Termination Of Employment

A variety of expressions are commonly utilized to describe situations when work is ended. These consist of “release,” “discharged,” “dismissed,” “fired” and “permanently laid off.”

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

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

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

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

For the most part, when an employer ends the employment of an employee who has been continually utilized for three months, the employer needs to provide the employee with either composed notification of termination, termination pay or a combination (as long as the notification and the variety of weeks of termination pay together equivalent the length of notice the staff member is entitled to receive).

The ESA does not need an employer to give a worker a reason that their work is being ended. There are, nevertheless, some situations where a company can not terminate an employee’s work even if the employer is prepared to offer proper written notice or termination pay. For example, an employer can not end someone’s employment, or penalize them in any other way, if any part of the factor for the termination of work is based upon the worker asking questions about the ESA or exercising a right under the ESA, such as declining to work in excess of the day-to-day or weekly hours of work optimums, or taking a leave of lack defined in the ESA. Please see the chapter on reprisals.

Receiving termination notice or pay in lieu

Certain staff members are not entitled to observe of termination or termination pay under the ESA. Examples include: staff members who are guilty of wilful misconduct, disobedience, or wilful overlook of duty that is not minor and has not been excused by the employer. Other examples include construction workers, employees on temporary layoff, staff members who refuse an offer of reasonable alternative work and staff members who have actually been used less than three months.

There are a variety of other exemptions to the termination of employment provisions of the ESA. See “Exemptions to discover of termination or termination pay.” Please also describe the unique rule tool.

The termination-of-employment rules are entirely different from any privileges an employee may need to be paid discontinuance wage under the ESA.

Constructive termination

A positive termination might take place when an employer makes a significant change to a fundamental term or condition of a staff member’s employment without the staff member’s real or implied approval.

For instance, an employee may be constructively dismissed if the employer makes modifications to the worker’s terms and conditions of work that lead to a significant decrease in wage or a significant negative modification in such things as the employee’s work area, hours of work, job authority, or position. Constructive termination might likewise consist of circumstances where an employer pesters or abuses a staff member, or an employer provides an employee an ultimatum to “give up or be fired” and the employee resigns in response.

The worker would need to resign in reaction to the change within an affordable duration of time in order for the company’s actions to be considered a termination of work for purposes of the ESA.

Constructive dismissal is a complex and difficult subject. For additional information on positive termination, please get in touch with the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A staff member is on short-term layoff when an employer cuts down or stops the worker’s work without ending their work (for instance, laying someone off at times when there is not sufficient work to do). The mere reality that the company does not define a recall date when laying the employee off does not always indicate that the lay-off is not momentary. Note, nevertheless, that a lay-off, even if planned to be temporary, might result in constructive dismissal if it is not allowed by the employment agreement.

For the functions of the termination arrangements 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 earns on average) in a week.

A week of layoff does not consist of any week in which the staff member did not work for several days because the worker was unable or readily available to work, was subject to disciplinary suspension, or was not provided with work due to the fact that of a strike or lockout at their place of employment or in other places.

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

Under the ESA, a “short-term 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 period of 20 successive weeks, however less than 35 weeks of layoff in any period of 52 consecutive weeks, where:- the employee continues to receive substantial payments from the employer;
or

– the company continues to pay for the benefit of the worker under a genuine group or worker insurance coverage strategy (such as a medical or drug insurance strategy) or a legitimate retirement or pension strategy;
or

– the worker gets additional welfare;
or

– the staff member would be entitled to receive supplementary welfare however isn’t receiving them since they are utilized elsewhere;
or

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

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

3. a layoff longer than a layoff described in ‘B’ where the employer recalls 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 a worker is laid off for a period longer than a short-term layoff as set out above, the company is thought about to have ended the worker’s work. Generally, the staff member will then be entitled to termination pay.

