Termination Of Employment

A variety of expressions are typically utilized to describe situations when employment is ended. These consist of “let go,” “released,” “dismissed,” “fired” and “permanently laid off.”

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

– dismisses or stops using a staff member, including where an employee is no longer used due to the personal bankruptcy or insolvency of the employer;

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

– lays an employee off for a period that is longer than a “short-term layoff”.

In a lot of cases, when an employer ends the work of a staff member who has been constantly utilized for three months, the employer needs to supply the worker 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 equal the length of notification the employee is entitled to receive).

The ESA does not require a company to provide an employee a reason their employment is being terminated. There are, however, some situations where a company can not terminate an employee’s work even if the employer is prepared to provide correct written notification or termination pay. For example, an employer 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 on the staff member 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 employment taking a leave of absence specified in the ESA. Please see the chapter on reprisals.

Getting approved for termination notice or pay in lieu

Certain staff members are not entitled to notice of termination or termination pay under the ESA. Examples include: employees who are guilty of wilful misconduct, disobedience, or wilful overlook of responsibility that is not trivial and has not been condoned by the employer. Other examples consist of building workers, workers on temporary layoff, workers who decline an offer of sensible alternative employment and staff members who have actually been employed less than three months.

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

The termination-of-employment rules are completely different from any privileges a worker may need to be paid discontinuance wage under the ESA.

Constructive dismissal

A positive termination might take place when an employer makes a significant change to a basic term or condition of a worker’s work without the worker’s actual or implied consent.

For instance, a staff member might be constructively dismissed if the employer makes changes to the staff member’s terms and conditions of work that lead to a substantial decrease in wage or a substantial negative change in such things as the employee’s work area, hours of work, authority, or position. Constructive dismissal may also include scenarios where a company pesters or abuses a staff member, or a company gives a worker an ultimatum to “quit or be fired” and the worker resigns in reaction.

The staff member would have to resign in action to the change within an affordable time period in order for the company’s actions to be thought about a termination of employment for purposes of the ESA.

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

Temporary layoff

A worker is on short-term layoff when a company cuts back or stops the staff member’s work without ending their work (for instance, laying somebody off at times when there is not enough work to do). The mere fact that the company does not specify a recall date when laying the employee off does not necessarily imply that the lay-off is not temporary. Note, nevertheless, that a lay-off, even if meant to be temporary, might lead to useful dismissal if it is not allowed by the employment agreement.

For the functions of the termination provisions of the ESA, a “week of layoff” is a week in which the worker earned less than half of what they would generally earn (or makes usually) in a week.

A week of layoff does not consist of any week in which the worker did not work for one or more days since the staff member was unable or available to work, underwent 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 supply workers with a composed notice of a short-lived layoff, nor do they need to provide a reason for the lay-off. (They may, nevertheless, be needed to do these things under a collective agreement or an employment contract.)

Under the ESA, a “short-term layoff” can last:

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

2. more than 13 weeks in any period of 20 consecutive weeks, but less than 35 weeks of layoff in any duration of 52 consecutive weeks, where:- the employee continues to receive considerable payments from the employer;
or

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

– the employee receives supplementary joblessness benefits;
or

– the staff member would be entitled to get additional welfare but isn’t receiving them because they are employed somewhere else;
or

– the employer 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 arrangement with a worker who is not represented by a trade union;
or

3. a layoff longer than a layoff described in ‘B’ where the company remembers an employee who is represented by a trade union within the time set out in an agreement in between the union and the employer.

If an employee 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 employee’s employment. Generally, the worker will then be entitled to termination pay.

Written notice of termination and termination pay

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

– the company has offered the worker proper composed notification of termination and the notification duration has actually expired

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

Written notification of termination

An employee is entitled to observe of termination (or termination pay instead of notification) if they have actually been continually utilized for at least three months. A person is thought about “used” not only while they are actively working, however likewise during any time in which they are not working however the employment relationship still exists (for employment example, time in which the worker is off ill or on leave or on lay-off).

