Termination Of Employment

A variety of expressions are typically used to explain situations when employment is terminated. These include “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 using an employee, consisting of where a worker is no longer used due to the insolvency or insolvency of the company;

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

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

For the most part, when a company ends the work of an employee who has actually been continuously employed for three months, the company must supply the employee with either written notice 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 staff member is entitled to receive).

The ESA does not need a company to provide a staff member a reason that their work is being ended. There are, nevertheless, some circumstances where an employer can not end a staff member’s work even if the employer is prepared to provide appropriate composed notice or termination pay. For example, a company can not end somebody’s work, or punish them in any other method, if any part of the factor for the termination of employment is based upon the employee asking concerns about the ESA or working out a right under the ESA, such as declining to work in excess of the day-to-day or weekly hours of work optimums, or taking a leave of lack defined in the ESA. Please see the chapter on reprisals.

Qualifying for termination notice or pay in lieu

Certain workers are not entitled to discover of termination or termination pay under the ESA. Examples include: workers who are guilty of wilful misconduct, disobedience, or wilful overlook of responsibility that is not minor and has actually not been condoned by the employer. Other examples consist of construction employees, workers on momentary layoff, employees who refuse an offer of affordable alternative employment and employees who have actually been used less than 3 months.

There are a variety of other exemptions to the termination of work provisions of the ESA. See “Exemptions to observe of termination or termination pay.” Please also refer to the special rule tool.

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

Constructive dismissal

A constructive termination might happen when an employer makes a significant change to a fundamental term or condition of a staff member’s work without the employee’s real or implied authorization.

For instance, an employee may be constructively dismissed if the employer makes modifications to the employee’s conditions of employment that result in a substantial decrease in salary or a significant unfavorable modification in such things as the staff member’s work place, hours of work, authority, or position. Constructive termination may likewise consist of situations where a company pesters or abuses a worker, or a company provides an employee a final notice to “quit or be fired” and the employee resigns in response.

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

Constructive dismissal is a complex and tough topic. For additional information on positive dismissal, please get in touch with the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

An employee is on temporary layoff when an employer cuts down or stops the staff member’s work without ending their work (for instance, laying someone off at times when there is not enough work to do). The simple reality that the company does not specify a recall date when laying the worker off does not necessarily indicate that the lay-off is not temporary. Note, nevertheless, that a lay-off, even if planned to be short-lived, might lead to positive termination if it is not permitted by the employment agreement.

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

A week of layoff does not consist of any week in which the employee did not work for one or more days due to the fact that the staff member was unable or available to work, was subject to disciplinary suspension, or was not offered with work because of a strike or lockout at their place of employment or in other places.

Employers are not required under the ESA to supply staff members with a written notification of a temporary layoff, nor do they have to supply a reason for the lay-off. (They may, nevertheless, be required to do these things under a cumulative contract or referall.us an employment agreement.)

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

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

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

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

– the staff member receives additional welfare;
or

– the employee would be entitled to receive additional joblessness advantages but isn’t receiving them due to the fact that they are utilized somewhere else;
or

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

– the company remembers 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 an employee who is represented by a trade union within the time set out in an agreement between the union and the employer.

If a staff member is laid off for a duration longer than a short-lived layoff as set out above, the employer is thought about to have terminated the staff member’s work. Generally, the staff member will then be entitled to termination pay.

Written notification of termination and termination pay

Under the ESA, a company can terminate the employment of a staff member who has been employed continually for three months or more if either:

– the company has actually given the worker correct composed notice of termination and the notice period has expired

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

Written notification of termination

A worker is entitled to discover of termination (or termination pay rather of notification) if they have been constantly used for a minimum of 3 months. An individual is considered “utilized” not only while they are actively working, but also throughout 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 notification to which a staff member is entitled depends on their “period of work”. A worker’s period of employment includes not just all time while the employee is actively working but likewise any time that they are not working but 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 work is deemed (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 worker’s duration of employment, even though the worker might still be utilized for purposes of the “continually employed for three months” certification

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

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

The following chart specifies the amount of notification required:

Note: Special guidelines identify the quantity of notice needed in the case of mass terminations – where the employment of 50 or more workers is terminated at a company’s facility within a four-week period.