Written notice of termination and termination pay

Under the ESA, a company can terminate the work of a staff member who has actually been used continually for 3 months or more if either:

– the employer has provided the staff member appropriate composed notice of termination and the notification duration has ended

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

Written notification of termination

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

The quantity of notification to which a worker is entitled depends on their “duration of work”. A staff member’s period of work consists of not only perpetuity while the employee is actively working but also whenever that they are not working however the work relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a short-lived lay-off, the worker’s employment is deemed (or thought about) to have actually been terminated on the first day of the lay-off-any time after that does not count as part of the worker’s duration of employment, even though the employee may still be utilized for functions of the “constantly employed for three months” qualification

– if two separate durations 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 circumstances, for an individual to have actually been “continually utilized” for 3 months or more and yet have a period of work of less than three months. In such situations, the staff member would be entitled to notice due to the fact that a worker who has been continuously used for a minimum of three months is entitled to see, and the minimum notification entitlement of one week applies to a staff member with a period of work of any length less than one year.

The following chart specifies the quantity of notification needed:

Note: Special rules figure out the quantity of notification needed when it comes to mass terminations – where the employment of 50 or more workers is terminated at a company’s establishment within a four-week period.

Requirements throughout the statutory notification period

During the statutory notice period, an employer needs to:

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

– continue to make whatever contributions would be required to keep the staff member’s advantages strategies; and

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

Regular rate

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

Regular wages

These are earnings other than overtime pay, getaway pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of task pay, termination pay and severance pay and certain legal privileges.

Regular work week

For a worker who normally works the same variety of hours each week, a routine work week is a week of that numerous hours, not consisting of overtime hours.

Some workers do not have a routine work week. That is, they do not work the very same variety of hours every week or they are paid on a basis aside from time. For these employees, the “regular incomes” for a “regular work week” is the typical quantity of the routine earnings earned by the staff member in the weeks in which the employee worked throughout the period of 12 weeks instantly preceding the date the notification was offered.

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

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

How to offer written notice

In many cases, written notification of termination of work must be resolved to the worker. It can be provided personally or by mail, fax or e-mail, as long as delivery can be validated.

There are unique rules for providing notice of termination if an employee has an agreement of employment or a collective arrangement that supplies seniority rights that enable a staff member who is to be laid off or whose work is to be terminated to displace (” bump”) other workers.

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

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

Termination pay

A worker who does not get the written notification required under the ESA needs to be provided termination pay in lieu of notification. Termination pay is a swelling amount payment equivalent to the regular incomes for a regular work week that a staff member would otherwise have actually been entitled to throughout the composed notification period. A worker makes trip pay on their termination pay. Employers should also continue to make whatever contributions would be required to preserve the advantages the employee would have been entitled to had they continued to be employed through the notification duration.

Example: Regular work week

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

Sarah worked 40 hours a week each week and was paid $20.00 an hour. She also received 4 per cent 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 notification.

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

$ 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 calculated:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

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

Example: No regular work week

Gerry has actually worked at an assisted living home for four years. He works every week, but his hours vary from week to week. His rate of pay is $25.00 an hour, and he is paid 6 percent vacation 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 ended. 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 typical incomes per week are calculated:

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

His termination pay is computed:

$ 180.00 × 4 weeks = $720.00

Then his trip pay on his termination pay is computed:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer must also make sure continued coverage for any benefit or pension that used to him for job four weeks.

When to pay termination pay

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

Mass termination

Special guidelines for notification of termination might apply in cases of mass termination (when a company is terminating 50 or more employees at its facility within a four-week duration).

Meaning of “establishment”

An “facility” is a location at which the company brings on company. Separate locations can be thought about one establishment if either:

– they are located within the exact same municipality, or

– a staff member at one location has legal seniority rights that encompass the other location, enabling the worker to displace another worker (also called “bumping rights”).

Effective October 26, 2023, in cases of mass termination, the term “establishment” includes a staff member’s home, however only if the staff member works from home and does not work at any other place where the company continues company.

