Termination Of Employment

A variety of expressions are typically used to describe situations when employment is ended. These consist of “let go,” “discharged,” “dismissed,” “fired” and “permanently laid off.”

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

– dismisses or stops employing an employee, consisting of where an employee is no longer employed due to the bankruptcy or insolvency of the employer;

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

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

For the most part, when an employer ends the employment of an employee who has actually been continuously used for 3 months, the employer should offer the employee with either composed 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 notice the worker is entitled to receive).

The ESA does not require an employer to provide an employee a reason that their employment is being ended. There are, however, some circumstances where a company can not terminate a worker’s employment even if the employer is prepared to give appropriate written notification or termination pay. For example, an employer can not end somebody’s work, or punish them in any other way, if any part of the reason for the termination of work is based upon the employee 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 absence defined in the ESA. Please see the chapter on reprisals.

Qualifying for termination notice or pay in lieu

Certain staff members are not entitled to observe of termination or termination pay under the ESA. Examples include: staff members who are guilty of wilful misbehavior, disobedience, or wilful disregard of duty that is not minor and has actually not been excused by the employer. Other examples consist of construction staff members, employees on temporary layoff, employees who refuse an offer of affordable alternative work and staff members who have actually been used less than 3 months.

There are a number of other exemptions to the termination of work provisions of the ESA. See “Exemptions to see of termination or termination pay.” Please likewise describe the unique guideline tool.

The termination-of-employment guidelines are entirely separate from any entitlements a staff member might have to be paid discontinuance wage under the ESA.

Constructive termination

A positive termination might occur when an employer makes a considerable change to a fundamental term or job condition of a worker’s work without the employee’s actual or implied permission.

For instance, a worker may be constructively dismissed if the company makes modifications to the staff member’s terms of work that result in a substantial decrease in wage or a considerable unfavorable change in such things as the worker’s work place, hours of work, authority, or position. Constructive termination might also consist of circumstances where an employer bugs or abuses an employee, or an employer gives a staff member a demand to “give up or be fired” and the employee resigns in response.

The worker would have to resign in response to the modification within an affordable amount of time 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 hard topic. For more details on constructive dismissal, please call 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 worker’s work without ending their employment (for instance, laying somebody off at times when there is insufficient work to do). The mere fact that the company does not specify a recall date when laying the employee off does not necessarily imply that the lay-off is not momentary. Note, however, that a lay-off, even if intended to be short-term, might lead to useful dismissal if it is not enabled by the work agreement.

For the purposes of the termination provisions 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 typically) in a week.

A week of layoff does not consist of any week in which the staff member did not work for job several days since the worker was unable or available to work, went through disciplinary suspension, or was not supplied with work since of a strike or lockout at their place of work or somewhere else.

Employers are not needed under the ESA to offer staff members with a written notice of a temporary layoff, nor do they need to offer a reason for the lay-off. (They may, however, be needed to do these things under a cumulative arrangement or a work agreement.)

Under the ESA, a “temporary 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 duration of 20 successive weeks, but less than 35 weeks of layoff in any duration of 52 consecutive weeks, where:- the worker continues to receive significant payments from the company;
or

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

– the staff member gets supplementary welfare;
or

– the staff member would be entitled to receive additional unemployment benefits but isn’t receiving them since they are used elsewhere;
or

– the employer remembers the staff member 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 an agreement with a worker who is not represented by a trade union;
or

3. a layoff longer than a layoff described in ‘B’ where the company remembers a staff member who is represented by a trade union within the time set out in an arrangement between the union and the company.

If a worker is laid off for a duration longer than a momentary layoff as set out above, the employer is considered to have terminated the staff member’s employment. Generally, the worker will then be entitled to termination pay.