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

– if a lay-off goes on longer than a short-lived lay-off, the staff member’s employment is deemed (or thought about) to have been terminated on the first day of the lay-off-any time after that does not count as part of the employee’s duration of employment, although the worker may still be employed for functions of the “continually employed for 3 months” qualification

– if 2 different periods of employment are separated by more than 13 weeks, only the most current duration counts for purposes of notice of termination

It is possible, in some circumstances, for a person to have been “continually employed” for three months or more and yet have a period of work of less than 3 months. In such circumstances, the staff member would be entitled to observe since an employee who has actually been constantly used for a minimum of three months is entitled to discover, and the minimum notification privilege of one week uses to a worker with a period of employment of any length less than one year.

The following chart specifies the amount of notification needed:

Note: Special guidelines determine the amount of notice required when it comes to mass terminations – where the employment of 50 or more workers is ended at an employer’s facility within a four-week duration.

Requirements throughout the statutory notification duration

During the statutory notice period, an employer must:

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

– continue to make whatever contributions would be needed to maintain the worker’s advantages strategies; and

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

Regular rate

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

Regular incomes

These are wages besides overtime pay, trip pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of task pay, termination pay and discontinuance wage and specific legal privileges.

Regular work week

For a worker who normally works the very same number of hours weekly, a regular work week is a week of that numerous hours, not including overtime hours.

Some workers do not have a routine 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 staff members, the “routine incomes” for a “routine work week” is the average amount of the regular incomes made by the staff member in the weeks in which the employee worked during the period of 12 weeks immediately preceding the date the notice was given.

An employer is not allowed to arrange a staff member’s getaway time throughout the statutory notification duration unless the employee-after getting written notice of termination of employment-agrees to take their getaway time during the notification period.

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

How to supply written notice

In many cases, written notification of termination of work need to be addressed to the staff member. It can be offered face to face or by mail, fax or e-mail, as long as delivery can be confirmed.

There are unique rules for providing notice of termination if a staff member has an agreement of work or a cumulative contract that offers seniority rights that permit a worker who is to be laid off or whose work is to be ended to displace (” bump”) other employees.

In that case, the employer needs to publish a notice in the work environment (where it will be seen by the staff members) setting out the names, seniority and task category of those employees the employer intends to terminate and the date of the proposed termination. The posting of the is considered to be notice of termination, since the date of the publishing, to a staff member who is “bumped” by a worker called in the notice. However, this notice of termination must still meet the length requirements set out in the ESA.

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

Termination pay

A staff member who does not get the written notification required under the ESA should be provided termination pay in lieu of notification. Termination pay is a lump amount payment equal to the routine wages for a regular work week that an employee would otherwise have actually been entitled to throughout the written notice period. A staff member earns getaway pay on their termination pay. Employers need to likewise continue to make whatever contributions would be needed to keep the advantages the worker would have been entitled to had they continued to be utilized through the notice duration.

Example: Regular work week

Sarah has actually worked for three and a half years. Now her job has been removed and her employment 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 got 4 per cent trip pay. Because she worked for more than three years however less than four years, she is entitled to three weeks’ pay in lieu of notification.

Sarah’s regular wages for a regular 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 getaway pay on her termination pay is computed:

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 employer must likewise guarantee ongoing protection for any benefit or pension plans that used to her for three weeks.

Example: No routine work week

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

Gerry’s company removed his position and did not give Gerry any composed notification of termination. Gerry was ill and off work for two of the 12 weeks instantly preceding the day his employment was terminated. Gerry earned $1,800.00 in the 12 weeks before the day on which his employment ended.

Gerry is entitled to 4 weeks of termination pay.

Gerry’s typical revenues each 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 included in the computation of typical profits) = $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 vacation pay is contributed to his termination pay:

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company must likewise guarantee ongoing coverage for any advantage or pension plans that used to him for four weeks.

When to pay termination pay

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

Mass termination

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

Meaning of “facility”

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

– they are situated within the exact same town, or

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

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

This will need that employees who work solely remotely be thought about for addition in the count when figuring out whether 50 or more staff members have actually been ended.