This will need that workers who work exclusively from another location be thought about for inclusion in the count when identifying whether 50 or more employees have been terminated.

Note that where an employee carries out work both from their home and from another location where the company continues company (for instance, a workplace), their home is not included in the meaning of “establishment”. Instead, the staff member is considered to have a connection to the workplace location and, therefore, for the function of mass termination, the employee is included with regard to that office area.

Example: where multiple places are considered one “establishment”

ABC Company has a workplace 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 business from home and does not operate at the workplace.

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

Employer commitments in a mass termination

When a mass termination occurs, 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 shipment 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 confirmed.

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

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

In addition to supplying workers with specific notices of termination, the company must, on the very first day of the notice period:

– publish a copy of the Form 1 provided to the Director in the work environment where it will come to the attention of the impacted employees.

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

The quantity of notification staff members need to receive in a mass termination is not based upon the staff members’ length of employment, but on the number of staff members who have been terminated. An employer needs to give:

– 8 weeks discover if the work of 50 to 199 employees is to be ended

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

– 16 weeks see if the work of 500 or more workers is to be terminated

Exception to the mass termination guidelines

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

– the number of workers whose work is being ended represents not more than 10 per cent of the staff members who have actually been utilized for a minimum of 3 months at the facility

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

Mass termination: resignation by a staff member

A staff member who has gotten termination notice under the mass termination rules who wants to resign before the termination date offered in the employer’s notification must offer the company at least one week’s written notification of resignation if the worker has been utilized for less than two years. If the employment duration has actually been 2 years or job more, the worker must provide a minimum of two weeks’ written notice of resignation. However, the worker does not need to notify of resignation if the employer constructively dismisses the employee or breaches a regard to the agreement.

Temporary work after termination date in notification

An employer can provide work to a staff member who has actually been given notification of termination on a temporary basis in the 13-week duration after the termination date set out in the notice without affecting the initial date of the termination and without being needed to provide any more notification of termination to the employee when the temporary work ends.

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

Recall rights

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

A staff member who has recall rights and who is entitled to termination pay because of a layoff of 35 weeks or more may choose to:

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

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

If an employee is entitled to both termination pay and severance pay, they need to make the very same choice for both.

If a worker who is not represented by a trade union chooses to keep their recall rights or fails to choose, the company must send the amount of the termination pay (and discontinuance wage, 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 elects to keep their recall rights or stops working to make a choice, the employer and the trade union should try 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 an arrangement, and the trade union recommends the company and the Director of Employment Standards in writing that efforts have stopped working, the employer should send out the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the money in trust.

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

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

Exemptions to discover of termination or termination pay

A number of these exemptions are complicated. Please contact the Employment Standards Information Centre, 1-800-531-5551, if you require more information. Please likewise refer to the special rule tool.

The notice of termination and termination pay requirements of the ESA do not use to a worker who:

– is guilty of wilful misconduct, disobedience or wilful neglect of task that is not trivial and has actually not been condoned by the employer. Note: “wilful” includes when a staff member planned the resulting effect or acted recklessly if they knew or ought to have understood the results their conduct would have. Poor work conduct that is accidental or unintentional is normally not thought about wilful;

– was worked with for a specific length of time or until the conclusion of a particular 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 task is finished; or

– the term ends or the job is not finished more than 12 months after the work started; or

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

See also: Employment Standards Self-Service Tool

Wrongful termination

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

The rules under the ESA about termination and severance of work are minimum requirements. Some employees might have rights under the common law that are higher than the rights to notice of termination (or termination pay) and severance pay under the ESA. A staff member may wish to sue their previous company in court for “wrongful termination”. Employees should be mindful that they can not sue a company for wrongful dismissal and submit a claim for termination pay or severance pay with the ministry for the same termination or severance of employment. An employee needs to choose one or the other. Employees may wish to obtain legal suggestions concerning their rights.