Termination Of Employment

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

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

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

– “constructively” dismisses a worker and the employee resigns, in response, within an affordable time;

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

Most of the times, when a company ends the work of an employee who has been constantly used for three months, the employer should offer the employee with either composed notice of termination, termination pay or a combination (as long as the notice and the variety of weeks of termination pay together equal the length of notification the employee is entitled to receive).

The ESA does not require an employer to offer a worker a reason that their employment is being terminated. There are, however, some circumstances where a company can not end a staff member’s employment even if the employer is prepared to provide correct composed notice or termination pay. For example, 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 work is based on the staff member asking questions about the ESA or exercising a right under the ESA, such as refusing to work in excess of the day-to-day or weekly hours of work optimums, or taking a leave of absence specified in the ESA. Please see the chapter on reprisals.

Receiving termination notice or pay in lieu

Certain workers are not entitled to notice of termination or termination pay under the ESA. Examples include: workers who are guilty of wilful misconduct, disobedience, or wilful neglect of task that is not minor and has not been condoned by the company. Other examples include building staff members, workers on momentary layoff, employees who decline an offer of reasonable alternative work and employees who have been utilized less than three months.

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

The termination-of-employment guidelines are completely different from any entitlements a worker may have to be paid discontinuance wage under the ESA.

Constructive termination

A constructive termination might occur when an employer makes a substantial modification to an essential term or condition of a staff member’s work without the employee’s actual or implied permission.

For example, an employee may be constructively dismissed if the company makes changes to the employee’s conditions of employment that lead to a substantial decrease in income or a considerable negative change in such things as the worker’s work place, hours of work, authority, or position. Constructive termination might likewise include scenarios where an employer bothers or abuses a staff member, or a company offers a worker an ultimatum to “stop or be fired” and the worker resigns in action.

The employee would have to resign in reaction to the modification within a sensible amount of time 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 challenging subject. To learn more on useful dismissal, please get in touch with the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A worker is on temporary layoff when a company cuts down or stops the worker’s work without ending their work (for instance, laying someone off sometimes when there is insufficient work to do). The simple fact that the employer does not specify a recall date when laying the staff member off does not necessarily indicate that the lay-off is not momentary. Note, however, that a lay-off, even if intended to be short-lived, may lead to useful dismissal if it is not allowed by the employment agreement.

For the functions of the termination provisions 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 employment makes typically) in a week.

A week of layoff does not include any week in which the worker did not work for one or more days because the employee was not able or offered to work, was subject to disciplinary suspension, or was not offered with work because of a strike or lockout at their location of work or somewhere else.

Employers are not needed under the ESA to supply workers with a composed notice of a temporary layoff, nor do they have to offer a reason for the lay-off. (They may, nevertheless, be needed to do these things under a cumulative agreement or an employment agreement.)

Under the ESA, a “temporary 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, however less than 35 weeks of layoff in any period of 52 successive weeks, where:- the staff member continues to get substantial payments from the employer;
or

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

– the employee gets extra welfare;
or

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

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

– the employer remembers the staff member 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 described in ‘B’ where the employer remembers 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 staff member is laid off for a duration longer than a temporary layoff as set out above, the company is thought about to have ended the employee’s employment. Generally, the staff member will then be entitled to termination pay.

Written notice of termination and termination pay

Under the ESA, a company can end the work of a staff member who has been utilized continually for three months or more if either:

– the company has offered the worker correct composed notice of termination and the notification period has actually ended

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

Written notification of termination

A worker is entitled to see of termination (or termination pay rather of notice) if they have actually been continuously used for employment a minimum of 3 months. A person is considered “employed” not just while they are actively working, but likewise during at any time in which they are not working but the work relationship still exists (for instance, time in which the worker is off sick or on leave or on lay-off).

