Termination Of Employment

A variety of expressions are frequently utilized to describe circumstances when work is terminated. These include “let go,” “released,” “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 using an employee, consisting of where a worker is no longer used due to the personal bankruptcy or insolvency of the employer;

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

– lays a worker off for a period that is longer than a “short-lived layoff”.

Most of the times, when a company ends the employment of a worker who has been constantly employed for 3 months, the employer must supply the employee with either written notice of termination, termination pay or a mix (as long as the notice and the variety of weeks of termination pay together equal the length of notification the worker is entitled to get).

The ESA does not require a company to give an employee a reason why their employment is being terminated. There are, nevertheless, some circumstances where an employer can not end an employee’s work even if the company is prepared to offer correct written notification or job termination pay. For instance, an employer can not end somebody’s employment, or penalize them in any other way, if any part of the factor for the termination of work is based on the staff member asking questions about the ESA or exercising a right under the ESA, such as declining to work in excess of the day-to-day or weekly hours of work optimums, or taking a leave of absence specified in the ESA. Please see the chapter on reprisals.

Receiving termination notice or pay in lieu

Certain employees are not entitled to see of termination or termination pay under the ESA. Examples consist of: workers who are guilty of wilful misbehavior, disobedience, or wilful neglect of duty that is not minor and has actually not been excused by the company. Other examples consist of building and construction staff members, workers on short-term layoff, workers who decline a deal of reasonable alternative work and workers who have actually been employed less than 3 months.

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

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

Constructive termination

A constructive dismissal might occur when an employer makes a considerable change to a basic term or condition of a worker’s employment without the worker’s real or implied approval.

For example, a worker may be constructively dismissed if the employer makes modifications to the employee’s conditions of employment that result in a significant decrease in wage or a significant negative modification in such things as the staff member’s work area, hours of work, authority, or position. Constructive termination may likewise consist of situations where an employer harasses or abuses a staff member, or a company offers a staff member an ultimatum to “quit or be fired” and the worker resigns in action.

The staff member would have to resign in response to the modification within a reasonable amount of time in order for the company’s actions to be considered a termination of employment for functions of the ESA.

Constructive dismissal is a complex and challenging topic. For more details on positive termination, please call the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A worker is on short-lived layoff when a company cuts down or stops the employee’s work without ending their employment (for example, laying somebody off sometimes when there is not sufficient work to do). The simple fact that the employer does not specify a recall date when laying the worker off does not necessarily indicate that the lay-off is not momentary. Note, however, that a lay-off, even if planned to be short-term, may lead to positive termination if it is not enabled 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 generally earn (or earns usually) in a week.

A week of layoff does not include any week in which the employee did not work for several days because the employee was unable or readily available to work, underwent disciplinary suspension, or was not supplied with work because of a strike or lockout at their place of work or elsewhere.

Employers are not required under the ESA to offer employees with a written notice of a momentary layoff, nor do they need to provide a reason for the lay-off. (They may, however, be needed to do these things under a cumulative contract 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 duration of 20 consecutive weeks, however less than 35 weeks of layoff in any period of 52 consecutive weeks, where:- the worker continues to get substantial payments from the company;
or

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

– the worker gets additional joblessness advantages;
or

– the employee would be entitled to receive supplementary welfare however isn’t getting them due to the fact that they are used elsewhere;
or

– the company recalls the staff member to work within the time frame authorized by the Director of Employment Standards;
or

– the employer recalls the worker 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 described in ‘B’ where the employer remembers a worker who is represented by a trade union within the time set out in a contract between the union and the company.

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

Written notification of termination and termination pay

Under the ESA, a company can terminate the employment of a worker who has been employed continually for three months or more if either:

– the company has actually offered the employee appropriate composed notification of termination and the notice duration has ended

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

Written notice of termination

An employee is entitled to see of termination (or termination pay rather of notice) if they have been continually used for at least three months. A person is thought about “utilized” not just while they are actively working, however likewise during at any time in which they are not working however the work relationship still exists (for example, time in which the employee is off sick or on leave or on lay-off).