Requirements throughout the statutory notice duration

During the statutory notification duration, a company should:

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

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

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

These are earnings other than overtime pay, holiday pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of task pay, termination pay and discontinuance wage and specific legal entitlements.

Regular work week

For a worker who generally works the exact same variety of hours every week, a routine work week is a week of that lots of hours, not including overtime hours.

Some staff members do not have a regular work week. That is, they do not work the very same number of hours weekly or they are paid on a basis other than time. For these employees, the “routine wages” for a “regular work week” is the typical amount of the regular earnings made by the worker in the weeks in which the worker worked during the period of 12 weeks right away preceding the date the notice was offered.

An employer is not permitted to set up an employee’s trip time throughout the statutory notification duration unless the employee-after getting written notification of termination of employment-agrees to take their vacation time throughout the notification duration.

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

How to supply written notification

For the most part, composed notice of termination of work should be dealt with to the employee. It can be offered in person or by mail, fax or e-mail, as long as delivery can be confirmed.

There are special rules for providing notification of termination if a staff member has an agreement of work or a collective arrangement that supplies seniority rights that enable a worker who is to be laid off or whose work is to be terminated to displace (” bump”) other employees.

In that case, the company must publish a notification in the workplace (where it will be seen by the staff members) setting out the names, seniority and job classification of those staff members the company intends to end and the date of the proposed termination. The publishing of the notification is thought about to be notification of termination, as of the date of the publishing, to a worker who is “bumped” by an employee named in the notice. However, this notice of termination should still fulfill the length requirements set out in the ESA.

There are likewise unique guidelines regarding how notice is supplied when there is a mass termination.

Termination pay

An employee who does not receive the composed notice required under the ESA should be offered termination pay in lieu of notice. Termination pay is a swelling amount payment equal to the routine earnings for a routine work week that a worker would otherwise have been entitled to throughout the written notification period. An employee earns holiday pay on their termination pay. Employers must also continue to make whatever contributions would be needed to preserve the benefits the employee would have been entitled to had they continued to be used through the notice period.

Example: Regular work week

Sarah has actually worked for three and a half years. Now her task has been gotten rid of and her work has actually been terminated. Sarah was not offered any written notification of termination.

Sarah worked 40 hours a week every week and was paid $20.00 an hour. She also received 4 percent 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 routine work week are calculated:

$ 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 trip pay on her termination pay is determined:

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 should likewise make sure ongoing protection for any advantage or pension that applied to her for three weeks.

Example: No regular work week

Gerry has worked at an assisted living 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 getaway pay.

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

Gerry is entitled to 4 weeks of termination pay.

Gerry’s typical earnings each week are determined:

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

His termination pay is determined:

$ 180.00 × 4 weeks = $720.00

Then his trip pay on his termination pay is calculated:

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 should likewise make sure continued protection for any advantage or pension plans that applied to him for four weeks.

When to pay termination pay

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

Mass termination

Special rules for notification of termination might apply in cases of mass termination (when a company is ending 50 or more workers at its establishment within a four-week duration).

Meaning of “establishment”

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

– they are situated within the exact same town, or

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

Effective October 26, 2023, in cases of mass termination, the term “facility” consists of an employee’s home, but only if the worker works from home and does not work at any other location where the employer brings on company.

This will require that staff members who work specifically from another location be thought about for addition in the count when identifying whether 50 or more employees have actually been terminated.

Note that where a worker performs work both from their home and from another area where the employer continues organization (for instance, a workplace), their home is not included in the definition of “facility”. Instead, the worker is considered to have a connection to the office area and, therefore, for the function of mass termination, the worker is consisted of with regard to that workplace location.

