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Termination Of Employment

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

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

– dismisses or stops employing a worker, including where an employee is no longer used due to the insolvency or insolvency of the company;

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

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

For the most part, when a company ends the work of a worker who has been continuously utilized for 3 months, the company needs to provide the worker with either composed notification of termination, termination pay or a mix (as long as the notification and the variety of weeks of termination pay together equal the length of notice the staff member is entitled to get).

The ESA does not require an employer to give an employee a reason their work is being ended. There are, however, some circumstances where a company can not end a worker’s work even if the company is prepared to provide appropriate written notice or termination pay. For example, a company can not end somebody’s work, or penalize them in any other method, if any part of the reason for the termination of employment is based upon the worker asking concerns about the ESA or exercising a right under the ESA, such as refusing to work in excess of the everyday or weekly hours of work optimums, or taking a leave of absence specified in the ESA. Please see the chapter on reprisals.

Qualifying for termination notice or pay in lieu

Certain employees are not entitled to observe of termination or termination pay under the ESA. Examples include: employees who are guilty of wilful misbehavior, disobedience, or wilful overlook of responsibility that is not insignificant and has not been excused by the company. Other examples consist of building and construction employees, workers on momentary layoff, employees who refuse a deal of sensible alternative employment and staff members 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 discover of termination or termination pay.” Please likewise refer to the special guideline tool.

The termination-of-employment rules are entirely different from any privileges a staff member might have to be paid discontinuance wage under the ESA.

Constructive termination

A constructive termination may occur when an employer makes a substantial modification to a fundamental term or condition of a staff member’s work without the employee’s real or implied consent.

For instance, an employee may be constructively dismissed if the employer makes modifications to the worker’s conditions of employment that lead to a substantial reduction in income or a significant negative change in such things as the worker’s work location, hours of work, authority, or position. Constructive dismissal might also include circumstances where a company harasses or abuses a worker, or a company offers a staff member a final notice to “stop or be fired” and the worker resigns in reaction.

The worker would have to resign in response to the change within a reasonable period of time in order for the employer’s actions to be considered a termination of work for functions of the ESA.

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

Temporary layoff

An employee is on momentary layoff when a company cuts down or job stops the staff member’s work without ending their work (for instance, laying someone off sometimes when there is insufficient work to do). The mere reality that the employer does not define a recall date when laying the staff member off does not necessarily suggest that the lay-off is not momentary. Note, however, that a lay-off, even if intended to be short-term, might result in useful dismissal if it is not permitted by the employment contract.

For the functions of the termination arrangements of the ESA, job a “week of layoff” is a week in which the worker earned less than half of what they would ordinarily make (or makes on average) 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 staff member was unable or available to work, went through disciplinary suspension, or was not provided with work due to the fact that of a strike or lockout at their location of employment or in other places.

Employers are not needed under the ESA to offer workers with a composed notice of a momentary layoff, nor do they need to supply a factor 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 “momentary layoff” can last:

1. not more than 13 weeks of layoff in any period of 20 successive 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 staff member continues to receive considerable payments from the company;
or

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

– the staff member receives supplementary joblessness benefits;
or

– the staff member would be entitled to get additional welfare but isn’t receiving them since they are utilized elsewhere;
or

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

– the company 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 explained in ‘B’ where the company remembers an employee who is represented by a trade union within the time set out in an arrangement between the union and the employer.

If a worker is laid off for a duration longer than a temporary layoff as set out above, the company 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, an employer can terminate the employment of a worker who has been used continually for three months or more if either:

– the employer has actually given the staff member correct written notification of termination and the notice duration has ended

– the company pays termination pay to the worker where no composed notice or less notice than is required is offered

Written notification of termination

An employee is entitled to discover of termination (or termination pay instead of notice) if they have been continually employed for a minimum of three months. An individual is thought about “utilized” not just while they are actively working, however also during at any time in which they are not working but the work relationship still exists (for instance, time in which the worker is off sick or on leave or on lay-off).

