Termination Of Employment

A variety of expressions are frequently utilized to describe scenarios when employment is ended. These include “let go,” “discharged,” “dismissed,” “fired” and “completely laid off.”

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

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

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

– lays an employee off for a duration that is longer than a “momentary layoff”.

In many cases, when a company ends the work of a worker who has been continually used for three months, the company should offer the employee with either written notice of termination, termination pay or a combination (as long as the notice and the variety of weeks of termination pay together equal the length of notification the staff member is entitled to get).

The ESA does not require an employer to give a worker a reason their work is being ended. There are, nevertheless, some situations where an employer can not terminate a staff member’s work even if the company is prepared to provide proper composed notification or termination pay. For example, an employer can not end someone’s employment, or punish them in any other method, if any part of the reason for the termination of work is based on the employee asking questions 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 maximums, or taking a leave of lack specified in the ESA. Please see the chapter on reprisals.

Receiving termination notice or pay in lieu

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

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

The termination-of-employment rules are entirely different from any entitlements an employee might have to be paid discontinuance wage under the ESA.

Constructive dismissal

A useful dismissal might happen when an employer makes a substantial modification to an essential term or condition of a worker’s work without the worker’s real or implied approval.

For instance, a staff member might be constructively dismissed if the company makes modifications to the worker’s terms and conditions of work that result in a considerable decrease in wage or a substantial negative change in such things as the employee’s work location, hours of work, authority, or position. Constructive termination may likewise include circumstances where a company bothers or abuses a staff member, or an employer gives an employee an ultimatum to “stop or be fired” and the worker resigns in response.

The staff member would need to resign in reaction to the change within a sensible time period in order for the employer’s actions to be thought about a termination of work for purposes of the ESA.

Constructive dismissal is a complex and tough topic. For more details on useful termination, please contact 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 work without ending their work (for example, laying someone off sometimes when there is insufficient work to do). The mere truth that the employer does not define a recall date when laying the staff member off does not necessarily suggest that the lay-off is not short-term. Note, nevertheless, that a lay-off, even if meant to be short-lived, might result in constructive termination if it is not permitted 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 make (or makes usually) in a week.

A week of layoff does not consist of any week in which the staff member did not work for several days since the worker was unable or readily available to work, was subject to disciplinary suspension, or was not provided with work since of a strike or lockout at their location of employment or somewhere else.

Employers are not required under the ESA to provide staff members with a composed notification of a temporary layoff, nor do they have to supply a factor for job the lay-off. (They may, nevertheless, be needed to do these things under a collective arrangement or an employment agreement.)

Under the ESA, a “momentary 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 duration of 52 successive weeks, where:- the staff member continues to get substantial payments from the employer;
or

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

– the worker gets supplementary welfare;
or

– the worker would be entitled to receive additional welfare but isn’t receiving them since they are utilized in other places;
or

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

– the company recalls the employee 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 explained in ‘B’ where the employer recalls a worker who is represented by a trade union within the time set out in an agreement in between the union and the employer.

If a worker is laid off for a duration longer than a short-lived layoff as set out above, the company is thought about to have terminated the employee’s work. Generally, the employee 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 worker who has been employed continuously for 3 months or more if either:

– the company has provided the worker correct written notice of termination and the notice period has ended

– the employer pays termination pay to the staff member where no written notice or less notice than is needed is provided

Written notification of termination

A worker is entitled to notice of termination (or termination pay rather of notice) if they have actually been constantly used for at least 3 months. An individual is thought about “utilized” not just while they are actively working, however also during any time in which they are not working but the work relationship still exists (for example, time in which the staff member is off sick or on leave or on lay-off).

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

– if a lay-off goes on longer than a temporary lay-off, the employee’s work is considered (or thought about) to have actually been terminated on the first day of the lay-off-any time after that does not count as part of the employee’s duration of work, despite the fact that the employee may still be utilized for purposes of the “continuously used for three months” qualification

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

It is possible, in some situations, for an individual to have actually been “continually employed” for three months or more and yet have a duration of employment of less than three months. In such scenarios, the worker would be entitled to see because a staff member who has been continually used for at least three months is entitled to discover, 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 specifies the amount of notification needed:

Note: Special rules determine the quantity of notification needed when it comes to mass terminations – where the employment of 50 or more employees is ended at an employer’s facility within a four-week duration.

