Termination Of Employment

A number of expressions are commonly utilized to describe situations when employment is ended. These consist of «let go,» «released,» «dismissed,» «fired» and «completely laid off.»

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

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

– «constructively» dismisses an employee and the staff member resigns, in reaction, within an affordable time;

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

Most of the times, when an employer ends the work of an employee who has been constantly employed for three months, the employer must supply the employee with either composed notice of termination, termination pay or a mix (as long as the notice and job the variety of weeks of termination pay together equivalent the length of notice the staff member is entitled to receive).

The ESA does not need a company to offer a worker a factor why their work is being ended. There are, however, some scenarios where a company can not end a staff member’s work even if the employer is prepared to offer appropriate written notification or termination pay. For example, a company can not end someone’s employment, or penalize them in any other way, if any part of the factor for the termination of work is based upon the staff member asking concerns about the ESA or exercising a right under the ESA, such as declining to work in excess of the daily or weekly hours of work optimums, or taking a leave of lack defined in the ESA. Please see the chapter on reprisals.

Receiving termination notification or pay in lieu

Certain workers are not entitled to notice of termination or termination pay under the ESA. Examples consist of: workers who are guilty of wilful misconduct, disobedience, or wilful neglect of responsibility that is not minor and has actually not been condoned by the company. Other examples include building staff members, employees on short-lived layoff, employees who decline a deal of affordable alternative employment and staff members who have been utilized less than three months.

There are a number of other exemptions to the termination of employment provisions of the ESA. See «Exemptions to see of termination or termination pay.» Please also describe the special guideline tool.

The termination-of-employment rules are completely separate from any entitlements an employee may need to be paid discontinuance wage under the ESA.

Constructive termination

A constructive dismissal might happen when a company makes a considerable change to a fundamental term or condition of a staff member’s work without the staff member’s real or implied consent.

For instance, an employee may be constructively dismissed if the company makes changes to the worker’s conditions of employment that lead to a considerable reduction in income or a substantial unfavorable modification in such things as the worker’s work area, hours of work, authority, or position. Constructive dismissal may also include situations where a company bothers or abuses a worker, or a company provides an employee an ultimatum to «give up or be fired» and the worker resigns in reaction.

The employee would need to resign in reaction to the change within a sensible time period in order for the company’s actions to be thought about a termination of employment for purposes of the ESA.

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

Temporary layoff

An employee is on temporary layoff when an employer cuts down or stops the worker’s work without ending their work (for instance, laying someone off sometimes when there is insufficient work to do). The simple reality that the company does not specify a recall date when laying the worker off does not always mean that the lay-off is not short-term. Note, nevertheless, that a lay-off, even if planned to be temporary, may lead to constructive termination if it is not permitted by the employment contract.

For the purposes of the termination provisions of the ESA, a «week of layoff» is a week in which the worker made less than half of what they would generally make (or earns on average) in a week.

A week of layoff does not include any week in which the worker did not work for one or more days because the staff member was not able or available to work, was subject to disciplinary suspension, or was not offered with work due to the fact that of a strike or lockout at their location of employment or elsewhere.

Employers are not needed under the ESA to supply staff members with a composed notification of a temporary layoff, nor do they need to offer a reason for the lay-off. (They may, nevertheless, be required to do these things under a cumulative contract or an employment agreement.)

Under the ESA, a «short-term layoff» can last:

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

2. more than 13 weeks in any period of 20 successive weeks, but less than 35 weeks of layoff in any period of 52 successive weeks, where:- the staff member continues to get significant payments from the employer;
or

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

– the staff member receives supplemental unemployment advantages;
or

– the employee would be entitled to receive supplementary welfare however isn’t receiving them since they are used in other places;
or

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

– the company remembers the worker within the time frame set out in an arrangement with a staff member who is not represented by a trade union;
or

3. a layoff longer than a layoff explained in ‘B’ where the employer remembers an employee who is represented by a trade union within the time set out in an agreement in between the union and the company.

If an employee 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 notice of termination and termination pay

Under the ESA, an employer can terminate the employment of an employee who has been utilized continually for three months or more if either:

– the employer has actually given the staff member correct composed notification of termination and the notice period has expired

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

Written notice of termination

A staff member is entitled to notice of termination (or termination pay instead of notification) if they have been continuously employed for a minimum of 3 months. A person is considered «utilized» not just while they are actively working, but likewise during any time in which they are not working but the work relationship still exists (for example, time in which the staff member is off sick or on leave or on lay-off).

