Termination Of Employment

A variety of expressions are commonly utilized to explain scenarios when employment is terminated. These consist of “release,” “released,” “dismissed,” “fired” and “completely laid off.”

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

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

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

– lays a worker off for a duration that is longer than a “short-lived layoff”.

Most of the times, when an employer ends the work of a staff member who has actually been continually utilized for 3 months, the employer must supply the staff member with either written notice of termination, termination pay or a combination (as long as the notice and the number of weeks of termination pay together equivalent the length of notice the worker is entitled to receive).

The ESA does not require a company to provide a staff member a reason that their work is being terminated. There are, however, some circumstances where an employer can not end a staff member’s work even if the employer is prepared to give appropriate written notice or termination pay. For example, an employer can not end someone’s work, or punish them in any other method, if any part of the reason for the termination of employment is based upon the employee asking questions about the ESA or exercising a right under the ESA, such as refusing to work in excess of the daily or weekly hours of work maximums, or taking a leave of lack specified in the ESA. Please see the chapter on reprisals.

Receiving termination notification or pay in lieu

Certain workers are not entitled to see of termination or employment termination pay under the ESA. Examples consist of: workers who are guilty of wilful misbehavior, disobedience, or wilful neglect of duty that is not insignificant and has not been condoned by the company. Other examples consist of building and construction workers, staff members on short-lived layoff, workers who refuse a deal of reasonable alternative work and staff members who have actually been utilized less than 3 months.

There are a variety of other exemptions to the termination of work arrangements of the ESA. See “Exemptions to notice of termination or termination pay.” Please likewise describe the unique rule tool.

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

Constructive termination

A positive termination might happen when an employer makes a significant change to an essential term or condition of an employee’s work without the employee’s actual or implied permission.

For instance, a staff member might be constructively dismissed if the employer makes modifications to the staff member’s conditions of work that lead to a considerable reduction in income or a considerable negative change in such things as the staff member’s work place, hours of work, authority, or position. Constructive termination may likewise include circumstances where an employer bothers or abuses an employee, or an employer gives an employee a demand to “give up or be fired” and the staff member resigns in reaction.

The employee would need to resign in action to the modification within a reasonable duration 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 hard topic. For more details on constructive termination, please call the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

An employee is on short-term layoff when an employer cuts back or stops the employee’s work without ending their work (for instance, laying somebody off sometimes when there is insufficient work to do). The mere reality 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 temporary. Note, nevertheless, that a lay-off, even if intended to be short-term, might lead to constructive dismissal if it is not permitted by the employment agreement.

For the purposes of the termination provisions of the ESA, a “week of layoff” is a week in which the employee earned less than half of what they would normally earn (or earns on average) in a week.

A week of layoff does not consist of any week in which the worker did not work for several days since the employee was unable or readily available to work, underwent disciplinary suspension, or was not supplied with work since of a strike or lockout at their place of employment or in other places.

Employers are not needed under the ESA to provide employees with a written notice of a short-lived layoff, nor do they need to provide a factor for the lay-off. (They may, nevertheless, be needed to do these things under a collective contract 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 successive weeks, however less than 35 weeks of layoff in any period of 52 consecutive weeks, where:- the employee continues to get considerable payments from the company;
or

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

– the staff member gets extra joblessness advantages;
or

– the employee would be entitled to get extra unemployment benefits but isn’t getting them due to the fact that they are utilized in other places;
or

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

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

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

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

Written notice of termination and termination pay

Under the ESA, a company can end the employment of a staff member who has actually been employed continually for three months or more if either:

– the employer has given the worker correct composed notification of termination and the notification period has actually ended

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

Written notification of termination

An employee is entitled to notice of termination (or termination pay instead of notification) if they have actually been continually used for at least three months. An individual is considered “utilized” not just while they are actively working, but likewise throughout whenever in which they are not working but the work relationship still exists (for instance, time in which the worker is off ill or on leave or on lay-off).

