Termination Of Employment

A variety of expressions are typically utilized to describe circumstances when employment is terminated. These include “let go,” “discharged,” “dismissed,” “fired” and “completely laid off.”

Under the Employment Standards Act, 2000 (ESA) a person’s work is ended if the employer:

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

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

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

In many cases, when a company ends the employment of a staff member who has actually been constantly employed for three months, the company should supply the worker with either written notice of termination, termination pay or a mix (as long as the notification and the number of weeks of termination pay together equal the length of notification the staff member is entitled to receive).

The ESA does not need an employer to give a worker a reason that their employment is being terminated. There are, nevertheless, some circumstances where an employer can not terminate a worker’s work even if the employer is prepared to give appropriate written notification or termination pay. For example, an employer can not end someone’s work, or punish them in any other way, if any part of the reason for the termination of employment is based upon the staff member asking questions about the ESA or working out a right under the ESA, such as declining to work in excess of the everyday 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 observe of termination or termination pay under the ESA. Examples include: workers who are guilty of wilful misbehavior, disobedience, or wilful neglect of responsibility that is not minor and has actually not been condoned by the employer. Other examples include building workers, workers on short-lived layoff, employees who decline an offer of reasonable alternative work and employees who have been employed less than three months.

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

The termination-of-employment guidelines are totally different from any privileges a worker may need to be paid discontinuance wage under the ESA.

Constructive termination

A useful termination might happen when an employer makes a substantial modification to a basic term or condition of an employee’s employment without the employee’s real or implied consent.

For example, a staff member may be constructively dismissed if the company makes modifications to the staff member’s terms and conditions of employment that lead to a considerable decrease in income or a significant unfavorable modification in such things as the staff member’s work place, hours of work, authority, or position. Constructive termination might also include situations where an employer bugs or abuses a worker, or a company gives a staff member a warning to “quit or be fired” and the staff member resigns in response.

The worker would need to resign in reaction to the modification within an affordable time period in order for the employer’s actions to be thought about a termination of work for purposes of the ESA.

Constructive dismissal is a complex and difficult topic. To find out more on constructive termination, please contact the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

An employee is on momentary layoff when an employer cuts down or stops the employee’s work without ending their work (for instance, laying somebody off at times when there is inadequate work to do). The mere fact that the company does not specify a recall date when laying the staff member off does not necessarily imply that the lay-off is not short-term. Note, however, that a lay-off, even if meant to be temporary, may lead to useful dismissal if it is not permitted by the work agreement.

For the purposes 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 ordinarily make (or earns typically) in a week.

A week of layoff does not include any week in which the employee did not work for one or more days since the worker was unable or available to work, went through disciplinary suspension, or was not offered with work due to the fact that of a strike or lockout at their location of work or in other places.

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

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

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

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

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

– the employee gets additional welfare;
or

– the worker would be entitled to receive supplemental welfare however isn’t receiving them due to the fact that they are employed in other places;
or

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

If a worker is laid off for a period longer than a momentary layoff as set out above, the employer is thought about to have terminated the worker’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 work of a staff member who has been used continually for 3 months or more if either:

– the employer has given the worker correct composed notice of termination and the notice duration has expired

– the company pays termination pay to the staff member where no or less notice than is required is provided

Written notification of termination

A staff member is entitled to discover of termination (or termination pay rather of notice) if they have been constantly used for at least three months. A person is thought about “employed” not just while they are actively working, but also throughout at any time in which they are not working however the work relationship still exists (for instance, time in which the worker is off sick or on leave or on lay-off).

The amount of notification to which a staff member is entitled depends on their “duration of employment“. A staff member’s period of work includes not just perpetuity while the staff member is actively working but also at any time that they are not working however the work 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 been terminated on the very first day of the lay-off-any time after that does not count as part of the worker’s period of work, despite the fact that the staff member might still be utilized for purposes of the “constantly used for 3 months” qualification

– if 2 different durations of work are separated by more than 13 weeks, just the most recent period counts for purposes of notification of termination

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

The following chart defines the amount of notice needed:

Note: Special guidelines identify the amount of notice required when it comes to mass terminations – where the work of 50 or more staff members is ended at a company’s facility within a four-week duration.

Requirements throughout the statutory notification period

During the statutory notice duration, an employer needs to:

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

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

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

Regular rate

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

Regular incomes

These are salaries aside from overtime pay, getaway pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of task pay, termination pay and severance pay and particular contractual privileges.

Regular work week

For a staff member who usually works the exact same variety of hours weekly, 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 number of hours each week or they are paid on a basis other than time. For these staff members, the “routine earnings” for a “regular work week” is the average quantity of the regular earnings earned by the employee in the weeks in which the worker worked throughout the period of 12 weeks instantly preceding the date the notification was offered.

A company is not enabled to set up an employee’s trip time throughout the statutory notice period unless the employee-after receiving written notification of termination of employment-agrees to take their trip time throughout the notification period.

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

How to provide written notification

In many cases, composed notification of termination of work should be resolved to the employee. It can be supplied in person or by mail, fax or email, as long as delivery can be validated.

There are special rules for offering notification of termination if a worker has a contract of employment or a collective contract that offers seniority rights that enable a staff member who is to be laid off or whose employment is to be ended to displace (” bump”) other employees.

In that case, the company must post a notification in the office (where it will be seen by the employees) setting out the names, seniority and task category of those workers the employer plans to terminate and the date of the proposed termination. The posting of the notification is considered to be notice of termination, as of the date of the posting, to a worker who is “bumped” by a worker called in the notice. However, this notice of termination should still satisfy the length requirements set out in the ESA.

