Termination Of Employment

A number of expressions are commonly utilized to explain circumstances 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 employment is terminated if the company:

– dismisses or stops utilizing a staff member, including where an employee is no longer employed due to the insolvency or insolvency of the company;

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

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

In a lot of cases, when an employer ends the employment of a worker who has actually been continually utilized for 3 months, the company should provide the employee with either composed notification of termination, termination pay or a combination (as long as the notification and the number of weeks of termination pay together equal the length of notice the worker is entitled to get).

The ESA does not require an employer to provide a staff member a factor why their employment is being ended. There are, however, some situations where an employer can not end a staff member’s employment even if the company is prepared to give proper composed notice or termination pay. For instance, an employer can not end somebody’s work, or punish them in any other method, 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 refusing to work in excess of the daily 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 employees are not entitled to discover of termination or termination pay under the ESA. Examples consist of: workers who are guilty of wilful misbehavior, disobedience, employment or wilful neglect of responsibility that is not insignificant and has actually not been excused by the employer. Other examples consist of building and construction workers, employees on momentary layoff, staff members who refuse a deal of sensible alternative employment and employees who have actually been employed less than three months.

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

The termination-of-employment guidelines are totally separate from any entitlements an employee may have to be paid severance pay under the ESA.

Constructive dismissal

A positive dismissal may happen when an employer makes a considerable modification to an essential term or condition of a worker’s work without the employee’s actual or employment implied consent.

For example, a worker might be constructively dismissed if the employer makes modifications to the worker’s terms of employment that lead to a considerable reduction in salary or a substantial negative change in such things as the employee’s work area, hours of work, authority, or position. Constructive dismissal might also consist of circumstances where a company bothers or abuses an employee, or a company offers a worker a demand to “stop or be fired” and the staff member resigns in response.

The worker would have to resign in response to the change within a reasonable amount of time in order for the company’s actions to be considered a termination of employment for functions of the ESA.

Constructive termination is a complex and hard topic. For additional information on constructive dismissal, please contact the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A worker is on temporary layoff when a company cuts back or stops the worker’s work without ending their employment (for example, laying somebody off at times when there is inadequate work to do). The mere reality that the company does not define a recall date when laying the staff member off does not necessarily mean that the lay-off is not short-lived. Note, nevertheless, that a lay-off, even if planned to be momentary, may lead to positive dismissal if it is not permitted by the employment agreement.

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

A week of layoff does not consist of any week in which the staff member did not work for one or more days because the staff member was not able or available to work, underwent disciplinary suspension, or was not offered with work due to the fact that of a strike or lockout at their location of employment or somewhere else.

Employers are not needed under the ESA to supply employees with a composed notice of a temporary layoff, nor do they need to offer a factor for the lay-off. (They may, however, be required to do these things under a collective agreement or an employment agreement.)

Under the ESA, a “short-lived 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 successive weeks, but less than 35 weeks of layoff in any period of 52 consecutive weeks, where:- the staff member continues to get significant payments from the company;
or

– the company continues to pay for the benefit of the staff member under a genuine group or staff member insurance coverage strategy (such as a medical or drug insurance coverage strategy) or a genuine retirement or pension strategy;
or

– the employee receives supplementary joblessness advantages;
or

– the staff member would be entitled to receive additional unemployment advantages but isn’t getting them due to the fact that they are employed in other places;
or

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

– the employer 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 described in ‘B’ where the company recalls a staff member 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 a duration longer than a short-lived layoff as set out above, the employer is considered to have terminated the employee’s work. 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 employment of an employee who has been used continuously for three months or more if either:

– the employer has provided the employee correct composed notification of termination and the notification duration has actually expired

– the company pays termination pay to the employee where no composed notification or less notification than is needed is given

Written notice of termination

An employee is entitled to discover of termination (or termination pay instead of notice) if they have been continually used for a minimum of three months. A person is considered “employed” not only while they are actively working, however also during whenever in which they are not working but the employment relationship still exists (for example, time in which the worker is off ill or on leave or on lay-off).

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

– if a lay-off goes on longer than a momentary lay-off, the employee’s work 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 worker’s duration of employment, although the worker may still be utilized for functions of the “continually utilized for 3 months” certification

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

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

The following chart specifies the amount of notice required:

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

Requirements throughout the statutory notice period

During the statutory notice period, an employer must:

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

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

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

Regular rate

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

Regular incomes

These are salaries aside from overtime pay, getaway pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and discontinuance wage and certain contractual entitlements.

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 lots of hours, not including overtime hours.

Some employees do not have a regular work week. That is, they do not work the very same variety of hours weekly or they are paid on a basis other than time. For these workers, the “regular incomes” for a “routine work week” is the typical amount of the regular earnings earned by the staff member in the weeks in which the employee worked throughout the duration of 12 weeks instantly preceding the date the notification was provided.

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

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

How to offer written notice

For the most part, written notification of termination of work should be resolved to the employee. It can be offered personally or by mail, fax or email, as long as delivery can be validated.

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

In that case, the company needs to publish a notice in the office (where it will be seen by the staff members) setting out the names, seniority and task classification of those workers the company plans to terminate and the date of the proposed termination. The publishing of the notification is thought about to be notice of termination, as of the date of the publishing, to an employee who is “bumped” by an employee named in the notice. However, this notification of termination must still satisfy the length requirements set out in the ESA.

There are likewise unique rules relating to how notification is provided when there is a mass termination.