Requirements throughout the statutory notification duration

During the statutory notification period, an employer needs to:

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

– continue to make whatever contributions would be required to preserve the worker’s advantages plans; and

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

Regular rate

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

Regular wages

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 specific legal entitlements.

Regular work week

For a worker who generally works the very same number of hours every week, a routine work week is a week of that lots of hours, not consisting of overtime hours.

Some workers do not have a regular 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 workers, the “regular incomes” for a “regular work week” is the average amount of the regular wages made by the employee in the weeks in which the employee worked during the duration of 12 weeks right away preceding the date the notification was offered.

A company is not allowed to arrange a worker’s vacation time during the statutory notice period unless the employee-after receiving composed notification of termination of employment-agrees to take their holiday time throughout the notice period.

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

How to supply written notice

In the majority of cases, composed notification of termination of work must be dealt with to the worker. It can be supplied face to face or by mail, fax or e-mail, as long as shipment can be confirmed.

There are unique guidelines for supplying notification of termination if a staff member has an agreement of employment or a cumulative agreement that supplies seniority rights that allow an employee who is to be laid off or whose employment is to be ended to displace (” bump”) other staff members.

Because case, job the employer should post a notice in the work environment (where it will be seen by the staff members) setting out the names, seniority and job category of those workers the employer intends to terminate and the date of the proposed termination. The publishing of the notification is considered to be notification of termination, since the date of the posting, to a worker who is “bumped” by a worker called in the notice. However, this notification of termination must still fulfill the length requirements set out in the ESA.

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

Termination pay

A staff member who does not get the written notice required under the ESA must be provided termination pay in lieu of notification. Termination pay is a lump amount payment equivalent to the regular incomes for a routine work week that a worker would otherwise have been entitled to throughout the written notice duration. A staff member earns getaway pay on their termination pay. Employers need to likewise continue to make whatever contributions would be needed to preserve the benefits the staff member 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 task has been eliminated and her work has actually been ended. Sarah was not provided any written notification of termination.

Sarah worked 40 hours a week each week and was paid $20.00 an hour. She also got four per cent holiday pay. Because she worked for more than three years however less than 4 years, she is entitled to 3 weeks’ pay in lieu of notification.

Sarah’s routine salaries for a regular work week are computed:

$ 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 contributed to her termination pay:

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The company needs to likewise ensure continued coverage for any benefit or pension strategies that used to her for three weeks.

Example: No routine work week

Gerry has operated at an assisted living home for 4 years. He works each week, but his hours vary from week to week. His rate of pay is $25.00 an hour, and he is paid 6 per cent vacation pay.

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

Gerry is entitled to 4 weeks of termination pay.

Gerry’s typical earnings per week are determined:

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

His termination pay is determined:

$ 180.00 × 4 weeks = $720.00

Then his getaway pay on his termination pay is determined:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company should likewise make sure continued protection for any advantage or job pension strategies that used to him for 4 weeks.

When to pay termination pay

Termination pay must be paid to an employee either seven days after the staff member’s work is terminated or on the employee’s next routine pay date, whichever is later on.

Mass termination

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

Meaning of “establishment”

An “facility” is a location at which the company continues company. Separate areas can be considered one facility if either:

– they lie within the same town, or

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

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

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

Note that where an employee carries out work both from their home and from another place where the employer carries on 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 place and, for that reason, for the purpose of mass termination, the staff member is included with respect to that office location.

Example: where numerous areas are considered one “establishment”

ABC Company has a workplace and a storage facility located in London, ON. Sabrina resides in London and works for ABC Company solely from another location: she carries out work for the company from home and does not work at the office.

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

Employer commitments in a mass termination

When a mass termination happens, the employer should complete and deliver the Form 1 (Notice of termination of work) to the Director of Employment Standards (Director) by:

– e-mail to esa_form1_notice@ontario.ca.

