Termination Of Employment

A variety of expressions are frequently used to explain circumstances when employment is terminated. These consist of “let go,” “discharged,” “dismissed,” “fired” and “completely laid off.”

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

– dismisses or stops employing a worker, consisting of where a worker is no longer utilized due to the bankruptcy or insolvency of the employer;

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

– lays an employee off for a period that is longer than a “temporary layoff”.

In many cases, when an employer ends the employment of a staff member who has actually been continuously used for three months, the employer must supply the worker with either composed notice of termination, termination pay or a combination (as long as the notification and the number of weeks of termination pay together equal the length of notice the employee is entitled to receive).

The ESA does not need an employer to offer a worker a reason that their work is being ended. There are, however, some situations where a company can not terminate an employee’s work even if the employer is prepared to offer appropriate composed notification or termination pay. For instance, a company can not end someone’s employment, or punish them in any other method, if any part of the factor for the termination of employment is based upon the worker asking questions about the ESA or working out a right under the ESA, such as declining to work in excess of the day-to-day or job weekly hours of work optimums, or taking a leave of lack defined in the ESA. Please see the chapter on reprisals.

Qualifying for termination notification or pay in lieu

Certain employees are not entitled to see of termination or termination pay under the ESA. Examples consist of: staff members who are guilty of wilful misconduct, disobedience, or wilful overlook of duty that is not minor and has actually not been excused by the company. Other examples consist of construction workers, employees on momentary layoff, workers who refuse an offer of reasonable alternative work and staff members who have been utilized less than 3 months.

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

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

Constructive termination

A useful dismissal might happen when a company makes a significant change to a fundamental term or condition of an employee’s employment without the staff member’s actual or implied approval.

For instance, an employee may be constructively dismissed if the company makes changes to the worker’s terms and conditions of employment that lead to a substantial decrease in salary or a considerable unfavorable change in such things as the staff member’s work place, hours of work, authority, or position. Constructive termination might also include circumstances where an employer pesters or abuses a staff member, or a company offers a worker an ultimatum to “quit or be fired” and the worker resigns in response.

The employee would have to resign in response to the change within a sensible time period in order for the company’s actions to be considered a termination of employment for purposes of the ESA.

Constructive termination is a complex and difficult subject. For more details on constructive termination, please call the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A worker is on temporary layoff when an employer cuts down or stops the staff member’s work without ending their work (for example, laying someone off at times when there is not sufficient work to do). The mere truth that the company does not specify a recall date when laying the employee off does not necessarily suggest that the lay-off is not momentary. Note, nevertheless, that a lay-off, even if intended to be momentary, may lead to useful dismissal if it is not allowed by the employment agreement.

For the functions of the termination arrangements of the ESA, a “week of layoff” is a week in which the worker made less than half of what they would generally earn (or earns on average) in a week.

A week of layoff does not consist of any week in which the employee did not work for several days because the staff member was not able or offered to work, underwent disciplinary suspension, or was not offered with work due to the fact that of a strike or lockout at their place of work or elsewhere.

Employers are not required under the ESA to supply workers with a composed notification of a short-term layoff, nor do they need to supply a reason for the lay-off. (They may, nevertheless, be required to do these things under a cumulative arrangement 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, but less than 35 weeks of layoff in any period of 52 consecutive weeks, job where:- the employee continues to get considerable payments from the employer;
or

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

– the worker gets supplemental joblessness benefits;
or

– the worker would be entitled to get supplemental welfare however isn’t receiving them due to the fact that they are utilized somewhere else;
or

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

– the employer 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 employer recalls 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 staff member is laid off for a duration longer than a momentary layoff as set out above, the company is thought about to have actually ended the employee’s employment. Generally, the employee will then be entitled to termination pay.

Written notification of termination and termination pay

Under the ESA, an employer can terminate the employment of a staff member who has actually been utilized constantly for three months or more if either:

– the company has actually given the worker correct written notification of termination and the notification period has actually ended

– the employer pays termination pay to the staff member where no composed notification or less notification than is required is given

Written notice of termination

A worker is entitled to discover of termination (or termination pay rather of notification) if they have actually been constantly utilized for at least 3 months. An individual is considered “utilized” not only while they are actively working, however likewise throughout any time in which they are not working but the employment relationship still exists (for example, time in which the worker is off ill or on leave or on lay-off).

