Termination Of Employment

A number of expressions are commonly used to explain circumstances when work is ended. These include “let go,” “discharged,” “dismissed,” “fired” and “permanently laid off.”

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

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

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

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

In many cases, when a company ends the work of a staff member who has actually been continually used for 3 months, the employer must offer the worker with either composed notice of termination, termination pay or a combination (as long as the notice and the variety of weeks of termination pay together equivalent the length of notification the staff member is entitled to receive).

The ESA does not require an employer to offer a worker a factor why their employment is being ended. There are, nevertheless, some circumstances where a company can not terminate a worker’s work even if the company is prepared to give correct composed notification or termination pay. For instance, a company can not end somebody’s work, or punish them in any other way, if any part of the reason for the termination of employment is based upon the worker asking concerns about the ESA or working out a right under the ESA, such as declining to work in excess of the everyday or weekly hours of work optimums, or taking a leave of absence specified in the ESA. Please see the chapter on reprisals.

Qualifying for termination notification or pay in lieu

Certain staff members are not entitled to see of termination or termination pay under the ESA. Examples consist of: employees who are guilty of wilful misconduct, disobedience, or wilful disregard of duty that is not unimportant and has actually not been excused by the employer. Other examples include building and construction workers, employees on temporary layoff, workers who refuse a deal of reasonable alternative work and staff members who have been utilized less than three months.

There are a number of other exemptions to the termination of work arrangements of the ESA. See “Exemptions to see of termination or termination pay.” Please likewise refer to the special guideline tool.

The termination-of-employment guidelines are totally separate from any entitlements a worker may need to be paid severance pay under the ESA.

Constructive termination

A constructive termination might occur when an employer makes a significant change to a basic term or condition of a worker’s work without the staff member’s real or implied approval.

For instance, a worker might be constructively dismissed if the employer makes modifications to the staff member’s conditions of work that result in a significant decrease in salary or a considerable unfavorable change in such things as the employee’s work place, hours of work, authority, or position. Constructive dismissal may also include situations where an employer bugs or abuses a worker, or an employer provides a worker a warning to “stop or be fired” and the employee resigns in reaction.

The employee would need to resign in reaction to the change within an affordable duration of time in order for the employer’s actions to be thought about a termination of work for functions of the ESA.

Constructive termination is a complex and challenging subject. For more details on useful dismissal, please call the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

An employee is on temporary layoff when a company cuts down or stops the employee’s work without ending their work (for instance, laying someone off at times when there is not adequate work to do). The simple truth that the company does not define a recall date when laying the employee off does not always imply that the lay-off is not short-term. Note, however, that a lay-off, even if meant to be short-term, may result in positive dismissal if it is not allowed by the work agreement.

For the functions of the termination provisions 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 earns usually) in a week.

A week of layoff does not include any week in which the staff member did not work for several days since the worker was unable or available to work, underwent disciplinary suspension, or was not supplied with work due to the fact that of a strike or lockout at their place of work or in other places.

Employers are not required under the ESA to supply workers with a composed notification of a temporary layoff, nor do they need to provide a factor for the lay-off. (They may, however, be required to do these things under a cumulative contract or a work contract.)

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

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

– the staff member gets supplemental welfare;
or

– the employee would be entitled to receive additional welfare however isn’t receiving them since they are used somewhere else;
or

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

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

3. a layoff longer than a layoff explained in ‘B’ where the employer recalls a staff member who is represented by a trade union within the time set out in an agreement between the union and the employer.

If an employee is laid off for a period longer than a momentary layoff as set out above, the company is considered to have ended the staff member’s employment. Generally, the staff member will then be entitled to termination pay.

Written notification of termination and termination pay

Under the ESA, an employer can terminate the employment of a staff member who has been used constantly for 3 months or more if either:

– the employer has actually provided the employee correct composed notice of termination and the notification period has actually ended

– the employer pays termination pay to the employee where no written notice or less notice than is required is provided

Written notification of termination

A staff member is entitled to see of termination (or termination pay instead of notification) if they have been continuously employed for at least three months. An individual is considered “utilized” not only while they are actively working, but likewise throughout at any time in which they are not working but the employment relationship still exists (for instance, time in which the worker is off sick or on leave or on lay-off).