– fax to (416) 326-7061.

– personal shipment to the Director’s office 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 workplace of the Director of Employment Standards is located on the 9th flooring, 400 University Avenue, Toronto ON M7A 1T7.

Any notification to the impacted workers is ruled out to have been offered till the Form 1 is received by the Director; to put it simply, notification of mass termination is ineffective till the Director gets the Form 1.

In addition to supplying employees with specific notifications of termination, the employer must, on the very first day of the notice duration:

– publish a copy of the Form 1 supplied to the Director in the work environment where it will concern the attention of the affected workers.

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

The quantity of notification employees must receive in a mass termination is not based upon the workers’ length of work, however on the number of workers who have been terminated. A company must offer:

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

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

– 16 weeks observe if the work of 500 or more workers is to be ended

Exception to the mass termination rules

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 per cent of the employees who have actually been used for a minimum of three months at the establishment

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

Mass termination: resignation by a staff member

A staff member who has received termination notice under the mass termination guidelines who desires to resign before the termination date provided in the company’s notice must offer the company at least one week’s written notification of resignation if the worker has actually been used for less than 2 years. If the employment duration has been two years or more, the staff member must offer a minimum of 2 weeks’ written notification of resignation. However, the staff member does not need to give notice of resignation if the employer constructively dismisses the worker or breaches a regard to the agreement.

Temporary work after termination date in notice

An employer can offer work to an employee who has been notified of termination on a short-term basis in the 13-week period after the termination date set out in the notice without impacting the initial date of the termination and without being required to provide any additional notification of termination to the worker when the temporary work ends.

If a worker works beyond the 13-week period after the termination date and after that has their employment ended, the employee will be entitled to a brand-new written notice of termination as if the previous notice had actually never ever been given. The worker’s period of employment will then likewise consist of the duration of momentary work.

Recall rights

A “recall right” is the right of a staff member on a layoff to be recalled to work by their company under a term or condition of employment. This right is commonly discovered in cumulative agreements.

An employee who has recall rights and who is entitled to termination pay because of a layoff of 35 weeks or more may select to:

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

– offer up their recall rights and get 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 need to make the very same choice for both.

If a staff member who is not represented by a trade union elects to keep their recall rights or fails to make a choice, the company must send out the amount of the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.

If an employee who is represented by a trade union chooses to keep their recall rights or stops working to decide, the employer and the trade union must attempt to come to an arrangement to hold the termination pay (and discontinuance wage, if any) in trust for the employee. If they can not concern an arrangement, and the trade union advises the company and the Director of Employment Standards in writing that efforts have failed, the company needs to send out the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the money in trust.

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

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

Exemptions to discover of termination or termination pay

Much of these exemptions are intricate. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you need more details. Please also refer to the unique rule tool.

The notice of termination and termination pay requirements of the ESA do not use to an employee who:

– is guilty of wilful misbehavior, disobedience or job wilful overlook of duty that is not insignificant and has not been excused by the employer. Note: “wilful” includes when a staff member planned the resulting effect or acted recklessly if they knew or need to have understood the effects their conduct would have. Poor work conduct that is unexpected or unintended is usually ruled out wilful;

– was hired for a specific length of time or till the completion of a particular task. However, such an employee will be entitled to discover of termination or termination pay if:- the work ends before the term expires or the task is finished; or

– the term expires or the job is not finished more than 12 months after the employment began; or

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

See likewise: Employment Standards Self-Service Tool

Wrongful dismissal

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

The rules under the ESA about termination and severance of employment are minimum requirements. Some employees might have rights under the typical law that are greater than the rights to discover of termination (or termination pay) and severance pay under the ESA. An employee might wish to sue their previous company in court for “wrongful termination”. Employees ought to know that they can not take legal action against an employer for wrongful dismissal and submit a claim for termination pay or severance pay with the ministry for the exact same termination or severance of employment. An employee should select one or the other. Employees might wish to obtain legal guidance concerning their rights.