Written notice of termination and termination pay

Under the ESA, a company can end the employment of an employee who has actually been utilized constantly for three months or more if either:

– the company has given the staff member correct written notification of termination and the notice period has expired

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

Written notification of termination

A worker is entitled to notice of termination (or termination pay instead of notification) if they have actually been constantly employed for a minimum of three months. An individual is thought about “used” not just while they are actively working, however likewise throughout any time in which they are not working however the work relationship still exists (for example, time in which the staff member is off ill or on leave or on lay-off).

The quantity of notice to which an employee is entitled depends on their “duration of work”. A worker’s duration of work consists of not only all time while the staff member is actively working however likewise whenever 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 worker’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 employee’s period of employment, even though the staff member may still be utilized for purposes of the “constantly employed for three months” qualification

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

It is possible, in some scenarios, for an individual to have been “constantly utilized” for three months or more and yet have a duration of employment of less than three months. In such circumstances, the employee would be entitled to see because a worker who has actually been continually used for a minimum of 3 months is entitled to observe, and the minimum notification entitlement of one week applies to a staff member with a duration of employment of any length less than one year.

The following chart defines the quantity of notice needed:

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

Requirements throughout the statutory notification duration

During the statutory notification period, an employer should:

– not decrease the staff member’s wage rate or modify 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 worker the earnings they are entitled to, job which can not be less than the worker’s regular wages for a routine work week every week.

Regular rate

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

Regular wages

These are salaries aside from overtime pay, vacation pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and severance pay and particular legal entitlements.

Regular work week

For a staff member who normally works the very same variety of hours each week, a regular work week is a week of that lots of hours, not including overtime hours.

Some employees do not have a routine work week. That is, they do not work the very same number of hours weekly or they are paid on a basis aside from time. For these employees, the “routine earnings” for a “routine work week” is the typical quantity of the routine earnings earned by the worker in the weeks in which the employee worked throughout the period of 12 weeks right away preceding the date the notice was given.

An employer is not permitted to set up an employee’s getaway time during the statutory notice duration unless the employee-after getting composed notification of termination of employment-agrees to take their holiday time during the notification duration.

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

How to supply written notification

For the most part, written notice of termination of employment must be dealt with to the employee. It can be provided in individual or by mail, fax or email, as long as shipment can be verified.

There are special guidelines for providing notification of termination if a staff member has an agreement of employment or a collective agreement that offers seniority rights that allow an employee who is to be laid off or whose work is to be terminated to displace (” bump”) other workers.

In that case, the employer should publish a notification in the workplace (where it will be seen by the employees) setting out the names, seniority and job classification of those staff members the company plans to end and the date of the proposed termination. The publishing of the notification is considered to be notice of termination, since the date of the posting, to a worker who is “bumped” by an employee called in the notification. However, this notice of termination should still satisfy the length requirements set out in the ESA.

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

Termination pay

A staff member who does not get the composed notice required under the ESA should be given termination pay in lieu of notice. Termination pay is a lump amount payment equivalent to the regular earnings for job a regular work week that an employee would otherwise have actually been entitled to during the written notice period. A worker earns vacation pay on their termination pay. Employers should also continue to make whatever contributions would be required to preserve the benefits the staff member would have been entitled to had they continued to be employed through the notice period.

Example: Regular work week

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

Sarah worked 40 hours a week weekly and was paid $20.00 an hour. She also got 4 percent holiday pay. Because she worked for more than 3 years but less than four years, she is entitled to 3 weeks’ pay in lieu of notice.

Sarah’s routine earnings for a regular 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 holiday pay on her termination pay is computed:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The company should likewise guarantee continued coverage for any benefit or pension that applied to her for 3 weeks.

Example: No routine work week

Gerry has worked at an assisted living home for four years. He works every week, however his hours vary from week to week. His rate of pay is $25.00 an hour, and he is paid 6 per cent holiday pay.

Gerry’s employer removed his position and did not give Gerry any composed notice of termination. Gerry was ill and off work for two of the 12 weeks instantly preceding the day his work was terminated. Gerry made $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 profits each week are computed:

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

His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00

Then his holiday pay on his termination pay is calculated:

6% of $720.00 = $43.20

Finally, his holiday pay is added to his termination pay:

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company must also ensure ongoing protection for any advantage or job pension plans that used to him for four weeks.