The quantity of notification to which a staff member is entitled depends on their “period of work”. An employee’s period of employment consists of not only all time while the employee is actively working however also 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-lived lay-off, the employee’s employment is considered (or considered) to have actually been ended 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 staff member might still be used for functions of the “continually utilized for three months” qualification

– if two separate durations of employment are separated by more than 13 weeks, just the most current duration counts for purposes of notice of termination

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

The following chart defines the amount of notification needed:

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

Requirements during the statutory notification duration

During the statutory notification period, an employer needs to:

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

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

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

These are salaries aside from overtime pay, holiday pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and severance pay and particular legal privileges.

Regular work week

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

Some employees do not have a routine work week. That is, they do not work the very same number of hours each week or they are paid on a basis aside from time. For these employees, the “regular earnings” for a “routine work week” is the average quantity of the regular earnings earned by the worker in the weeks in which the staff member worked during the duration of 12 weeks right away preceding the date the notice was provided.

An employer is not allowed to schedule a worker’s getaway time during the statutory notice duration unless the employee-after receiving written notification of termination of employment-agrees to take their getaway time during the notification duration.

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

How to offer written notice

Most of the times, written notification of termination of employment must be addressed to the worker. It can be provided personally or by mail, fax or e-mail, as long as shipment can be confirmed.

There are special guidelines for offering notification of termination if a worker has a contract of employment or a cumulative arrangement that offers seniority rights that enable an employee who is to be laid off or whose employment is to be ended to displace (” bump”) other workers.

In that case, the employer should post a notice in the workplace (where it will be seen by the employees) setting out the names, seniority and task category of those staff members the employer plans to terminate and the date of the proposed termination. The publishing of the notification is considered to be notification of termination, as of the date of the posting, to a staff member who is “bumped” by a worker called in the notice. However, this notice of termination should still fulfill the length requirements set out in the ESA.

There are also special rules relating to how notification is offered when there is a mass termination.

Termination pay

An employee who does not receive the written notification required under the ESA must be offered termination pay in lieu of notice. Termination pay is a swelling sum payment equal to the regular salaries for a routine work week that a worker would otherwise have actually been entitled to throughout the written notice duration. An employee earns trip pay on their termination pay. Employers should also continue to make whatever contributions would be needed to keep the advantages the staff member would have been entitled to had they continued to be employed through the notice duration.

Example: Regular work week

Sarah has worked for 3 and a half years. Now her job has been eliminated and her employment has actually been ended. Sarah was not offered any written notice of termination.

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

Sarah’s regular incomes for a routine work week are calculated:

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

Her termination pay is calculated:

$ 800.00 X 3 weeks = $2,400.00

Then her trip pay on her termination pay is computed:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The employer must likewise guarantee continued coverage for any advantage or pension strategies that applied to her for 3 weeks.

Example: No regular work week

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

Gerry’s employer removed his position and did not provide Gerry any composed notice of termination. Gerry was ill and off work for 2 of the 12 weeks immediately preceding the day his employment was terminated. Gerry earned $1,800.00 in the 12 weeks before the day on which his work ended.

Gerry is entitled to four weeks of termination pay.

Gerry’s typical earnings weekly are calculated:

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

His termination pay is computed:

$ 180.00 × 4 weeks = $720.00

Then his trip pay on his termination pay is determined:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer needs to likewise guarantee continued protection for any benefit or pension that used to him for 4 weeks.

When to pay termination pay

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

Mass termination

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

Meaning of “facility”

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

– they are located within the exact same municipality, or

– an employee at one location has legal seniority rights that extend to the other location, enabling the staff member to displace another worker (likewise called “bumping rights”).

Effective October 26, 2023, in cases of mass termination, the term “establishment” consists of an employee’s home, however only if the staff member works from home and does not operate at any other location where the employer continues service.