The quantity of notification to which an employee is entitled depends upon their “period of employment”. A worker’s duration of work includes not only all time while the staff member is actively working but likewise whenever that they are not working but 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 ended on the first day of the lay-off-any time after that does not count as part of the employee’s period of work, although the staff member might still be used for purposes of the “continuously employed for 3 months” qualification

– if two different periods of work are separated by more than 13 weeks, only the most current duration counts for functions of notification of termination

It is possible, in some scenarios, for an individual to have actually been “constantly utilized” for 3 months or more and yet have a duration of work of less than 3 months. In such circumstances, the employee would be entitled to notice since an employee who has actually been constantly utilized for at least 3 months is entitled to see, and the minimum notification privilege of one week uses to an employee with a period of work of any length less than one year.

The following chart defines the quantity of notice required:

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

Requirements throughout the statutory notification period

During the statutory notice duration, a company must:

– not reduce the worker’s wage rate or change any other term or condition of employment;

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

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

Regular rate

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

Regular salaries

These are earnings besides overtime pay, holiday pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of task pay, termination pay and severance pay and certain legal entitlements.

Regular work week

For an employee who usually works the very same number of hours each week, a routine work week is a week of that many hours, not including overtime hours.

Some workers do not have a routine work week. That is, they do not work the same number of hours each week or they are paid on a basis aside from time. For these workers, the “regular incomes” for a “regular work week” is the average amount of the regular incomes made by the employee in the weeks in which the worker worked during the period of 12 weeks instantly preceding the date the notification was given.

A company is not enabled to arrange a staff member’s vacation time during the statutory notification period unless the employee-after getting written notice of termination of employment-agrees to take their vacation time throughout the notification period.

If an employer offers longer notification than is required, the statutory part of the notice duration is the last part of the duration that ends on the date of termination.

How to supply written notification

For the most part, composed notification of termination of work must be resolved to the worker. It can be provided personally or by mail, fax or e-mail, as long as delivery can be validated.

There are unique rules for offering notice of termination if a worker has an agreement of employment or a cumulative contract that provides seniority rights that permit an employee who is to be laid off or whose work is to be terminated to displace (” bump”) other workers.

Because case, the company should post a notice in the workplace (where it will be seen by the staff members) setting out the names, seniority and task category of those workers the employer intends to end and the date of the proposed termination. The posting of the notice is considered to be notification of termination, since the date of the publishing, job to a worker who is “bumped” by an employee named in the notice. However, this notice of termination must still satisfy the length requirements set out in the ESA.

There are also special rules relating to how notice is offered when there is a mass termination.

Termination pay

A staff member who does not receive the composed notice needed under the ESA should be provided termination pay in lieu of notification. Termination pay is a lump sum payment equivalent to the routine earnings for a routine work week that a worker would otherwise have been entitled to throughout the written notice duration. An employee earns trip pay on their termination pay. Employers need to likewise continue to make whatever contributions would be needed to keep the benefits the worker would have been entitled to had they continued to be used through the notice duration.

Example: Regular work week

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

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

Sarah’s regular incomes 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 trip pay on her termination pay is determined:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The company needs to likewise guarantee continued protection for any advantage or pension plans that applied 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, however his hours differ from week to week. His rate of pay is $25.00 an hour, and he is paid 6 per cent getaway pay.

Gerry’s company eliminated his position and did not give Gerry any written notice of termination. Gerry was ill and off work for two of the 12 weeks instantly preceding the day his employment was terminated. 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 profits weekly are calculated:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for 2 weeks for that reason these weeks are not consisted of in the computation of average incomes) = $180.00 a week

His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00

Then his vacation pay on his termination pay is calculated:

6% of $720.00 = $43.20

Finally, his holiday pay is contributed 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 benefit or pension strategies that used to him for 4 weeks.

When to pay termination pay

Termination pay should be paid to an employee either 7 days after the employee’s employment is terminated or on the employee’s next routine pay date, whichever is later on.

Mass termination

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

Meaning of “establishment”

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

– they are situated within the same municipality, or

– an employee at one area has contractual seniority rights that reach the other location, enabling the employee 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, but just if the employee works from home and does not operate at any other location where the company carries on service.

