Termination Of Employment

A variety of expressions are frequently used to explain situations when employment is ended. These consist of “release,” “discharged,” “dismissed,” “fired” and “permanently laid off.”

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

– dismisses or stops utilizing an employee, consisting of where an employee is no longer employed due to the personal bankruptcy or insolvency of the employer;

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

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

In many cases, when a company ends the employment of a worker who has actually been constantly utilized for three months, the company must supply the employee with either written notice of termination, termination pay or a mix (as long as the notice and the variety of weeks of termination pay together equivalent the length of notification the worker is entitled to receive).

The ESA does not require an employer to give a worker a reason their employment is being terminated. There are, however, some scenarios where an employer can not end an employee’s employment even if the company is prepared to provide appropriate written notification or termination pay. For instance, a company can not end somebody’s employment, or penalize them in any other way, if any part of the reason for the termination of employment is based on the staff member asking questions about the ESA or exercising a right under the ESA, such as declining to work in excess of the day-to-day or weekly hours of work maximums, or taking a leave of absence defined 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 include: staff members who are guilty of wilful misconduct, disobedience, or employment wilful overlook of duty that is not trivial and has not been excused by the employer. Other examples consist of building staff members, workers on momentary layoff, staff members who decline an offer of sensible alternative employment and staff members who have actually been used less than three months.

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

The termination-of-employment rules are completely different from any entitlements an employee might have to be paid severance pay under the ESA.

Constructive termination

A positive dismissal might occur when a company makes a substantial modification to a fundamental term or condition of a worker’s employment without the staff member’s real or implied consent.

For instance, an employee might be constructively dismissed if the company makes modifications to the employee’s terms and conditions of work that lead to a significant decrease in salary or a substantial unfavorable change in such things as the employee’s work location, hours of work, authority, or position. Constructive termination may likewise consist of circumstances where a company harasses or abuses a worker, or an employer provides a worker a final notice to “stop or be fired” and the employee resigns in reaction.

The worker would need to resign in response to the change within a sensible time period in order for the employer’s actions to be thought about a termination of employment for purposes of the ESA.

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

Temporary layoff

An employee is on momentary layoff when an employer cuts down or stops the staff member’s work without ending their employment (for instance, laying somebody off at times when there is inadequate work to do). The mere reality that the employer does not specify a recall date when laying the worker off does not necessarily suggest that the lay-off is not short-term. Note, however, that a lay-off, even if planned to be short-term, might result in constructive termination if it is not enabled by the employment agreement.

For the purposes of the termination arrangements of the ESA, a “week of layoff” is a week in which the worker made less than half of what they would normally make (or earns on average) in a week.

A week of layoff does not include any week in which the staff member did not work for one or more days because the worker was unable or readily available to work, underwent disciplinary suspension, or was not provided with work since of a strike or lockout at their place of employment or somewhere else.

Employers are not needed under the ESA to provide staff members with a written notification of a short-term 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 agreement.)

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

1. not more than 13 weeks of layoff in any duration of 20 consecutive 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 consecutive weeks, where:- the staff member continues to get substantial payments from the company;
or

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

– the employee receives supplementary welfare;
or

– the employee would be entitled to get supplementary welfare but isn’t getting them due to the fact that they are utilized elsewhere;
or

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

If a worker is laid off for employment a duration longer than a short-term layoff as set out above, the company is considered to have actually ended the worker’s employment. Generally, the worker will then be entitled to termination pay.

Written notification of termination and termination pay

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

– the company has actually offered the worker appropriate composed notification of termination and the notification period has actually expired

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

Written notification of termination

A staff member is entitled to see of termination (or termination pay instead of notification) if they have actually been continually employed for at least 3 months. A person is considered “employed” not only while they are actively working, but likewise during whenever in which they are not working however the employment relationship still exists (for instance, time in which the employee is off ill or on leave or on lay-off).