The quantity of notice to which a worker is entitled depends on their “period of work”. A staff member’s duration of employment includes not only perpetuity while the worker 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 staff member’s employment is deemed (or thought about) to have been ended on the first day of the lay-off-any time after that does not count as part of the worker’s period of work, although the employee might still be employed for functions of the “continually utilized for 3 months” certification

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

It is possible, in some situations, for a person to have actually been “continuously used” for 3 months or more and yet have a period of employment of less than three months. In such situations, employment the worker would be entitled to see due to the fact that an employee who has been continuously utilized for employment at least three months is entitled to notice, and the minimum notification entitlement of one week applies to an employee with a duration of work of any length less than one year.

The following chart defines the quantity of notification needed:

Note: employment Special guidelines figure out the amount of notification needed in the case of mass terminations – where the work of 50 or more staff members is ended at an employer’s facility within a four-week period.

Requirements during the statutory notification period

During the statutory notice duration, a company must:

– not lower the employee’s wage rate or change any other term or condition of work;

– continue to make whatever contributions would be needed to preserve the employee’s advantages strategies; and

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

Regular rate

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

Regular incomes

These are incomes besides overtime pay, trip pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and severance pay and specific contractual privileges.

Regular work week

For a worker who typically works the very same variety of hours each week, a regular work week is a week of that lots of hours, not consisting of overtime hours.

Some staff members do not have a routine 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 “routine salaries” for a “regular work week” is the typical amount of the routine wages earned by the staff member in the weeks in which the worker worked during the period of 12 weeks immediately preceding the date the notice was provided.

An employer is not enabled to arrange an employee’s vacation time during the statutory notice duration unless the employee-after receiving composed notice of termination of employment-agrees to take their vacation time during the notice duration.

If an employer provides longer notification 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 supply written notice

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

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

Because case, the company needs to post a notification in the work environment (where it will be seen by the workers) setting out the names, seniority and task category of those workers the company intends to terminate and the date of the proposed termination. The publishing of the notice is thought about to be notice of termination, since the date of the posting, to an employee who is “bumped” by an employee named in the notice. However, this notification of termination need to still fulfill the length requirements set out in the ESA.

There are also unique rules 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 should be given termination pay in lieu of notification. Termination pay is a lump amount payment equivalent to the regular incomes for a regular work week that a worker would otherwise have been entitled to during the composed notice duration. A worker earns trip pay on their termination pay. Employers must likewise continue to make whatever contributions would be required to maintain the benefits the worker would have been entitled to had they continued to be employed through the notification period.

Example: Regular work week

Sarah has worked for 3 and a half years. Now her job has been removed and her work has actually been terminated. Sarah was not provided any written notification of termination.

Sarah worked 40 hours a week weekly and was paid $20.00 an hour. She likewise received four percent trip pay. Because she worked for more than 3 years however less than four years, she is entitled to three weeks’ pay in lieu of notification.

Sarah’s routine earnings for a routine 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 calculated:

4% of $2,400.00 = $96.00

Finally, her trip pay is included to her termination pay:

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The company needs to also guarantee continued coverage for any advantage or pension plans that applied to her for 3 weeks.

Example: No routine work week

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

Gerry’s company removed his position and did not give Gerry any written notification of . Gerry was ill and off work for 2 of the 12 weeks immediately preceding the day his work was ended. 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 average 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 computation of average earnings) = $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 included to his termination pay:

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer must also make sure continued coverage for any advantage or pension that applied to him for 4 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 worker’s next routine pay date, whichever is later on.

Mass termination

Special rules for notice of termination may use in cases of mass termination (when a company is terminating 50 or more staff members at its facility within a four-week duration).

Meaning of “facility”

An “establishment” is an area at which the employer brings on service. Separate places can be considered one establishment if either:

– they lie within the exact same town, or

– a worker at one area has contractual seniority rights that reach 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 “facility” includes a staff member’s home, but just if the staff member works from home and does not work at any other area where the employer continues service.

This will need that employees who work solely remotely be thought about for addition in the count when identifying whether 50 or more staff members have actually been terminated.

Note that where an employee carries out work both from their home and from another location where the company continues organization (for example, a workplace), employment their home is not included in the meaning of “establishment”. Instead, the worker is considered to have a connection to the office location and, therefore, for the function of mass termination, the worker is consisted of with respect to that workplace place.

