Termination Of Employment

A variety of expressions are typically utilized to explain scenarios when work is terminated. These include “let go,” “released,” “dismissed,” “fired” and “permanently laid off.”

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

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

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

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

For the most part, when a company ends the work of a staff member who has been continuously employed for 3 months, the company must offer the staff member with either composed notification of termination, termination pay or a combination (as long as the notice and the number 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 provide a staff member a reason their employment is being ended. There are, however, some situations where an employer can not terminate a staff member’s work even if the employer is prepared to give proper written notification or termination pay. For example, a company can not end someone’s employment, or punish them in any other way, if any part of the factor for the termination of work is based on the staff member asking questions about the ESA or working out 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.

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: workers who are guilty of wilful misbehavior, disobedience, or wilful overlook of duty that is not insignificant and has not been excused by the employer. Other examples consist of building staff members, workers on short-lived layoff, workers who refuse a deal of affordable alternative employment and staff members who have been employed less than three months.

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

The termination-of-employment rules are totally separate from any entitlements a staff member might have to be paid discontinuance wage under the ESA.

Constructive termination

A constructive termination may take place when a company makes a substantial modification to a fundamental term or condition of an employee’s work without the employee’s actual or implied authorization.

For example, an employee might be constructively dismissed if the employer makes changes to the employee’s terms of work that lead to a significant decrease in income or a considerable negative modification in such things as the employee’s work place, hours of work, authority, or position. Constructive termination may also consist of circumstances where an employer harasses or abuses an employee, or a company gives an employee a demand to “quit or be fired” and the staff member resigns in action.

The employee would need to resign in response to the modification within an affordable time period in order for the company’s actions to be thought about a termination of work for functions of the ESA.

Constructive termination is a complex and hard subject. For more details on useful termination, please get in touch with the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

An employee is on temporary layoff when an employer cuts down or stops the worker’s work without ending their employment (for example, laying someone off at times when there is not sufficient work to do). The mere fact that the company does not define a recall date when laying the staff member off does not always indicate that the lay-off is not short-term. Note, nevertheless, that a lay-off, even if intended to be short-lived, might lead to constructive termination 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 staff member earned less than half of what they would normally earn (or makes on average) in a week.

A week of layoff does not include any week in which the worker did not work for one or more days since the staff member was unable or offered to work, was subject to disciplinary suspension, or was not supplied with work since of a strike or lockout at their place of work or elsewhere.

Employers are not required under the ESA to provide staff members with a composed notice of a short-lived layoff, nor do they have to supply a reason for the lay-off. (They may, however, be required to do these things under a cumulative arrangement or a work agreement.)

Under the ESA, a “short-lived 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 period of 20 consecutive weeks, but less than 35 weeks of layoff in any duration of 52 consecutive weeks, where:- the worker continues to get considerable payments from the company;
or

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

– the staff member receives supplemental unemployment advantages;
or

– the worker would be entitled to receive supplemental joblessness benefits but isn’t receiving them because they are used somewhere else;
or

– the company recalls the employee 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 a contract 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 an employee who is represented by a trade union within the time set out in an arrangement in between the union and the .

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

Written notification of termination and employment termination pay

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

– the employer has provided the staff member appropriate composed notice of termination and the notice period has expired

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

Written notification of termination

A worker is entitled to observe of termination (or termination pay instead of notice) if they have been continuously utilized for at least 3 months. A person is thought about “used” not just while they are actively working, however also throughout any time 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 amount of notice to which a staff member is entitled depends on their “duration of employment”. An employee’s duration of employment includes not only perpetuity while the worker is actively working but likewise any time that they are not working however the employment 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 considered) to have been terminated on the first day of the lay-off-any time after that does not count as part of the employee’s period of employment, even though the worker may still be utilized for purposes of the “continually used for 3 months” certification

– if 2 separate periods of work are separated by more than 13 weeks, just the most current period counts for purposes of notice of termination

It is possible, in some circumstances, for a person to have actually been “continually employed” for three months or more and yet have a duration of employment of less than 3 months. In such scenarios, the employee would be entitled to observe due to the fact that an employee who has been constantly employed for a minimum of three months is entitled to observe, and the minimum notice privilege of one week applies to a worker with a duration of employment of any length less than one year.

The following chart defines the quantity of notice needed:

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

Requirements throughout the statutory notice period

During the statutory notification period, an employer needs to:

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

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

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

Regular rate

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

Regular earnings

These are earnings besides overtime pay, vacation pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of task pay, termination pay and severance pay and particular legal entitlements.

Regular work week

For a staff member who generally works the very same number of hours each 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 exact same number of hours each week or they are paid on a basis besides time. For these workers, the “regular earnings” for a “regular work week” is the average amount of the routine wages earned by the staff member in the weeks in which the employee worked during the duration of 12 weeks right away preceding the date the notice was given.

An employer is not allowed to set up a worker’s vacation time during the statutory notification period unless the employee-after receiving composed notice of termination of employment-agrees to take their vacation time during the notification duration.

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

How to supply written notification

In most cases, written notice of termination of work must be addressed to the employee. It can be supplied in individual or by mail, fax or e-mail, as long as delivery can be verified.

There are special guidelines for providing notification of termination if a staff member has an agreement of work or a collective agreement that supplies seniority rights that permit an employee who is to be laid off or whose work is to be ended to displace (” bump”) other staff members.

In that case, the company must post a notification in the workplace (where it will be seen by the staff members) setting out the names, seniority and job classification of those employees the company plans to terminate and the date of the proposed termination. The posting of the notification is considered to be notice of termination, since the date of the posting, to a worker who is “bumped” by a staff member named in the notification. However, this notice of termination need to still meet the length requirements set out in the ESA.