This will require that staff members who work solely remotely be considered for inclusion in the count when out whether 50 or more employees have been ended.

Note that where a worker performs work both from their home and from another location where the employer continues company (for example, an office), their home is not consisted of in the definition of “facility”. Instead, the staff member is thought about to have a connection to the office area and, therefore, for the purpose of mass termination, the worker is consisted of with regard to that workplace place.

Example: where multiple areas are considered one “facility”

ABC Company has an office and a warehouse located in London, ON. Sabrina lives in London and employment works for ABC Company exclusively from another location: she performs work for the business from home and does not operate at the office.

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

Employer responsibilities in a mass termination

When a mass termination takes place, the employer needs to finish and deliver 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 office, if the delivery 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 affected workers is not thought about to have been provided up until the Form 1 is gotten by the Director; simply put, notification of mass termination is ineffective up until the Director receives the Form 1.

In addition to supplying workers with private notices of termination, the company must, on the first day of the notice duration:

– post a copy of the Form 1 supplied to the Director in the workplace where it will come to the attention of the impacted staff members.

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

The amount of notice workers need to receive in a mass termination is not based upon the workers’ length of work, however on the variety of staff members who have been terminated. An employer needs to provide:

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

– 12 weeks observe if the employment of 200 to 499 employees is to be ended

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

Exception to the mass termination rules

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

– the variety of employees whose work is being terminated represents not more than 10 percent of the staff members who have actually been employed for at least 3 months at the facility

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

Mass termination: resignation by a staff member

An employee who has actually received termination notice under the mass termination guidelines who wants to resign before the termination date provided in the employer’s notice should give the employer a minimum of one week’s composed notification of resignation if the staff member has actually been employed for less than 2 years. If the employment duration has actually been 2 years or more, the staff member needs to give a minimum of two weeks’ written notification of resignation. However, the worker does not have to give notification of resignation if the employer constructively dismisses the staff member or breaches a regard to the agreement.

Temporary work after termination date in notification

A company can supply work to a worker who has actually been provided notice of termination on a momentary basis in the 13-week period after the termination date set out in the notification without impacting the original date of the termination and without being required to supply any additional notification of termination to the employee when the temporary work ends.

If a staff member works beyond the 13-week period after the termination date and after that has their employment ended, the worker will be entitled to a brand-new written notice of termination as if the previous notification had never been provided. The worker’s duration of employment will then likewise consist of the period 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 company under a term or condition of work. This right is frequently found in collective agreements.

A staff member 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 select 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

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

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

If a staff member who is not represented by a trade union elects to keep their recall rights or stops working to make an option, the employer should send out the quantity 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 fails to choose, the company and the trade union should attempt to come to an arrangement to hold the termination pay (and discontinuance wage, if any) in trust for the worker. If they can not come to a plan, and the trade union advises the employer and the Director of Employment Standards in writing that efforts have failed, the company needs to send the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

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

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

Exemptions to discover of termination or termination pay

A lot of these exemptions are complicated. Please contact the Employment Standards Information Centre, 1-800-531-5551, if you require more info. Please likewise describe the special rule 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 neglect of responsibility that is not insignificant and has actually not been condoned by the company. Note: “wilful” consists of when a staff member meant the resulting consequence or acted recklessly if they knew or must have understood the effects their conduct would have. Poor work conduct that is accidental or unintended is usually ruled out wilful;

– was employed for a particular length of time or until the completion of a specific task. 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 completed; or

– the term expires or the task is not completed more than 12 months after the work began; or

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

See also: Employment Standards Self-Service Tool

Wrongful termination

Rights higher 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 common law that are higher than the rights to discover of termination (or termination pay) and discontinuance wage under the ESA. An employee might wish to sue their previous company in court for “wrongful dismissal”. Employees should know that they can not take legal action against a company for wrongful termination and file a claim for termination pay or discontinuance wage with the ministry for the very same termination or employment severance of employment. A staff member should select one or the other. Employees might wish to obtain legal suggestions worrying their rights.