Example: where several areas are thought about one “establishment”

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 office.

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

Employer obligations in a mass termination

When a mass termination takes place, the company needs to finish and provide the Form 1 (Notice of termination of employment) to the Director of Employment Standards (Director) by:

– email to esa_form1_notice@ontario.ca.

– fax to (416) 326-7061.

– individual delivery 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 shipment can be verified.

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

Any notification to the impacted staff members is not thought about to have been given until the Form 1 is received by the Director; in other words, notification of mass termination is ineffective up until the Director receives the Form 1.

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

– publish a copy of the Form 1 offered to the Director in the workplace where it will concern the attention of the affected staff members.

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

The quantity of notice workers need to get in a mass termination is not based on the staff members’ length of employment, but on the number of employees who have actually been terminated. A company must provide:

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

– 12 weeks notice if the employment of 200 to 499 employees is to be terminated

– 16 weeks discover 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 two things apply:

– the variety of employees whose employment is being ended represents not more than 10 percent of the employees who have been utilized for at least 3 months at the facility

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

Mass termination: resignation by a worker

An employee who has actually received termination notice under the mass termination guidelines who wishes to resign before the termination date offered in the employer’s notice should offer the company at least one week’s composed notice of resignation if the worker has been utilized for less than 2 years. If the employment duration has been two years or more, the staff member should offer a minimum of two weeks’ composed notification of resignation. However, the worker does not need to give notice of resignation if the employer constructively dismisses the employee or breaches a term of the agreement.

Temporary work after termination date in notice

An employer can offer work to a worker who has been given notice of termination on a momentary basis in the 13-week period after the termination date set out in the notification without affecting the original date of the termination and without being required to provide any more notice of termination to the worker when the temporary work ends.

If a staff member works beyond the 13-week period after the termination date and then has their employment ended, the staff member will be entitled to a new composed notice of termination as if the previous notification had actually never been provided. The employee’s duration of employment will then likewise consist of the period of short-lived work.

Recall rights

A “recall right” is the right of a worker on a layoff to be recalled to work by their company under a term or condition of work. This right is frequently discovered in collective contracts.

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

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

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

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

If a staff member who is not represented by a trade union chooses to keep their recall rights or stops working to decide, the employer needs to send 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 elects to keep their recall rights or fails to choose, the employer and the trade union must try to come to an arrangement to hold the termination pay (and severance pay, if any) in trust for the worker. If they can not come to an arrangement, and the trade union recommends the employer and the Director of Employment Standards in composing that efforts have actually stopped working, the employer needs to send out the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the money in trust.

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

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

Exemptions to notice of or termination pay

Much of these exemptions are intricate. Please contact the Employment Standards Information Centre, 1-800-531-5551, if you require more details. Please likewise refer to the special guideline tool.

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

– is guilty of wilful misconduct, disobedience or wilful disregard of responsibility that is not minor and has not been excused by the employer. Note: “wilful” includes when a staff member meant the resulting consequence or acted recklessly if they understood or should have known the effects their conduct would have. Poor work conduct that is accidental or unintended is usually not considered wilful;

– was hired for a specific length of time or up until the completion of a particular task. However, such a worker will be entitled to see of termination or termination pay if:- the employment ends before the term expires or the job 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 three months or more after the term expires or the job is completed;

See likewise: Employment Standards Self-Service Tool

Wrongful dismissal

Rights greater than ESA notice of termination, termination pay, discontinuance wage

The rules under the ESA about termination and severance of work are minimum requirements. Some staff members may have rights under the common law that are higher than the rights to notice of termination (or termination pay) and discontinuance wage under the ESA. An employee might wish to sue their former employer in court for “wrongful termination”. Employees should understand that they can not take legal action against a company for wrongful dismissal and sue for termination pay or severance pay with the ministry for the exact same termination or severance of work. A staff member should choose one or the other. Employees might wish to get legal guidance concerning their rights.