Termination Of Employment

A variety of expressions are commonly utilized to describe scenarios when work is terminated. These include “release,” “released,” “dismissed,” “fired” and “permanently laid off.”

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

– dismisses or employment stops using a staff member, including where a worker is no longer used due to the insolvency or insolvency of the employer;

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

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

Most of the times, when a company ends the work of an employee who has actually been continually employed for three months, the company should provide the worker with either written notice of termination, termination pay or a combination (as long as the notice and the variety of weeks of termination pay together equivalent the length of notice the staff member is entitled to get).

The ESA does not require a company to offer a worker a reason that their work is being ended. There are, nevertheless, some situations where a company can not terminate a worker’s employment even if the employer is prepared to give appropriate composed notice or termination pay. For example, an employer can not end somebody’s employment, or punish them in any other way, if any part of the reason for the termination of employment is based on the worker 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 maximums, or taking a leave of absence defined in the ESA. Please see the chapter on reprisals.

Receiving termination notification or pay in lieu

Certain employees are not entitled to observe of termination or termination pay under the ESA. Examples include: staff members who are guilty of wilful misconduct, disobedience, or wilful disregard of task that is not trivial and has not been condoned by the employer. Other examples include construction workers, employees on momentary layoff, staff members who decline an offer of affordable alternative employment and employees who have been utilized less than three months.

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

The termination-of-employment guidelines are completely different from any privileges a staff member might need to be paid severance pay under the ESA.

Constructive termination

A constructive dismissal may happen when an employer makes a substantial change to an essential term or condition of an employee’s work without the employee’s real or implied consent.

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

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

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

Temporary layoff

An employee is on short-lived layoff when a company cuts down or stops the staff member’s work without ending their employment (for instance, laying someone off sometimes when there is not sufficient work to do). The mere fact that the employer does not define a recall date when laying the worker off does not necessarily indicate that the lay-off is not momentary. Note, nevertheless, that a lay-off, even if intended to be momentary, might lead to useful dismissal if it is not allowed 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 earn (or makes usually) in a week.

A week of layoff does not include any week in which the staff member did not work for several days since the worker was not able or readily available to work, went through disciplinary suspension, or was not supplied with work because of a strike or lockout at their location of employment or in other places.

Employers are not needed under the ESA to supply workers with a written notice of a short-lived layoff, nor do they have to provide a reason for the lay-off. (They may, nevertheless, be needed to do these things under a cumulative agreement or a work agreement.)

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

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

2. more than 13 weeks in any period of 20 consecutive weeks, however less than 35 weeks of layoff in any duration of 52 consecutive weeks, where:- the employee continues to receive significant payments from the company;
or

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

– the worker receives supplemental welfare;
or

– the staff member would be entitled to get additional unemployment benefits however isn’t getting them because they are used in other places;
or

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

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

If an employee is laid off for a period longer than a temporary layoff as set out above, the company is thought about to have terminated the staff member’s work. Generally, the staff member will then be entitled to termination pay.

Written notice of termination and termination pay

Under the ESA, an employer can terminate the employment of a worker who has been utilized constantly for 3 months or more if either:

– the employer has given the employee proper composed notice of termination and the notice duration has ended

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

Written notification of termination

A staff member is entitled to notice of termination (or termination pay rather of notification) if they have been continuously employed for at least 3 months. An individual is thought about “used” not just while they are actively working, however also throughout whenever in which they are not working but the employment relationship still exists (for example, time in which the employee is off ill or on leave or on lay-off).

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

– if a lay-off goes on longer than a temporary lay-off, the staff member’s employment is considered (or thought about) 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 period of employment, although the staff member might still be employed for purposes of the “continuously utilized for 3 months” qualification

– if 2 separate periods of work are separated by more than 13 weeks, just the most current duration counts for functions of notice of termination

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

The following chart defines the quantity of notification needed:

Note: Special guidelines identify the quantity of notice required when it comes to mass terminations – where the employment of 50 or more employees is ended at a company’s establishment within a four-week period.

Requirements throughout the statutory notice period

During the statutory notification duration, a company should:

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

– continue to make whatever contributions would be required to keep the worker’s benefits strategies; and

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

Regular rate

This is a worker’s rate of spend for each non-overtime hour of work in the worker’s work week.

Regular incomes

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

Regular work week

For a worker who usually works the very same number of hours every week, a regular work week is a week of that numerous hours, not including overtime hours.

Some staff members do not have a regular work week. That is, they do not work the exact same variety of hours every week or employment they are paid on a basis besides time. For these employees, the “regular incomes” for a “regular work week” is the average amount of the routine salaries earned by the employee in the weeks in which the worker worked throughout the of 12 weeks instantly preceding the date the notice was given.

An employer is not allowed to schedule a worker’s holiday time throughout the statutory notice period unless the employee-after receiving composed notice of termination of employment-agrees to take their trip time throughout the notice period.

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

How to supply written notice

For the most part, written notice of termination of employment need to be resolved to the employee. It can be supplied personally or by mail, fax or e-mail, as long as shipment can be validated.

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

In that case, the company should publish a notification in the office (where it will be seen by the workers) setting out the names, seniority and task classification of those staff members the employer means to terminate and the date of the proposed termination. The publishing of the notice is considered to be notification of termination, since the date of the posting, to an employee who is “bumped” by an employee named in the notice. However, this notice of termination need to still fulfill the length requirements set out in the ESA.

There are also unique rules regarding how notification is supplied when there is a mass termination.

Termination pay

A staff member who does not receive the written notification required under the ESA should be offered termination pay in lieu of notice. Termination pay is a lump sum payment equivalent to the routine wages for a regular work week that a staff member would otherwise have been entitled to during the composed notification duration. A staff member makes getaway pay on their termination pay. Employers need to likewise continue to make whatever contributions would be needed to maintain the advantages the employee would have been entitled to had they continued to be used through the notice period.