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

Termination pay

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

Example: Regular work week

Sarah has worked for three and a half years. Now her job has actually been eliminated and her employment has actually been ended. Sarah was not given any written notification of termination.

Sarah worked 40 hours a week every week and was paid $20.00 an hour. She also received four percent vacation pay. Because she worked for more than three years but less than four years, she is entitled to 3 weeks’ pay in lieu of notification.

Sarah’s regular incomes 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 determined:

4% of $2,400.00 = $96.00

Finally, her holiday pay is included 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 strategies that used to her for 3 weeks.

Example: No routine work week

Gerry has worked at a retirement home for four years. He works every week, employment but his hours vary from week to week. His rate of pay is $25.00 an hour, and he is paid 6 per cent holiday pay.

Gerry’s company eliminated his position and employment did not offer Gerry any written notice of termination. Gerry was ill and off work for 2 of the 12 weeks right away 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 4 weeks of termination pay.

Gerry’s typical earnings each week are computed:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off sick for two weeks therefore these weeks are not included in the calculation of average earnings) = $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 getaway pay is added to his termination pay:

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer must also guarantee ongoing protection for any benefit or pension strategies that applied to him for 4 weeks.

When to pay termination pay

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

Mass termination

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

Meaning of “facility”

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

– they lie within the exact same municipality, or

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

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

This will require that workers who work specifically from another location be thought about for addition in the count when figuring out whether 50 or employment more staff members have actually been terminated.

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

Example: where several locations are thought about one “establishment”

ABC Company has a workplace and a storage facility situated in London, ON. Sabrina lives in London and works for ABC Company exclusively from another location: she carries out work for the business from home and does not work at the workplace.

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

Employer commitments in a mass termination

When a mass termination occurs, the company must finish and deliver the Form 1 (Notice of termination of employment) to the Director of Employment Standards (Director) by:

– email to esa_form1_notice@ontario.ca.

– fax to (416) 326-7061.

– individual 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 validated.

The office of the Director of Employment Standards is located on the 9th floor, 400 University Avenue, Toronto ON M7A 1T7.

Any notice to the impacted workers is ruled out to have actually been offered until the Form 1 is received by the Director; to put it simply, notification of mass termination is not reliable until the Director gets the Form 1.

In addition to providing workers with individual notifications of termination, employment the employer must, on the very first day of the notice duration:

– publish a copy of the Form 1 offered to the Director in the office where it will come to the attention of the affected workers.

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

The quantity of notification staff members should get in a mass termination is not based on the employees’ length of work, however on the variety of staff members who have been terminated. An employer must offer:

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

– 12 weeks notice if the employment of 200 to 499 workers is to be ended

– 16 weeks discover if the employment of 500 or more workers is to be ended

Exception to the mass termination guidelines

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

– the number of workers whose employment is being ended represents not more than 10 percent of the staff members who have actually been employed for at least three months at the facility

– none of the terminations are brought on by the irreversible discontinuance of all or part of the company’s company at the facility

Mass termination: resignation by an employee

An employee who has actually gotten termination notification under the mass termination guidelines who wishes to resign before the termination date provided in the employer’s notification should offer the company at least one week’s written notice of resignation if the worker has actually been employed for less than two years. If the work period has been 2 years or more, the staff member needs to offer at least two weeks’ written notice of resignation. However, the worker does not need to provide notification of resignation if the company constructively dismisses the staff member or breaches a regard to the contract.

Temporary work after termination date in notice

A company can supply work to a worker who has been offered notification of termination on a momentary 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 additional notification of termination to the employee when the short-term work ends.

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

Recall rights

A “recall right” is the right of an employee on a layoff to be recalled to work by their company under a term or condition of employment. 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 pick to:

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

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

If a staff member is entitled to both termination pay and severance pay, they need to make the exact same option for both.

If a worker who is not represented by a trade union chooses to keep their recall rights or stops working to make a choice, the employer needs to send the amount of the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If a worker who is represented by a trade union elects to keep their recall rights or fails to make an option, the employer and the trade union should try to come to a plan to hold the termination pay (and severance pay, if any) in trust for the worker. If they can not pertain to an arrangement, and the trade union recommends the company and the Director of Employment Standards in composing that efforts have actually stopped working, the company must send the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the money in trust.

If an employee selects to provide up their recall rights or if the recall rights end, the cash that is held in trust needs to be sent out to the staff member.

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

Exemptions to see 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 need more information. Please also describe the unique rule tool.

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

– is guilty of wilful misconduct, disobedience or wilful overlook of responsibility that is not unimportant and has not been condoned by the company. Note: “wilful” consists of when an employee planned 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 unexpected or unintentional is typically not considered wilful;

– was worked with for a specific length of time or till the completion of a specific task. However, such a staff member will be entitled to discover of termination or termination pay if:- the work ends before the term ends or the job is finished; or

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

– the work continues for three months or more after the term ends or the job is finished;

See also: Employment Standards Self-Service Tool

Wrongful dismissal

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

The rules under the ESA about termination and severance of work are minimum requirements. Some staff members might have rights under the typical law that are greater than the rights to notice of termination (or termination pay) and severance pay under the ESA. An employee might wish to sue their former employer in court for “wrongful dismissal”. Employees should understand that they can not take legal action against an employer for wrongful dismissal and file a claim for termination pay or employment discontinuance wage with the ministry for the very same termination or severance of work. A worker should pick one or the other. Employees may want to obtain legal advice concerning their rights.