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

– if a lay-off goes on longer than a momentary lay-off, the worker’s employment is considered (or considered) to have been terminated on the very first day of the lay-off-any time after that does not count as part of the employee’s duration of work, despite the fact that the worker might still be employed for purposes of the “continually utilized for three months” certification

– if 2 separate durations of work are separated by more than 13 weeks, only the most current period counts for purposes of notification of termination

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

The following chart defines the amount of notice required:

Note: Special rules determine the quantity of notification needed in the case of mass terminations – where the employment of 50 or more workers is terminated at a company’s establishment within a four-week period.

Requirements during the statutory notice period

During the statutory notification period, an employer must:

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

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

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

Regular rate

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

Regular earnings

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

Regular work week

For a worker who usually works the same variety of hours each week, a regular work week is a week of that lots of hours, not including overtime hours.

Some staff members do not have a regular work week. That is, they do not work the exact same variety of hours each week or they are paid on a basis besides time. For these workers, the “regular earnings” for a “routine work week” is the average amount of the routine salaries made by the staff member in the weeks in which the staff member worked during the duration of 12 weeks right away preceding the date the notice was provided.

A company is not enabled to schedule a worker’s getaway time throughout the statutory notice duration unless the employee-after receiving composed notice of termination of employment-agrees to take their trip time during the notification period.

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

How to supply written notice

Most of the times, composed notification of termination of employment must be addressed to the staff member. It can be provided in individual or by mail, fax or e-mail, as long as shipment can be confirmed.

There are special rules for employment supplying notification of termination if an employee has a contract of employment or a collective contract that provides seniority rights that enable an employee who is to be laid off or whose employment is to be terminated to displace (” bump”) other workers.

Because case, the company needs to post a notification in the workplace (where it will be seen by the staff members) setting out the names, seniority and task classification of those workers the company means to terminate and the date of the proposed termination. The publishing of the notification is thought about to be notice of termination, since the date of the posting, to an employee who is “bumped” by a worker called in the notification. However, this notice of termination should still meet the length requirements set out in the ESA.

There are also unique guidelines relating to 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 must be given termination pay in lieu of notification. Termination pay is a lump sum payment equivalent to the regular wages for a regular work week that an employee would otherwise have actually been entitled to throughout the written notice period. A worker earns vacation pay on their termination pay. Employers should likewise continue to make whatever contributions would be required to keep the advantages the staff member would have been entitled to had they continued to be utilized through the notification duration.

Example: Regular work week

Sarah has worked for three and a half years. Now her job has been gotten rid of and her work has been terminated. 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 received four per cent vacation pay. Because she worked for more than three years however less than 4 years, she is entitled to three weeks’ pay in lieu of notice.

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 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 must also ensure ongoing coverage for any benefit or pension 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 per cent vacation pay.

Gerry’s employer removed his position and did not offer Gerry any composed notification of termination. Gerry was ill and off work for two 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 four weeks of termination pay.

Gerry’s average profits weekly are calculated:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for 2 weeks for that reason these weeks are not included in the computation of average revenues) = $180.00 a week

His termination pay is determined:

$ 180.00 × 4 weeks = $720.00

Then his holiday pay on his termination pay is computed:

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 needs to likewise ensure ongoing protection for any advantage or pension that used to him for 4 weeks.

When to pay termination pay

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

Mass termination

Special rules for notice of termination might use in cases of mass termination (when an employer is terminating 50 or more employees at its facility within a four-week period).

Meaning of “establishment”

An “establishment” is a location at which the employer continues business. Separate places can be thought about one facility if either:

– they are situated within the same municipality, or

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

Effective October 26, 2023, in cases of mass termination, the term “establishment” consists of a worker’s home, but just if the worker works from home and does not operate at any other area where the employer brings on business.

This will require that employees who work solely from another location be considered for inclusion in the count when identifying whether 50 or 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 employer continues company (for example, a workplace), their home is not included in the definition of “establishment”. Instead, the staff member is considered to have a connection to the office place and, for that reason, for the purpose of mass termination, the employee is included with regard to that workplace location.