The quantity of notice to which an employee is entitled depends upon their “duration of work”. An employee’s period of employment consists of not only all time while the staff member is actively working however 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-term lay-off, the worker’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 worker’s duration of work, even though the staff member might still be utilized for purposes of the “constantly used for three months” credentials

– if two different periods of employment are separated by more than 13 weeks, only the most recent period counts for purposes of notice of termination

It is possible, in some situations, for an individual to have been “continually employed” for three months or more and yet have a period of employment of less than 3 months. In such scenarios, the staff member would be entitled to notice because a staff member who has been constantly used for at least 3 months is entitled to discover, and the minimum notice privilege of one week uses to an employee with a duration of work of any length less than one year.

The following chart defines the amount of notice needed:

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

Requirements throughout the statutory notification duration

During the statutory notification duration, a company needs to:

– not lower the staff member’s wage rate or change any other term or condition of work;

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

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

Regular rate

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

Regular incomes

These are wages aside from overtime pay, getaway pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and severance pay and particular contractual privileges.

Regular work week

For an employee who usually works the 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 other than time. For these staff members, the “regular earnings” for a “regular work week” is the typical amount of the regular incomes made by the worker in the weeks in which the worker worked during the duration of 12 weeks right away preceding the date the notification was offered.

An employer is not permitted to set up a staff member’s holiday time throughout the statutory notification duration unless the employee-after getting composed notice of termination of employment-agrees to take their vacation time throughout the notice period.

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

How to supply written notice

In many cases, written notification of termination of employment must be addressed to the employee. It can be offered personally or by mail, fax or email, as long as shipment can be validated.

There are unique rules for supplying notification of termination if an employee has an agreement of work or a collective agreement that supplies seniority rights that allow an employee who is to be laid off or whose employment is to be terminated to displace (” bump”) other workers.

In that case, the company needs to post a notification in the office (where it will be seen by the staff members) setting out the names, seniority and job classification of those workers the employer intends to terminate and the date of the proposed termination. The publishing of the notification is thought about to be notification of termination, as of the date of the publishing, to a worker who is “bumped” by a worker called in the notice. However, this notification of termination must still meet the length requirements set out in the ESA.

There are also special guidelines relating to how notification is provided when there is a mass termination.

Termination pay

An employee who does not receive the composed notice required under the ESA needs to be offered termination pay in lieu of notification. Termination pay is a lump amount payment equal to the routine wages for a routine work week that a worker would otherwise have been entitled to throughout the composed notification duration. A staff member makes holiday pay on their termination pay. Employers should also continue to make whatever contributions would be needed to preserve the benefits the employee would have been entitled to had they continued to be used through the notice duration.

Example: Regular work week

Sarah has actually worked for three and a half years. Now her job has been gotten rid of and her work has been terminated. Sarah was not given any written notice of termination.

Sarah worked 40 hours a week weekly and job was paid $20.00 an hour. She likewise got 4 per cent trip pay. Because she worked for more than three years however less than four years, she is entitled to three weeks’ pay in lieu of notice.

Sarah’s routine incomes for a regular work week are calculated:

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

Her termination pay is calculated:

$ 800.00 X 3 weeks = $2,400.00

Then her getaway pay on her termination pay is calculated:

4% of $2,400.00 = $96.00

Finally, her getaway 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 also make sure continued protection for any benefit or pension that applied to her for 3 weeks.

Example: No routine work week

Gerry has actually worked at an assisted living home for four years. He works each week, however 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 offer Gerry any composed notification of termination. Gerry was ill and off work for 2 of the 12 weeks instantly preceding the day his employment was terminated. Gerry made $1,800.00 in the 12 weeks before the day on which his employment ended.

Gerry is entitled to four weeks of termination pay.

Gerry’s average earnings weekly are calculated:

$ 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 average revenues) = $180.00 a week

His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00

Then his holiday pay on his termination pay is computed:

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 company must likewise make sure ongoing coverage for any advantage or pension strategies that used to him for 4 weeks.

When to pay termination pay

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

Mass termination

Special rules for notification of termination may use in cases of mass termination (when an employer is terminating 50 or more workers at its facility within a four-week period).

