction in wage or a significant unfavorable modification in such things as the employee’s work place, hours of work, authority, or position. Constructive termination might also consist of scenarios where an employer harasses or abuses a staff member, or an employer offers a worker a warning to “stop or be fired” and the employee resigns in action.

The employee would need to resign in reaction to the change within a sensible amount of time in order for the company’s actions to be considered a termination of employment for purposes of the ESA.

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

Temporary layoff

A worker is on short-lived layoff when an employer cuts down or stops the employee’s work without ending their employment (for instance, laying somebody off sometimes when there is inadequate work to do). The simple 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 temporary. Note, nevertheless, that a lay-off, even if intended to be short-term, might result in positive dismissal if it is not enabled by the work contract.

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 ordinarily earn (or earns on average) in a week.

A week of layoff does not include any week in which the staff member did not work for several days due to the fact that the employee was unable or readily available to work, went through disciplinary suspension, or was not supplied with work since of a strike or lockout at their place of employment or elsewhere.

Employers are not needed under the ESA to offer workers with a composed notification of a short-lived layoff, nor do they need to supply a reason for the lay-off. (They may, however, be required to do these things under a collective arrangement or an employment contract.)

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 duration of 20 successive weeks, however less than 35 weeks of layoff in any period of 52 successive weeks, where:- the employee continues to receive substantial payments from the company;
or

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

– the employee receives additional welfare;
or

– the employee would be entitled to get supplementary welfare but isn’t getting them because they are used somewhere else;
or

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

– the company 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 an agreement in between the union and the company.

If an employee is laid off for a period longer than a short-lived layoff as set out above, the company is thought about to have actually ended the employee’s employment. Generally, the worker will then be entitled to termination pay.

Written notification of termination and termination pay

Under the ESA, a company can end the employment of an employee who has actually been employed constantly for three months or more if either:

– the employer has actually provided the staff member appropriate written notification of termination and the notification duration has ended

– the company pays termination pay to the staff member where no composed notification or less notification than is needed is provided

Written notice of termination

A worker is entitled to see 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 “utilized” not only while they are actively working, however also throughout whenever in which they are not working but the work relationship still exists (for example, time in which the staff member is off sick or on leave or on lay-off).

The amount of notification to which a worker is entitled depends upon their “duration of employment”. A staff member’s period of employment includes not just all time while the staff member is actively working however 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 temporary lay-off, the staff member’s employment is considered (or thought about) 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 period of work, despite the fact that the worker may still be employed for purposes of the “continuously used for three months” qualification

– if two different periods of work are separated by more than 13 weeks, only the most current period counts for functions of notification of termination

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

The following chart defines the amount of notice required:

Note: Special guidelines identify the quantity of notice required when it comes to mass terminations – where the employment of 50 or more staff members is terminated at a company’s facility within a four-week period.

Requirements during the statutory notification duration

During the statutory notification period, an employer should:

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

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

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

These are salaries aside from overtime pay, vacation pay, public vacation pay, premium pay, domestic or leave pay, termination of task pay, termination pay and discontinuance wage and certain contractual privileges.

Regular work week

For a worker who typically works the exact same number of hours every week, a regular work week is a week of that lots of hours, not consisting of overtime hours.

Some employees do not have a regular work week. That is, they do not work the same variety of hours each week or they are paid on a basis besides time. For these workers, the “regular incomes” for a “routine work week” is the typical quantity of the routine earnings made by the worker in the weeks in which the staff member worked throughout the period of 12 weeks immediately preceding the date the notice was given.

A company is not permitted to arrange a staff member’s getaway time throughout the statutory notice duration unless the employee-after receiving composed notice of termination of employment-agrees to take their holiday time throughout the notification period.

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

How to provide written notice

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

There are unique guidelines for providing notice of termination if an employee has a contract of work or a cumulative agreement that provides seniority rights that enable a worker who is to be laid off or whose employment is to be ended to displace (” bump”) other employees.

Because case, the employer must post a notification in the work environment (where it will be seen by the workers) setting out the names, seniority and job classification of those employees the employer means to terminate and the date of the proposed termination. The publishing of the notice is thought about to be notification of termination, as of the date of the publishing, to an employee who is “bumped” by a staff member named in the notification. However, this notification of termination should still satisfy the length requirements set out in the ESA.

There are also unique rules concerning how notification is provided when there is a mass termination.

Termination pay

A worker who does not receive the written notification needed under the ESA needs to be provided termination pay in lieu of notice. Termination pay is a swelling amount payment equal to the routine incomes for a routine work week that an employee would otherwise have been entitled to during the written notice duration. A staff member earns vacation pay on their termination pay. Employers should also continue to make whatever contributions would be needed to preserve the benefits the staff member would have been entitled to had they continued to be used through the notice period.

Example: Regular work week

Sarah has worked for 3 and a half years. Now her job has been gotten rid of and her employment has been ended. Sarah was not offered any written notification of termination.

Sarah worked 40 hours a week each week and was paid $20.00 an hour. She likewise got four percent vacation pay. Because she worked for more than three years however 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 calculated:

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

Her termination pay is computed:

$ 800.00 X 3 weeks = $2,400.00

Then her vacation pay on her termination pay is computed:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The company must likewise guarantee ongoing protection for any benefit or pension that used to her for 3 weeks.