Example: Regular work week

Sarah has worked for 3 and a half years. Now her task has been eliminated and her employment has been ended. Sarah was not offered any composed notice of termination.

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

Sarah’s routine wages for a routine work week are determined:

$ 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 getaway pay on her termination pay is determined:

4% of $2,400.00 = $96.00

Finally, her holiday 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 likewise make sure ongoing protection for any benefit or pension plans that used to her for three weeks.

Example: No routine work week

Gerry has actually worked at a nursing home for 4 years. He works every week, but his hours vary from week to week. His rate of pay is $25.00 an hour, and he is paid 6 per cent vacation pay.

Gerry’s employer removed his position and did not provide Gerry any written notice of termination. Gerry was ill and off work for two 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 four weeks of termination pay.

Gerry’s typical profits each week are determined:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for 2 weeks therefore these weeks are not included in the estimation of typical revenues) = $180.00 a week

His termination pay is determined:

$ 180.00 × 4 weeks = $720.00

Then his holiday pay on his termination pay is determined:

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 employer must also guarantee continued coverage for any advantage or pension that applied to him for employment four weeks.

When to pay termination pay

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

Mass termination

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

Meaning of “establishment”

An “establishment” is a location at which the employer continues business. Separate areas can be thought about one facility if either:

– they are located within the very same town, or

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

Effective October 26, 2023, in cases of mass termination, the term “facility” includes an employee’s home, however just if the employee works from home and does not operate at any other place where the employer brings on organization.

This will need that staff members who work exclusively from another location be thought about for inclusion in the count when identifying whether 50 or more workers have actually been terminated.

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

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

ABC Company has an office and a warehouse situated in London, ON. Sabrina lives in London and works for ABC Company solely from another location: she performs work for the company from home and does not operate at the office.

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

Employer obligations in a mass termination

When a mass termination occurs, the employer must 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 delivery to the Director’s office on a day and at a time when it is open.

– mail shipment to the Director’s workplace, if the shipment 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 affected employees is not thought about to have actually been provided until the Form 1 is gotten by the Director; simply put, notice of mass termination is not efficient until the Director gets the Form 1.

In addition to offering workers with individual notifications of termination, the employer must, on the very first day of the notification duration:

– publish a copy of the Form 1 provided to the Director in the office where it will pertain to the attention of the impacted employees.

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

The quantity of notification employees must receive in a mass termination is not based on the staff members’ length of employment, but on the number of staff members who have been terminated. An employer should give:

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

– 12 weeks observe if the work of 200 to 499 workers is to be terminated

– 16 weeks see if the employment of 500 or more workers is to be terminated

Exception to the mass termination rules

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

– the number of workers whose work is being terminated represents not more than 10 per cent of the employees who have been used for a minimum of three months at the facility

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

Mass termination: resignation by an employee

A worker who has gotten termination notice under the mass termination rules who wishes to resign before the termination date provided in the employer’s notification should give the employer a minimum of one week’s composed notification of resignation if the staff member has been employed for less than two years. If the work duration has actually been two years or more, the employee should offer at least 2 weeks’ composed notice of resignation. However, the worker does not have to notify of resignation if the employer constructively dismisses the worker or breaches a term of the agreement.

Temporary work after termination date in notice

A company can offer work to a staff member who has actually been offered notification of termination on a momentary basis in the 13-week duration after the termination date set out in the notification without impacting the initial date of the termination and without being needed to supply any additional notice of termination to the employee when the short-term work ends.

If a worker works beyond the 13-week period after the termination date and then has their employment terminated, the staff member will be entitled to a brand-new written notice of termination as if the previous notification had never ever been provided. The employee’s period of work will then also include the period of short-term 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 employment. This right is typically discovered in collective arrangements.

A worker who has recall rights and who is entitled to termination pay due to the fact that of a layoff of 35 weeks or more may choose to:

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

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

If a staff member is entitled to both termination pay and severance pay, they must make the very same choice for both.

If a staff member who is not represented by a trade union elects to keep their recall rights or stops working to decide, the company needs to send the amount of the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the money in trust.

If an employee who is represented by a trade union elects to keep their recall rights or stops working to make a choice, the employer and the trade union must attempt to come to a plan to hold the termination pay (and severance pay, if any) in trust for the employee. If they can not come to a plan, and the trade union encourages the employer and the Director of Employment Standards in writing that efforts have stopped working, the employer must send out the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the money in trust.

If a worker chooses to quit their recall rights or if the recall rights end, the cash that is held in trust needs to be sent out to the worker.

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

Exemptions to discover of termination or termination pay

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

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

– is guilty of wilful misbehavior, disobedience or wilful overlook of responsibility that is not unimportant and has actually not been condoned by the employer. Note: “wilful” includes when a staff member planned the resulting consequence or acted recklessly if they knew or must have understood the impacts their conduct would have. Poor work conduct that is unexpected or unintended is usually not considered wilful;

– was hired for a specific length of time or till the completion of a specific job. However, such a staff member will be entitled to notice of termination or termination pay if:- the work ends before the term expires or the job is finished; or

– the term ends or the task is not completed more than 12 months after the employment began; or

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

See likewise: Employment Standards Self-Service Tool

Wrongful dismissal

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

The rules under the ESA about termination and severance of employment are minimum requirements. Some staff members may 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. A staff member may want to sue their former company in court for “wrongful termination”. Employees ought to be aware that they can not take legal action against a company for wrongful termination and sue for termination pay or severance pay with the ministry for the same termination or severance of work. An employee must pick one or the other. Employees might want to acquire legal recommendations worrying their rights.