The quantity of notification to which a worker is entitled depends upon their “duration of employment”. An employee’s period of employment consists of not only perpetuity while the worker is actively working but also 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 considered) to have actually been terminated on the first day of the lay-off-any time after that does not count as part of the staff member’s duration of employment, although the staff member may still be used for functions of the “continually employed for three months” credentials

– if two separate periods of employment are separated by more than 13 weeks, just the most current period counts for functions of notification of termination

It is possible, in some scenarios, for a person to have actually been “continuously used” for 3 months or more and yet have a duration of employment of less than three months. In such situations, the worker would be entitled to discover since a staff member who has been continually used for a minimum of 3 months is entitled to notice, and the minimum notice entitlement of one week uses to a staff member with a duration of employment of any length less than one year.

The following chart specifies the quantity of notification required:

Note: Special guidelines identify the quantity of notice required in the case of mass terminations – where the work of 50 or more workers is ended at a company’s establishment within a four-week period.

Requirements during the statutory notification duration

During the statutory notice duration, a company must:

– not reduce the employee’s wage rate or modify any other term or condition of employment;

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

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

Regular rate

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

Regular salaries

These are earnings besides overtime pay, getaway pay, public vacation pay, employment premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and severance pay and particular contractual privileges.

Regular work week

For a worker who typically works the very same variety of hours weekly, a regular work week is a week of that many hours, not including overtime hours.

Some employees do not have a routine work week. That is, they do not work the very same variety of hours each week or they are paid on a basis aside from time. For these workers, the “routine incomes” for a “routine work week” is the typical quantity of the regular salaries earned by the worker in the weeks in which the employee worked during the duration of 12 weeks immediately preceding the date the notice was given.

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

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

How to offer written notice

In most cases, written notification of termination of employment need to be dealt with to the employee. It can be provided personally or by mail, fax or email, as long as shipment can be verified.

There are unique rules for supplying notice of termination if a staff member has an agreement of employment or a cumulative agreement that offers seniority rights that allow an employee who is to be laid off or whose employment is to be terminated to displace (” bump”) other workers.

Because case, the employer needs to post a notification in the workplace (where it will be seen by the employees) setting out the names, seniority and job classification of those staff members the employer intends to end and the date of the proposed termination. The publishing of the notice is thought about to be notification of termination, as of the date of the posting, to a worker who is “bumped” by a worker named in the notice. However, this notice of termination should still meet the length requirements set out in the ESA.

There are also special guidelines regarding how notification is offered when there is a mass termination.

Termination pay

A staff member who does not receive the written notice needed under the ESA needs to be provided termination pay in lieu of notice. Termination pay is a swelling sum payment equal to the routine incomes for a regular work week that an employee would otherwise have been entitled to throughout the written notice period. A staff member earns trip pay on their termination pay. Employers should also continue to make whatever contributions would be required to preserve the benefits the worker would have been entitled to had they continued to be used through the notification duration.

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 terminated. Sarah was not provided any composed notice of termination.

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

Sarah’s regular earnings for a regular work week are computed:

$ 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 holiday pay on her termination pay is determined:

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 company needs to likewise make sure ongoing coverage for any benefit or pension that applied to her for 3 weeks.

Example: No regular work week

Gerry has operated at an assisted living home for 4 years. He works weekly, but his hours differ from week to week. His rate of pay is $25.00 an hour, employment and he is paid 6 percent holiday pay.

Gerry’s employer eliminated his position and did not give Gerry any composed notification of termination. Gerry was ill and off work for two of the 12 weeks right away preceding the day his employment was ended. 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 incomes per week are calculated:

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

His termination pay is computed:

$ 180.00 × 4 weeks = $720.00

Then his trip pay on his termination pay is 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 must likewise make sure continued coverage for any benefit or pension that applied to him for 4 weeks.

When to pay termination pay

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

Mass termination

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

Meaning of “facility”

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

– they lie within the same municipality, or

– an employee at one location has contractual seniority rights that reach the other location, allowing the staff member to displace another worker (also called “bumping rights”).

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

This will require that workers who work specifically from another location be considered for addition in the count when figuring out whether 50 or more workers have actually been ended.