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

Note that where a staff member carries out work both from their home and from another location where the company brings on service (for instance, a workplace), their home is not consisted of in the definition of “establishment”. Instead, the worker is thought about to have a connection to the workplace location and, therefore, for the purpose of mass termination, the employee is included with respect to that office location.

Example: where numerous areas are thought about one “facility”

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

For the purpose of mass termination, the business’s London workplace, London storage facility and Sabrina’s London home are thought about one “facility.”

Employer responsibilities in a mass termination

When a mass termination takes place, the company needs to complete and deliver 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.

– personal delivery to the Director’s office on a day and at a time when it is open.

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

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

Any notification to the impacted workers is not considered to have actually been given till the Form 1 is gotten by the Director; to put it simply, notice of mass termination is not efficient until the Director gets the Form 1.

In addition to supplying staff members with specific notices of termination, the employer must, on the first day of the notification period:

– publish a copy of the Form 1 supplied to the Director in the work environment where it will pertain to the attention of the affected .

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

The quantity of notification employees should get in a mass termination is not based upon the workers’ length of employment, but on the number of workers who have actually been ended. An employer should give:

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

– 12 weeks notice if the employment of 200 to 499 workers is to be ended

– 16 weeks see if the work of 500 or more staff members is to be terminated

Exception to the mass termination guidelines

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

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

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

Mass termination: resignation by an employee

An employee who has actually gotten termination notification under the mass termination guidelines who wishes to resign before the termination date provided in the employer’s notice must provide the company a minimum of one week’s written notice of resignation if the employee has been utilized for less than two years. If the work period has actually been two years or more, the staff member must give a minimum of two weeks’ written notice of resignation. However, the staff member does not have to notify of resignation if the employer constructively dismisses the worker or breaches a term of the contract.

Temporary work after termination date in notice

A company can provide work to an employee who has actually been given notification of termination on a temporary basis in the 13-week duration after the termination date set out in the notice without affecting the initial date of the termination and without being needed to offer any additional notice of termination to the employee when the short-lived work ends.

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

Recall rights

A “recall right” is the right of a worker on a layoff to be called back to work by their employer under a term or condition of employment. This right is frequently 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 select 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

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

If an employee is entitled to both termination pay and discontinuance wage, they need to make the same choice for job both.

If a worker who is not represented by a trade union chooses to keep their recall rights or fails to make an option, the company must send the amount of the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.

If a staff member who is represented by a trade union chooses to keep their recall rights or job stops working to decide, the company 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 employee. If they can not pertain to an arrangement, and the trade union recommends the employer and the Director of Employment Standards in composing that efforts have actually failed, the company needs to send the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.

If an employee selects to give up their recall rights or if the recall rights expire, the cash that is kept in trust must be sent to the worker.

If the staff member accepts a recall back to work, the money that is held in trust will be returned to the company.

Exemptions to notice of termination or termination pay

Much of these exemptions are intricate. Please call the Employment Standards Information Centre, 1-800-531-5551, if you require 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 a worker who:

– is guilty of wilful misconduct, disobedience or wilful overlook of task that is not minor and has actually not been excused by the employer. Note: “wilful” includes when a staff member meant the resulting consequence or acted recklessly if they understood or ought to have understood the impacts their conduct would have. Poor work conduct that is unintentional or unintended is usually not thought about wilful;

– was hired for a particular length of time or until the completion of a specific task. However, such an employee will be entitled to observe of termination or termination pay if:- the work ends before the term ends or the job is finished; or

– the term expires or job the task is not finished more than 12 months after the work started; or

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

See also: Employment Standards Self-Service Tool

Wrongful dismissal

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

The guidelines under the ESA about termination and severance of work are minimum requirements. Some employees might have rights under the typical law that are greater than the rights to see of termination (or termination pay) and severance pay under the ESA. A worker might desire to sue their former company in court for “wrongful termination”. Employees should know that they can not sue a company for wrongful dismissal and submit a claim for termination pay or severance pay with the ministry for the exact same termination or severance of work. An employee should pick one or the other. Employees may want to obtain legal recommendations worrying their rights.