When to pay termination pay

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

Mass termination

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

Meaning of “facility”

An “facility” is a location at which the employer brings on company. Separate places can be thought about one establishment if either:

– they lie within the very same town, or

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

Effective October 26, 2023, in cases of mass termination, the term “facility” consists of a staff member’s home, however just if the employee works from home and does not work at any other area where the company brings on organization.

This will need that employees who work exclusively remotely be thought about for inclusion in the count when figuring out whether 50 or more staff members have actually been ended.

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

Example: where numerous areas 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 specifically from another location: she performs work for the company from home and does not work at the office.

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

Employer commitments in a mass termination

When a mass termination happens, 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 office on a day and at a time when it is open.

– mail delivery to the Director’s office, if the delivery can be verified.

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

Any notification to the affected workers is not considered to have been given up until the Form 1 is gotten by the Director; in other words, notice of mass termination is not efficient up until the Director receives the Form 1.

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

– post a copy of the Form 1 supplied to the Director in the office where it will concern the attention of the affected workers.

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

The quantity of notice staff members should receive in a mass termination is not based upon the staff members’ length of employment, however on the variety of staff members who have been ended. A company needs to give:

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

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

– 16 weeks observe if the work of 500 or more staff members is to be ended

Exception to the mass termination guidelines

The mass do not apply if these 2 things use:

– the number of workers whose work is being terminated represents not more than 10 percent of the workers who have actually been employed for a minimum of 3 months at the facility

– none of the terminations are brought on by the long-term discontinuance of all or part of the employer’s business at the facility

Mass termination: resignation by a staff member

A staff member who has actually gotten termination notification under the mass termination rules who wishes to resign before the termination date supplied in the company’s notification must give the company at least one week’s composed notification of resignation if the worker has actually been employed for less than 2 years. If the employment duration has been 2 years or more, the staff member should provide at least two weeks’ composed notice of resignation. However, the worker does not have to notify of resignation if the company constructively dismisses the staff member or breaches a regard to the contract.

Temporary work after termination date in notification

An employer can offer work to a staff member who has been notified of termination on a short-lived basis in the 13-week period after the termination date set out in the notice without impacting the original date of the termination and without being needed to offer any additional notification of termination to the staff member when the short-lived work ends.

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

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

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

If a staff member who is not represented by a trade union elects to keep their recall rights or stops working to choose, 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 cash in trust.

If a worker who is represented by a trade union elects to keep their recall rights or fails to make a choice, the employer and the trade union need to 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 a plan, and the trade union recommends the company and the Director of Employment Standards in writing that efforts have stopped working, the company should send the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If an employee selects to quit their recall rights or if the recall rights end, the cash that is kept 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 gone back to the employer.

Exemptions to see of termination or termination pay

Many of these exemptions are intricate. Please contact the Employment Standards Information Centre, 1-800-531-5551, if you need more info. Please also describe the special guideline tool.

The notice of termination and termination pay requirements of the ESA do not use to a worker who:

– is guilty of wilful misbehavior, disobedience or wilful overlook of task that is not minor and has not been condoned by the company. Note: “wilful” includes when a worker planned the resulting consequence or acted recklessly if they understood or must have understood the effects their conduct would have. Poor work conduct that is unintentional or unintentional is typically not thought about wilful;

– was employed for a particular length of time or till the conclusion of a specific job. However, such a worker will be entitled to notice of termination or termination pay if:- the employment ends before the term ends or the job is completed; or

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

– the work continues for three months or more after the term ends or the task 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 workers 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. An employee may want to sue their former employer in court for “wrongful termination”. Employees need to understand that they can not take legal action against an employer for wrongful dismissal and sue for termination pay or severance pay with the ministry for the same termination or severance of employment. An employee must select one or the other. Employees might wish to get legal suggestions concerning their rights.