Meaning of “facility”

An “establishment” is an area at which the employer continues company. Separate areas can be considered one facility if either:

– they lie within the very same town, or

– a staff member at one location has legal seniority rights that extend to the other location, enabling the employee 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, but just if the staff member works from home and does not operate at any other location where the employer carries on business.

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

Note that where a worker performs work both from their home and from another area where the company continues service (for instance, a workplace), their home is not included in the meaning of “establishment”. Instead, the employee is considered to have a connection to the workplace place and, therefore, for the purpose of mass termination, the employee is consisted of with respect to that office place.

Example: where several locations are considered one “facility”

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

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

Employer commitments in a mass termination

When a mass termination happens, the company needs to finish 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 shipment to the Director’s workplace on a day and at a time when it is open.

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

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

Any notice to the impacted staff members is not considered to have been offered until the Form 1 is received by the Director; in other words, notification of mass termination is ineffective till the Director receives the Form 1.

In addition to offering employees with individual notices of termination, the employer must, on the first day of the notification period:

– publish a copy of the Form 1 offered to the Director in the workplace where it will come to the attention of the affected workers.

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

The amount of notification employees need to get in a mass termination is not based on the staff members’ length of work, however on the variety of employees who have been ended. An employer needs to give:

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

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

– 16 weeks see if the employment of 500 or more staff members is to be ended

Exception to the mass termination rules

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

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

– none of the terminations are triggered by the irreversible discontinuance of all or part of the company’s service at the facility

Mass termination: resignation by an employee

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

Temporary work after termination date in notice

A company can provide work to an employee who has actually been notified of termination on a short-term 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 provide any additional notice of termination to the worker when the temporary work ends.

If a staff member works beyond the 13-week period after the termination date and after that has their employment terminated, the employee will be entitled to a new written notification of termination as if the previous notification had never ever been provided. The employee’s duration of work will then likewise include the period of short-lived work.

Recall rights

A “recall right” is the right of an employee on a layoff to be recalled to work by their company under a term or condition of employment. This right is frequently discovered in cumulative contracts.

An employee who has recall rights and who is entitled to termination pay due to the fact that of a layoff of 35 weeks or more may select 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

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

If an employee is entitled to both termination pay and severance pay, they need to make the very same option for both.

If an employee who is not represented by a trade union elects to keep their recall rights or stops working to decide, the company needs to send out 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 staff member who is represented by a trade union elects to keep their recall rights or fails to choose, the employer and the trade union must attempt to come to an arrangement to hold the termination pay (and severance pay, if any) in trust for the staff member. If they can not concern an arrangement, and the trade union advises the company and the Director of Employment Standards in composing that efforts have stopped working, the employer should 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 to quit their recall rights or if the recall rights expire, the cash that is held in trust should be sent out to the employee.

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

Exemptions to observe of termination or termination pay

A number of these exemptions are complicated. Please contact the Employment Standards Information Centre, 1-800-531-5551, if you need more details. Please also refer to the special rule tool.

The notification of termination and termination pay requirements of the ESA do not use to a staff member who:

– is guilty of wilful misconduct, job disobedience or wilful overlook of task that is not insignificant and has actually not been excused by the company. Note: “wilful” includes when a worker meant the resulting consequence or acted recklessly if they knew or must have understood the effects their conduct would have. Poor work conduct that is unexpected or unintended is usually ruled out wilful;

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

– the term ends or the task is not finished more than 12 months after the work began; or

– the employment continues for three months or more after the term expires or the job is finished;

See likewise: Employment Standards Self-Service Tool

Wrongful dismissal

Rights greater than ESA notification of termination, job termination pay, discontinuance wage

The rules under the ESA about termination and severance of employment 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 staff member may wish to sue their previous company in court for “wrongful termination”. Employees ought to know that they can not take legal action against a company for wrongful termination and sue for termination pay or severance pay with the ministry for the exact same termination or severance of work. A worker must select one or the other. Employees may wish to obtain legal suggestions concerning their rights.