There are also unique rules concerning how notification is provided when there is a mass termination.

Termination pay

A staff member who does not receive the composed notification required under the ESA must be provided termination pay in lieu of notice. Termination pay is a swelling sum payment equivalent to the routine incomes for a regular work week that a staff member would otherwise have actually been entitled to during the written notification period. A staff member earns holiday pay on their termination pay. Employers need to also continue to make whatever contributions would be needed to preserve the benefits the worker would have been entitled to had they continued to be utilized through the notification period.

Example: Regular work week

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

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

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

$ 20.00 an hour X 40 hours a week = $800.00 a week

Her termination pay is computed:

$ 800.00 X 3 weeks = $2,400.00

Then her vacation pay on her termination pay is calculated:

4% of $2,400.00 = $96.00

Finally, her vacation pay is contributed to her termination pay:

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The employer needs to likewise make sure continued coverage for any benefit or pension that used to her for 3 weeks.

Example: No routine work week

Gerry has worked at a retirement home for four years. He works every week, but 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 employer eliminated his position and did not provide Gerry any written notice of termination. Gerry was ill and off work for two of the 12 weeks instantly preceding the day his work was ended. Gerry earned $1,800.00 in the 12 weeks before the day on which his work ended.

Gerry is entitled to four weeks of termination pay.

Gerry’s typical incomes per week are determined:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off sick for 2 weeks for that reason these weeks are not consisted of in the estimation of typical profits) = $180.00 a week

His termination pay is computed:

$ 180.00 × 4 weeks = $720.00

Then his trip pay on his termination pay is calculated:

6% of $720.00 = $43.20

Finally, his getaway pay is contributed to his termination pay:

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer should also make sure ongoing protection for any benefit or pension that applied to him for 4 weeks.

When to pay termination pay

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

Mass termination

Special rules for notice of termination may apply in cases of mass termination (when an employer is ending 50 or more employees at its establishment within a four-week duration).

Meaning of “facility”

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

– they are located within the same municipality, or

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

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

This will need 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 an employee carries out work both from their home and from another place where the company continues organization (for example, an office), their home is not consisted of in the meaning of “facility”. Instead, the worker is considered to have a connection to the office place and, for that reason, for the purpose of mass termination, the staff member is consisted of with respect to that office location.

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

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

For the purpose of mass termination, the business’s London office, London storage facility and Sabrina’s London home are considered one “establishment.”

Employer obligations in a mass termination

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

– e-mail 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 delivery to the Director’s workplace, if the delivery can be validated.

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

Any notice to the affected workers is not thought about to have actually been offered up until the Form 1 is gotten by the Director; simply put, notification of mass termination is not effective until the Director receives the Form 1.

In addition to supplying employees with specific notices of termination, the company must, on the very first day of the notice duration:

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

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

The amount of notice workers must get in a mass termination is not based upon the workers’ length of employment, but on the variety of workers who have actually been ended. A company must provide:

– 8 weeks notice if the work of 50 to 199 staff members is to be terminated

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

– 16 weeks see if the work of 500 or more employees is to be ended

Exception to the mass termination rules

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

– the variety of workers whose employment is being terminated represents not more than 10 percent of the employees who have actually been used for a minimum of 3 months at the facility

– none of the terminations are triggered by the long-term discontinuance of all or part of the employer’s organization at the establishment

Mass termination: resignation by an employee

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

Temporary work after termination date in notice

A company can provide work to a staff member who has actually been notified of termination on a temporary basis in the 13-week duration after the termination date set out in the notification without impacting the original date of the termination and without being required to supply any more notification of termination to the staff member when the temporary work ends.

If an employee works beyond the 13-week duration after the termination date and after that has their employment terminated, the staff member will be entitled to a new composed notice of termination as if the previous notification had never been provided. The staff member’s duration of employment will then also consist of the duration 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 employer under a term or condition of employment. This right is typically discovered in collective arrangements.

A staff member who has recall rights and who is entitled to termination pay due to the fact that of a layoff of 35 weeks or more might pick to:

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

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

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

If a worker who is not represented by a trade union elects to keep their recall rights or fails to choose, the employer must send the quantity of the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If a worker who is represented by a trade union elects to keep their recall rights or fails to choose, the company and the trade union need to attempt to come to a plan to hold the termination pay (and discontinuance wage, if any) in trust for the worker. If they can not pertain to a plan, employment and the trade union advises the company and the Director of Employment Standards in writing that efforts have failed, the company needs to send out 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 provide up their recall rights or if the recall rights end, the cash that is held in trust must be sent to the employee.

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

Exemptions to observe of termination or termination pay

Many of these exemptions are intricate. Please call the Employment Standards Information Centre, employment 1-800-531-5551, if you require more information. Please also describe the unique guideline tool.

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

– is guilty of wilful misbehavior, disobedience or wilful disregard of responsibility that is not minor and has not been condoned by the company. Note: “wilful” includes when a staff member planned the resulting consequence or acted recklessly if they understood or must have known the results their conduct would have. Poor work conduct that is accidental or unintended is normally not thought about wilful;

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

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

– the employment 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 higher than ESA notice of termination, termination pay, discontinuance wage

The rules under the ESA about termination and severance of employment are minimum requirements. Some employees might have rights under the common law that are higher than the rights to discover of termination (or termination pay) and discontinuance wage under the ESA. A worker might want to sue their former employer in court for “wrongful dismissal”. Employees need to know that they can not sue an employer for wrongful termination and file a claim for termination pay or discontinuance wage with the ministry for the exact same termination or severance of employment. An employee should choose one or the other. Employees might want to get legal suggestions concerning their rights.