Example: No routine work week

Gerry has actually operated at a nursing home for four years. He works each week, but his hours vary from week to week. His rate of pay is $25.00 an hour, and he is paid 6 per cent trip pay.

Gerry’s company eliminated his position and did not offer 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 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 earnings weekly are computed:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off sick for 2 weeks therefore these weeks are not included in the calculation of average incomes) = $180.00 a week

His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00

Then his trip pay on his termination pay is calculated:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer should likewise ensure continued protection for any advantage or pension strategies that applied to him for 4 weeks.

When to pay termination pay

Termination pay should be paid to an employee either 7 days after the staff member’s work is terminated or on the staff member’s next routine pay date, whichever is later.

Mass termination

Special guidelines for notification of termination might apply in cases of mass termination (when an employer is ending 50 or more staff members at its facility within a four-week period).

Meaning of “facility”

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

– they are situated within the very same municipality, or

– an employee at one place has contractual seniority rights that extend to the other location, employment 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 staff member’s home, however only if the employee works from home and does not operate at any other area where the company continues organization.

This will need that workers who work specifically remotely be thought about 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 place where the employer continues business (for instance, an office), their home is not included in the definition of “establishment”. Instead, the staff member is considered to have a connection to the workplace place and, for that reason, for the function of mass termination, the worker is included with respect to that workplace area.

Example: where numerous locations are thought about one “facility”

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

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

Employer commitments in a mass termination

When a mass termination happens, the employer must complete 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.

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

– mail shipment to the Director’s office, if the shipment can be validated.

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 affected workers is ruled out to have been given till the Form 1 is gotten by the Director; to put it simply, notification of mass termination is ineffective until the Director gets the Form 1.

In addition to providing staff members with specific notifications of termination, the employer must, on the first day of the notification duration:

– publish a copy of the Form 1 supplied to the Director in the workplace where it will concern the attention of the affected employees.

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

The amount of notification employees need to receive in a mass termination is not based on the workers’ length of employment, employment however on the number of staff members who have been terminated. A company should give:

– 8 weeks see if the work of 50 to 199 staff members is to be ended

– 12 weeks discover if the work of 200 to 499 workers is to be ended

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

Exception to the mass termination guidelines

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

– the variety of workers whose work is being ended represents not more than 10 percent of the staff members who have been utilized for at least 3 months at the facility

– none of the terminations are triggered by the long-term discontinuance of all or part of the employer’s business at the establishment

Mass termination: resignation by an employee

A worker who has actually gotten termination notification under the mass termination rules who wants to resign before the termination date provided in the company’s notification must provide the company at least one week’s written notification of resignation if the worker has been utilized for less than two years. If the work duration has been two years or more, the worker should provide a minimum of two weeks’ composed notification of resignation. However, the employee does not need to notify of resignation if the company constructively dismisses the worker or breaches a regard to the contract.

Temporary work after termination date in notification

A company can offer work to a worker who has been notified of termination on a short-term basis in the 13-week period after the termination date set out in the notice without impacting the original date of the termination and without being needed to supply any more notice of termination to the worker when the momentary work ends.

If a staff member works beyond the 13-week period after the termination date and after that has their work ended, the worker will be entitled to a new written notice of termination as if the previous notification had actually never ever been provided. The staff member’s duration of work will then likewise include the duration of short-lived work.

Recall rights

A “recall right” is the right of a worker on a layoff to be called back to work by their company under a term or condition of work. This right is frequently found in collective agreements.

A worker who has recall rights and who is entitled to termination pay due to the fact that of a layoff of 35 weeks or more might choose to:

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

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

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

If an employee who is not represented by a trade union elects to keep their recall rights or stops working to choose, the company must send 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 staff member who is represented by a trade union chooses to keep their recall rights or fails to choose, the company 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 come to a plan, and employment the trade union recommends the employer and the Director of Employment Standards in writing that efforts have actually failed, the employer needs to 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 chooses to quit their recall rights or if the recall rights end, the money that is kept in trust should be sent out to the employee.

If the staff member accepts a recall back to work, the cash that is kept in trust will be returned to the employer.

Exemptions to notice of termination or termination pay

Many of these exemptions are complex. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you need more information. Please also describe 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 condoned by the employer. Note: “wilful” consists of when an employee meant the resulting consequence or acted recklessly if they knew or must have known the impacts their conduct would have. Poor work conduct that is unexpected or unintentional is typically ruled out wilful;

– was worked with for a specific length of time or up until the completion of a specific task. However, such a staff member will be entitled to see of termination or termination pay if:- the work ends before the term expires or the task is completed; or

– the term ends or the task is not finished more than 12 months after the employment began; or

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

See also: Employment Standards Self-Service Tool

Wrongful termination

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

The rules under the ESA about termination and severance of employment are minimum requirements. Some employees might have rights under the typical law that are higher than the rights to observe of termination (or termination pay) and discontinuance wage under the ESA. A worker may wish to sue their previous employer in court for “wrongful termination”. Employees should be conscious that they can not sue a company for wrongful termination and sue for termination pay or severance pay with the ministry for the very same termination or severance of work. An employee must select one or the other. Employees may want to acquire legal advice worrying their rights.