The amount of notification to which a worker is entitled depends upon their “duration of employment”. An employee’s duration of employment includes not only all time while the worker is actively working however likewise 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 temporary lay-off, the employee’s employment is deemed (or thought about) to have been ended on the first day of the lay-off-any time after that does not count as part of the staff member’s period of work, despite the fact that the staff member may still be used for functions of the “continually utilized for three months” qualification

– if two different durations 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 situations, for an individual to have actually been “constantly employed” for 3 months or more and yet have a duration of work of less than three months. In such circumstances, the staff member would be entitled to observe due to the fact that a staff member who has actually been constantly used for at least 3 months is entitled to see, and the minimum notice privilege of one week uses 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 rules determine the amount of notification required in the case of mass terminations – where the work of 50 or more workers is ended at an employer’s facility within a four-week duration.

Requirements throughout the statutory notification period

During the statutory notification duration, a company needs to:

– not reduce the staff member’s wage rate or modify any other term or condition of employment;

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

– pay the employee the earnings they are entitled to, which can not be less than the employee’s routine earnings for a regular work week every week.

Regular rate

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

Regular wages

These are earnings besides overtime pay, trip pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and severance pay and particular legal privileges.

Regular work week

For a staff member who typically works the exact same variety of hours every week, a regular work week is a week of that numerous hours, not including overtime hours.

Some employees do not have a routine work week. That is, they do not work the very same variety of hours every week or they are paid on a basis aside from time. For these staff members, the “regular incomes” for a “regular work week” is the typical quantity of the regular wages made by the employee in the weeks in which the worker worked during the period of 12 weeks right away preceding the date the notice was offered.

A company is not permitted to schedule a worker’s getaway time during the statutory notice period unless the employee-after getting written notification of termination of employment-agrees to take their trip time during the notice period.

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

How to offer written notice

In many cases, written notification of termination of work need to be addressed to the worker. It can be supplied face to face or by mail, fax or e-mail, as long as delivery can be validated.

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

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

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

Termination pay

An employee who does not get the composed notification needed under the ESA should be provided termination pay in lieu of notification. Termination pay is a swelling amount payment equivalent to the routine salaries for a routine work week that an employee would otherwise have been entitled to throughout the written notification period. A staff member earns getaway pay on their termination pay. Employers must likewise continue to make whatever contributions would be needed to maintain the benefits the employee would have been entitled to had they continued to be employed through the notice duration.

Example: Regular work week

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

Sarah worked 40 hours a week each week and was paid $20.00 an hour. She also got 4 per cent vacation pay. Because she worked for more than three years but less than 4 years, she is entitled to 3 weeks’ pay in lieu of notification.

Sarah’s routine earnings for a routine work week are computed:

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

Her termination pay is computed:

$ 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 vacation pay is included to her termination pay:

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The employer should also guarantee ongoing protection for any benefit or pension that applied to her for 3 weeks.

Example: No routine work week

Gerry has operated at an assisted living home for 4 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 percent holiday pay.

Gerry’s employer eliminated his position and did not offer Gerry any written notification of termination. Gerry was ill and off work for two of the 12 weeks instantly preceding the day his work was ended. Gerry made $1,800.00 in the 12 weeks before the day on which his work ended.

Gerry is entitled to 4 weeks of termination pay.

Gerry’s typical earnings weekly are determined:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for two weeks therefore these weeks are not 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 trip pay is contributed to his termination pay:

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer must also guarantee continued protection for any advantage or pension that applied 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 staff member’s employment is terminated or on the worker’s next routine pay date, whichever is later.

Mass termination

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

Meaning of “facility”

An “facility” is a location at which the company carries on service. Separate locations can be thought about one establishment if either:

– they are situated within the same municipality, or

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

Effective October 26, 2023, in cases of mass termination, the term “establishment” consists of a staff member’s home, but only if the employee works from home and does not work at any other location where the employer carries on business.