Termination pay

An employee who does not get the written notification required under the ESA needs to be given termination pay in lieu of notification. Termination pay is a swelling sum payment equal to the regular wages for a regular work week that a worker would otherwise have actually been entitled to throughout the composed notice period. A worker earns holiday pay on their termination pay. Employers should 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 employed through the notification duration.

Example: Regular work week

Sarah has actually worked for three and a half years. Now her job has been removed and her work has actually been ended. Sarah was not given any composed notice of termination.

Sarah worked 40 hours a week weekly and was paid $20.00 an hour. She also got four percent getaway 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 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 holiday pay on her termination pay is determined:

4% of $2,400.00 = $96.00

Finally, her vacation 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 make sure continued coverage for any advantage or pension strategies that applied to her for three weeks.

Example: No routine work week

Gerry has operated at a retirement home for 4 years. He works each week, however his hours vary from week to week. His rate of pay is $25.00 an hour, and he is paid 6 per cent 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 2 of the 12 weeks right away preceding the day his employment was terminated. Gerry made $1,800.00 in the 12 weeks before the day on which his employment ended.

Gerry is entitled to four weeks of termination pay.

Gerry’s typical earnings weekly are determined:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for two weeks therefore these weeks are not consisted of in the calculation of average 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 holiday pay is added to his termination pay:

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company should also guarantee continued protection for any advantage or pension that used to him for four weeks.

When to pay termination pay

Termination pay need to be paid to an employee either 7 days after the worker’s employment is terminated or on the worker’s next regular pay date, whichever is later on.

Mass termination

Special guidelines for notice of termination may 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 “facility” is a place at which the employer continues business. Separate locations can be considered one establishment if either:

– they are located within the exact same town, or

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

Effective October 26, 2023, in cases of mass termination, the term “facility” consists of an employee’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 workers who work solely remotely be considered for addition in the count when figuring out whether 50 or more employees have actually been ended.

Note that where a staff member performs work both from their home and from another location where the company continues company (for instance, a workplace), their home is not consisted of in the meaning of “facility”. Instead, the employee is considered to have a connection to the office area and, for that reason, for the purpose of mass termination, the staff member is included with regard to that office place.

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

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

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

Employer responsibilities in a mass termination

When a mass termination happens, the company 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.

– individual shipment 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 workplace of the Director of Employment Standards is found on the 9th flooring, employment 400 University Avenue, Toronto ON M7A 1T7.

Any notice to the impacted staff members is not thought about to have actually been offered up until the Form 1 is gotten by the Director; simply put, notice of mass termination is ineffective until the Director receives the Form 1.

In addition to providing staff members with specific notifications of termination, the company must, on the very first day of the notice duration:

– post a copy of the Form 1 supplied to the Director in the work environment where it will come to the attention of the impacted employees.

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

The amount of notification staff members must get in a mass termination is not based upon the staff members’ length of employment, but on the variety of workers who have been ended. An employer must give:

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

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

– 16 weeks see if the work of 500 or more staff members is to be terminated

Exception to the mass termination guidelines

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

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

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

Mass termination: employment resignation by a staff member

A staff member who has received termination notification under the mass termination guidelines who desires to resign before the termination date provided in the employer’s notice must provide the employer at least one week’s composed notice of resignation if the staff member has been employed for less than 2 years. If the work duration has actually been 2 years or more, the worker should provide a minimum of two weeks’ written 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 notification

A company can offer work to a worker who has been notified of termination on a temporary basis in the 13-week period after the termination date set out in the notification without impacting the initial date of the termination and without being needed to offer any more notification of termination to the worker when the short-lived work ends.

If an employee works beyond the 13-week duration after the termination date and after that has their work ended, the worker will be entitled to a brand-new written notice of termination as if the previous notification had actually never ever been offered. The worker’s duration of work will then also include the duration of temporary work.

Recall rights

A “recall right” is the right of an employee on a layoff to be called back to work by their employer under a term or condition of work. This right is typically discovered in collective arrangements.

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

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

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

If a worker is entitled to both termination pay and severance pay, they should make the very same option 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 company should send the amount of the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If a staff member who is represented by a trade union chooses to keep their recall rights or fails to decide, the employer and the trade union must try to come to a plan to hold the termination pay (and discontinuance wage, if any) in trust for employment 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 actually stopped working, the employer should send the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, employment who holds the cash in trust.

If an employee selects to quit their recall rights or if the recall rights expire, the cash that is held in trust needs to be sent out to the staff member.

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

Exemptions to see of termination or termination pay

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

The notification of termination and termination pay requirements of the ESA do not apply to a worker who:

– is guilty of wilful misconduct, disobedience or wilful neglect of duty that is not insignificant and has not been excused by the company. Note: “wilful” includes when a worker intended the resulting consequence or acted recklessly if they understood or must have understood the results their conduct would have. Poor work conduct that is unintentional or unintended is typically ruled out wilful;

– was worked with for a particular length of time or until the conclusion of a particular job. However, such a worker will be entitled to discover of termination or termination pay if:- the employment 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 started; or

– the work continues for three months or more after the term expires or the task is completed;

See likewise: Employment Standards Self-Service Tool

Wrongful termination

Rights higher than ESA notification of termination, termination pay, discontinuance wage

The guidelines under the ESA about termination and severance of work are minimum requirements. Some employees may have rights under the common law that are higher than the rights to observe of termination (or termination pay) and severance pay under the ESA. A worker might want to sue their former employer in court for “wrongful termination”. Employees should be aware that they can not take legal action against an employer for wrongful termination and submit a claim for termination pay or discontinuance wage with the ministry for the very same termination or severance of work. An employee must pick one or the other. Employees may wish to obtain legal advice worrying their rights.