Note that where a worker performs work both from their home and from another place where the company continues service (for example, a workplace), their home is not included in the definition of “establishment”. Instead, the worker is thought about to have a connection to the workplace location and, for that reason, for the function of mass termination, the employee is included with respect to that workplace location.

Example: where numerous areas are thought about one “facility”

ABC Company has an office and a warehouse located in London, ON. Sabrina lives in London and works for ABC Company specifically from another location: she carries out work for the company from home and does not work at the workplace.

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

Employer commitments in a mass termination

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

– email 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 delivery to the Director’s office, if the shipment can be confirmed.

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 considered to have actually been provided until the Form 1 is received by the Director; to put it simply, notice of mass termination is ineffective until the Director gets the Form 1.

In addition to offering employees with specific notifications of termination, the company must, on the very first day of the notification period:

– publish a copy of the Form 1 provided to the Director in the work environment where it will come to the attention of the impacted workers.

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

The quantity of notification workers need to get in a mass termination is not based upon the staff members’ length of employment, but on the number of staff members who have been ended. A company needs to provide:

– 8 weeks see if the employment of 50 to 199 staff members is to be terminated

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

– 16 weeks notice if the employment of 500 or more staff members is to be terminated

Exception to the mass termination rules

The mass termination rules do not use if these two things use:

– the number of staff members whose work is being ended represents not more than 10 percent of the workers who have been utilized for at least 3 months at the establishment

– none of the terminations are brought on by the permanent discontinuance of all or part of the employer’s business at the facility

Mass termination: resignation by a staff member

A worker who has actually received termination notification under the mass termination guidelines who wishes to resign before the termination date offered in the employer’s notification should provide the company a minimum of one week’s written notification of resignation if the staff member has actually been utilized for less than two years. If the work period has been two years or more, the employee should offer at least two weeks’ composed notice of resignation. However, the worker does not need to notify of resignation if the company constructively dismisses the employee or breaches a regard to the agreement.

Temporary work after termination date in notice

An employer can offer work to a worker who has been provided notification of termination on a temporary basis in the 13-week duration after the termination date set out in the notice without affecting the initial date of the termination and without being required to provide any additional notice of termination to the staff member when the temporary work ends.

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

Recall rights

A “recall right” is the right of a worker on a layoff to be called back to work by their employer under a term or condition of work. This right is commonly discovered in cumulative agreements.

A staff member who has recall rights and who is entitled to termination pay since of a layoff of 35 weeks or more may 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

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

If a worker is entitled to both termination pay and discontinuance wage, they should make the same choice for both.

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

If a worker who is represented by a trade union chooses to keep their recall rights or fails to make a choice, the company and the trade union must try 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 an arrangement, and the trade union advises the employer and the Director of Employment Standards in writing that efforts have failed, the employer should send out the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If an employee picks to quit their recall rights or if the recall rights expire, the money that is kept in trust should be sent out to the worker.

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

Exemptions to observe of termination or termination pay

Many of these exemptions are intricate. Please contact the Employment Standards Information Centre, 1-800-531-5551, if you need more details. Please also describe the special guideline tool.

The notice 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 overlook of duty that is not trivial and has actually not been condoned by the employer. Note: “wilful” consists of when a staff member meant the resulting consequence or acted recklessly if they understood or need to have known the results their conduct would have. Poor work conduct that is unexpected or unintended is usually ruled out wilful;

– was hired for a particular length of time or until the conclusion of a specific job. However, such a worker will be entitled to notice of termination or termination pay if:- the work ends before the term ends or the task is finished; or

– the term ends or the task is not finished more than 12 months after the work started; or

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

See likewise: Employment Standards Self-Service Tool

Wrongful termination

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

The guidelines under the ESA about termination and severance of work are minimum requirements. Some staff members might have rights under the common law that are greater than the rights to see of termination (or termination pay) and severance pay under the ESA. An employee may wish to sue their former company in court for “wrongful dismissal”. Employees must understand that they can not sue an employer for wrongful termination and sue for termination pay or discontinuance wage with the ministry for the exact same termination or severance of employment. A staff member needs to choose one or the other. Employees may want to obtain legal suggestions worrying their rights.