This will need that workers who work specifically remotely be considered for inclusion in the count when identifying whether 50 or more workers have been ended.

Note that where a worker carries out work both from their home and from another place where the company continues organization (for instance, an office), their home is not included in the meaning of “facility”. Instead, the employee is thought about to have a connection to the office area and, therefore, for job the purpose of mass termination, the employee is consisted of with regard to that office location.

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

ABC Company has an office 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 operate at the office.

For the function of mass termination, the company’s London office, London warehouse and job 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 finish and provide 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.

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

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

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

Any notification to the impacted employees is ruled out to have actually been given until the Form 1 is received by the Director; in other words, notice of mass termination is ineffective until the Director receives the Form 1.

In addition to offering staff members with specific notifications of termination, the company must, on the very first day of the notice period:

– publish a copy of the Form 1 offered to the Director in the office where it will pertain to the attention of the affected staff members.

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

The amount of notice workers must receive in a mass termination is not based upon the staff members’ length of employment, but on the variety of workers who have actually been terminated. A company should give:

– 8 weeks see if the employment of 50 to 199 employees is to be ended

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

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

Exception to the mass termination guidelines

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

– the variety of employees whose work is being ended represents not more than 10 per cent of the staff members who have been utilized for at least three months at the facility

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

Mass termination: resignation by a worker

A worker who has received termination notice under the mass termination rules who desires to resign before the termination date offered in the employer’s notification should offer the employer a minimum of one week’s written notice of resignation if the worker has been used for less than two years. If the employment duration has actually been 2 years or more, the staff member should offer a minimum of two weeks’ written notification of resignation. However, the employee does not have to offer notice of resignation if the employer constructively dismisses the staff member or breaches a term of the agreement.

Temporary work after termination date in notification

An employer can provide work to an employee who has been offered notification of termination on a temporary basis in the 13-week period after the termination date set out in the notification without impacting the initial date of the termination and without being required to offer any more notification of termination to the employee when the short-lived 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 notice had never ever been offered. The worker’s period of employment will then likewise include the duration of short-term work.

Recall rights

A “recall right” is the right of a staff member on a layoff to be called back to work by their employer under a term or condition of employment. This right is frequently discovered in cumulative 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 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

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

If a worker is entitled to both termination pay and severance pay, they must make the same option for both.

If a staff member who is not represented by a trade union chooses to keep their recall rights or fails to choose, the employer needs to send out the quantity of the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.

If an employee who is represented by a trade union elects to keep their recall rights or fails to decide, the employer and the trade union should try to come to an arrangement to hold the termination pay (and discontinuance wage, if any) in trust for the employee. If they can not come to a plan, and the trade union advises the company and the Director of Employment Standards in composing that efforts have actually failed, the company should send out the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the money in trust.

If an employee chooses to provide up their recall rights or if the recall rights end, the cash that is held in trust should be sent to the worker.

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

Exemptions to observe of termination or termination pay

Much of these exemptions are intricate. Please call the Employment Standards Information Centre, job 1-800-531-5551, if you require more info. 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 misconduct, disobedience or wilful disregard of duty that is not minor and has actually not been excused by the employer. Note: “wilful” includes when an employee meant the resulting consequence or acted recklessly if they understood or should have known the impacts their conduct would have. Poor work conduct that is unintentional or job unintentional is typically not considered wilful;

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

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

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

See also: job Employment Standards Self-Service Tool

Wrongful termination

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 typical law that are greater than the rights to observe of termination (or termination pay) and severance pay under the ESA. A worker may want to sue their former company in court for “wrongful termination”. Employees need to understand that they can not take legal action against an employer for wrongful dismissal and file a claim for termination pay or severance pay with the ministry for the exact same termination or severance of work. A staff member should choose one or the other. Employees might wish to obtain legal guidance concerning their rights.