Example: where multiple areas are considered one “establishment”

ABC Company has an office and a warehouse located in London, ON. Sabrina resides in London and works for ABC Company exclusively remotely: she performs work for the company from home and does not work at the workplace.

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

Employer responsibilities in a mass termination

When a mass termination happens, the company must finish and provide 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 workplace, if the delivery can be confirmed.

The office 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 ruled out to have actually been given up until the Form 1 is gotten by the Director; simply put, notification of mass termination is not effective till the Director receives the Form 1.

In addition to providing workers with specific notifications of termination, the employer must, on the first day of the notification period:

– post a copy of the Form 1 provided to the Director in the office where it will come to the attention of the affected employees.

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

The quantity of notification staff members need to receive in a mass termination is not based upon the workers’ length of work, but on the number of staff members who have actually been terminated. A company needs to offer:

– 8 weeks observe if the work of 50 to 199 staff members is to be ended

– 12 weeks observe if the employment of 200 to 499 staff members is to be terminated

– 16 weeks see if the employment of 500 or more staff members is to be ended

Exception to the mass termination rules

The mass termination guidelines do not use if these 2 things apply:

– the number of staff members whose employment is being terminated represents not more than 10 percent of the staff members who have been utilized for a minimum of 3 months at the facility

– none of the terminations are brought on by the irreversible discontinuance of all or part of the employer’s service at the establishment

Mass termination: resignation by an employee

A worker who has actually received termination notice under the mass termination rules who wishes to resign before the termination date supplied in the company’s notice must provide the employer at least one week’s written notification of resignation if the staff member has actually been employed for less than two years. If the employment period has been two years or more, the staff member should provide a minimum of 2 weeks’ written notification of resignation. However, the worker does not need to provide notification of resignation if the employer constructively dismisses the staff member or breaches a term of the agreement.

Temporary work after termination date in notice

An employer can supply work to a staff member 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 original date of the termination and without being needed to offer any further notification of termination to the staff member when the momentary work ends.

If a staff member works beyond the 13-week duration after the termination date and after that has their work terminated, the staff member will be entitled to a brand-new written notification of termination as if the previous notice had never been given. The staff member’s duration of employment will then likewise include the period 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 work. This right is typically discovered in cumulative agreements.

A worker who has recall rights and who is entitled to termination pay since of a layoff of 35 weeks or more might 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

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

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

If an employee who is not represented by a trade union chooses to keep their recall rights or fails to choose, the company needs to send out the quantity of the termination pay (and severance pay, 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 make a choice, the employer and the trade union should attempt to come to an arrangement to hold the termination pay (and severance pay, if any) in trust for the staff member. If they can not concern an arrangement, and the trade union encourages the employer and the Director of Employment Standards in composing that efforts have actually failed, the employer must send the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If a staff member chooses to quit their recall rights or if the recall rights end, the cash that is kept in trust should be sent to the worker.

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

Exemptions to observe of termination or termination pay

A lot of these exemptions are complex. Please call the Employment Standards Information Centre, 1-800-531-5551, if you need more info. Please also describe the special rule tool.

The notice 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 unimportant and has actually not been excused by the employer. Note: “wilful” consists of when a worker planned the resulting effect or acted recklessly if they knew or ought to have known the results their conduct would have. Poor work conduct that is unexpected or unintended is generally not thought about wilful;

– was worked with for a particular length of time or until the conclusion of a particular job. However, such a staff member will be entitled to notice of termination or termination pay if:- the employment ends before the term expires or the task is finished; or

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

– the work continues for 3 months or more after the term expires or the job is completed;

See also: Employment Standards Self-Service Tool

Wrongful termination

Rights greater than ESA notification of termination, termination pay, severance pay

The guidelines under the ESA about termination and severance of employment are minimum requirements. Some staff members may have rights under the typical law that are higher than the rights to notice of termination (or termination pay) and severance pay under the ESA. An employee may want to sue their previous employer in court for “wrongful termination”. Employees must know that they can not take legal action against an employer for wrongful termination and file a claim for termination pay or severance pay with the ministry for the very same termination or severance of work. An employee needs to pick one or the other. Employees may want to acquire legal advice worrying their rights.