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

ABC Company has an office and a warehouse located in London, ON. Sabrina lives in London and works for ABC Company solely remotely: she carries out work for the business from home and does not work at the office.

For the function of mass termination, the business’s London workplace, London storage facility and Sabrina’s London home are thought about one “facility.”

Employer obligations in a mass termination

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

– e-mail to esa_form1_notice@ontario.ca.

– fax to (416) 326-7061.

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

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

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

Any notice to the impacted staff members is not thought about to have been offered until the Form 1 is received by the Director; in other words, notice of mass termination is ineffective up until the Director receives the Form 1.

In addition to providing workers with private notifications of termination, 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 workplace where it will come to the attention of the impacted workers.

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

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

– 8 weeks notice if the employment of 50 to 199 staff members is to be ended

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

– 16 weeks notice if the work of 500 or more employees is to be terminated

Exception to the mass termination guidelines

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

– the variety of workers whose work is being ended represents not more than 10 per cent of the employees who have been used for a minimum of three months at the establishment

– none of the terminations are brought on by the long-term discontinuance of all or part of the employer’s service at the establishment

Mass termination: resignation by a worker

An employee who has received termination notification under the mass termination rules who desires to resign before the termination date offered in the company’s notification should provide the company a minimum of one week’s composed notice of resignation if the staff member has actually been utilized for less than 2 years. If the work period has been two years or more, the staff member must offer a minimum of two weeks’ composed notification of resignation. However, the employee does not have to notify of resignation if the company constructively dismisses the employee or breaches a regard to the agreement.

Temporary work after termination date in notification

An employer can supply work to an employee who has been given notification of termination on a short-term basis in the 13-week duration after the termination date set out in the notification without impacting the initial date of the termination and without being needed to provide any more notice of termination to the worker when the short-term work ends.

If a staff member works beyond the 13-week period after the termination date and then has their work ended, the staff member will be entitled to a brand-new composed notification of termination as if the previous notification had never ever been offered. The employee’s period of work will then likewise include the duration of short-term 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 discovered in collective arrangements.

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 not be paid termination pay (or severance pay, if they were entitled to discontinuance wage) at that time;
or

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

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

If an employee who is not represented by a trade union elects to keep their recall rights or fails to decide, the company must send the quantity of the termination pay (and severance pay, 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 a choice, the employer and the trade union must try to come to a plan to hold the termination pay (and employment discontinuance wage, if any) in trust for the worker. If they can not concern an arrangement, and the trade union encourages the employer and the Director employment of Employment Standards in writing that efforts have failed, the company should send the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If a worker chooses to offer up their recall rights or if the recall rights end, the cash that is kept in trust should be sent to the employee.

If the employee accepts a recall back to work, the cash that is kept in trust will be gone back to the employer.

Exemptions to notice of termination or termination pay

A number of these exemptions are complicated. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you need more information. Please also describe the unique guideline tool.

The notice 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 neglect of responsibility that is not insignificant and has actually not been condoned by the company. Note: “wilful” includes when a staff member planned the resulting effect or acted recklessly if they knew or need to have understood the results their conduct would have. Poor work conduct that is unexpected or unintended is usually not considered wilful;

– was worked with for a specific length of time or up until the completion of a specific task. However, such a worker 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 expires or the task is not finished more than 12 months after the employment started; or

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

See likewise: Employment Standards Self-Service Tool

Wrongful dismissal

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 may have rights under the typical law that are higher than the rights to see of termination (or termination pay) and discontinuance wage under the ESA. A worker might wish to sue their former employer in court for “wrongful termination”. Employees need to be mindful that they can not sue a company for wrongful termination and submit a claim for termination pay or discontinuance wage with the ministry for the very same termination or severance of work. An employee needs to select one or the other. Employees may wish to acquire legal advice worrying their rights.