Note that where a staff member performs work both from their home and from another area where the company continues organization (for example, an office), employment their home is not included in the definition of “establishment”. Instead, the staff member is considered to have a connection to the workplace area and, therefore, for the function of mass termination, the employee is included with respect to that office place.

Example: where numerous areas are considered one “facility”

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

For the purpose of mass termination, the business’s London workplace, London warehouse and Sabrina’s London home are thought about one “establishment.”

Employer obligations in a mass termination

When a mass termination occurs, the employer needs to finish 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.

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

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

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

Any notice to the impacted employees is not considered to have been given till the Form 1 is received by the Director; in other words, notice of mass termination is not efficient until the Director receives the Form 1.

In addition to offering employees with individual notices of termination, the company 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 pertain to the attention of the impacted staff members.

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

The quantity of notification staff members must receive in a mass termination is not based upon the staff members’ length of work, but on the variety of staff members who have been ended. An employer needs to offer:

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

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

– 16 weeks notice if the employment of 500 or more employees is to be ended

Exception to the mass termination guidelines

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

– the number of employees whose work is being ended represents not more than 10 percent of the employees who have actually been employed for a minimum of three months at the facility

– none of the terminations are triggered by the permanent discontinuance of all or part of the company’s company at the establishment

Mass termination: resignation by an employee

A staff member who has received termination notification under the mass termination rules who wishes to resign before the termination date offered in the company’s notification must give the employer a minimum of one week’s composed notice of resignation if the staff member has been used for less than 2 years. If the employment period has been two years or more, the worker should offer a minimum of two weeks’ written notification of resignation. However, the staff member does not need to notify of resignation if the company constructively dismisses the employee or breaches a term of the contract.

Temporary work after termination date in notice

A company can offer work to an employee who has actually been notified of termination on a short-lived basis in the 13-week duration after the termination date set out in the notice without impacting the initial date of the termination and without being required to offer any more notification of termination to the staff member when the short-term work ends.

If a worker works beyond the 13-week duration after the termination date and after that has their work ended, the employee will be entitled to a new written notification of termination as if the previous notification had never been offered. The employee’s period of employment will then also 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 typically found in cumulative contracts.

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

– offer up their recall rights and get termination pay (and severance pay, if they were entitled to severance pay).

If an employee is entitled to both termination pay and discontinuance wage, they need to make the same option for both.

If a staff member who is not represented by a trade union chooses to keep their recall rights or fails to choose, the employer should 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 need to try to come to an arrangement 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 advises the company and the Director of Employment Standards in writing that efforts have failed, the employer must 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 quit their recall rights or if the recall rights expire, the cash that is kept in trust should be sent out to the worker.

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

Exemptions to notice of termination or termination pay

Much of these exemptions are complicated. Please call the Employment Standards Information Centre, 1-800-531-5551, if you need more info. Please likewise describe the special guideline tool.

The notification of termination and termination pay requirements of the ESA do not use to a staff member who:

– is guilty of wilful misconduct, disobedience or wilful disregard of responsibility that is not minor and has not been excused by the employer. Note: “wilful” consists of when a staff member planned the resulting effect or acted recklessly if they knew or should have understood the impacts their conduct would have. Poor work conduct that is accidental or unintended is normally ruled out wilful;

– was worked with for a particular length of time or up until the completion of a particular task. However, such a staff member will be entitled to observe 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 completed more than 12 months after the employment began; or

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

See also: Employment Standards Self-Service Tool

Wrongful termination

Rights greater than ESA notice of termination, termination pay, severance pay

The rules under the ESA about termination and severance of work are minimum requirements. Some employees might have rights under the typical law that are greater than the rights to see of termination (or termination pay) and discontinuance wage under the ESA. An employee may desire to sue their former employer in court for “wrongful dismissal”. Employees must know that they can not sue a company for employment wrongful termination and file a claim for termination pay or severance pay with the ministry for the same termination or severance of work. A staff member must select one or the other. Employees might want to acquire legal suggestions concerning their rights.