The quantity of notice to which a worker is entitled depends on their «period of work». A staff member’s period of employment consists of not just perpetuity while the staff member is actively working but also at any time that they are not working but the work relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a short-term lay-off, the employee’s work is considered (or considered) to have actually been ended on the very first day of the lay-off-any time after that does not count as part of the worker’s duration of employment, even though the employee might still be employed for purposes of the «continually used for three months» certification

– if 2 different durations of work are separated by more than 13 weeks, only the most current duration counts for functions of notice of termination

It is possible, in some situations, for a person to have actually been «continuously used» for three months or more and yet have a duration of employment of less than 3 months. In such scenarios, the staff member would be entitled to see due to the fact that a staff member who has actually been constantly utilized for at least 3 months is entitled to see, and the minimum notice 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 amount of notice required:

Note: Special rules determine the amount of notification needed in the case of mass terminations – where the work of 50 or more workers is terminated at a company’s establishment within a four-week duration.

Requirements throughout the statutory notice duration

During the statutory notice period, an employer needs to:

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

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

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

Regular rate

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

Regular wages

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

Regular work week

For a worker who usually works the same variety of hours each week, a regular work week is a week of that lots of hours, not including overtime hours.

Some workers do not have a regular work week. That is, they do not work the exact same number of hours weekly or they are paid on a basis aside from time. For these staff members, the «regular earnings» for a «routine work week» is the average amount of the routine salaries made by the staff member in the weeks in which the worker worked throughout the duration of 12 weeks instantly preceding the date the notification was given.

An employer is not allowed to schedule a worker’s vacation time throughout the statutory notification duration unless the employee-after getting composed notice of termination of employment-agrees to take their trip time throughout the notification period.

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

How to offer written notification

Most of the times, written notice of termination of work must be dealt with to the employee. It can be provided personally or by mail, fax or e-mail, as long as shipment can be validated.

There are special guidelines for providing notice of termination if an employee has an agreement of employment or a cumulative agreement that supplies seniority rights that enable an employee who is to be laid off or whose employment is to be terminated to displace (» bump») other employees.

Because case, the company needs to publish a notification in the office (where it will be seen by the employees) setting out the names, seniority and task classification of those workers the employer plans to end and the date of the proposed termination. The publishing of the notification is thought about to be notice of termination, since the date of the posting, to a staff member who is «bumped» by a staff member named in the notification. However, this notice of termination should still fulfill the length requirements set out in the ESA.

There are likewise unique rules relating to how notice is provided when there is a mass termination.

Termination pay

An employee who does not receive the written notice needed under the ESA needs to be provided termination pay in lieu of notice. Termination pay is a lump sum payment equal to the routine incomes for a regular work week that an employee would otherwise have been entitled to during the composed notice period. A staff member makes trip pay on their termination pay. Employers need to also continue to make whatever contributions would be needed to preserve the advantages the worker would have been entitled to had they continued to be employed through the notification duration.

Example: Regular work week

Sarah has worked for 3 and a half years. Now her job has been eliminated and her employment has actually been terminated. Sarah was not given any written notice of termination.

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

Sarah’s routine incomes 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 trip pay on her termination pay is calculated:

4% of $2,400.00 = $96.00

Finally, her getaway pay is contributed 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 advantage or pension plans that applied to her for 3 weeks.

Example: No regular work week

Gerry has operated at an assisted living home for four years. He works each 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 getaway pay.

Gerry’s employer removed his position and did not give Gerry any composed notice of termination. Gerry was ill and off work for 2 of the 12 weeks immediately preceding the day his work was ended. Gerry earned $1,800.00 in the 12 weeks before the day on which his work ended.

Gerry is entitled to four weeks of termination pay.

Gerry’s average profits per week are computed:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for two weeks therefore these weeks are not consisted of in the calculation of typical incomes) = $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 vacation pay is contributed to his termination pay:

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company needs to also guarantee continued coverage for any advantage or pension strategies that applied to him for 4 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 worker’s next routine pay date, whichever is later.

Mass termination

Special guidelines for notice of termination might use in cases of (when an employer is ending 50 or more staff members at its establishment within a four-week duration).

Meaning of «facility»

An «facility» is a location at which the company carries on business. Separate locations can be thought about one establishment if either:

– they are situated within the same municipality, or

– a staff member at one place has contractual seniority rights that encompass the other area, permitting the staff member to displace another worker (also called «bumping rights»).

Effective October 26, job 2023, in cases of mass termination, the term «establishment» consists of a staff member’s home, however only if the staff member works from home and does not operate at any other area where the employer continues organization.

This will require that employees who work specifically from another location be considered for inclusion in the count when figuring out whether 50 or more workers have actually been terminated.

Note that where a staff member carries out work both from their home and job from another place where the employer continues business (for instance, an office), their home is not consisted of in the meaning of «establishment». Instead, the employee is considered to have a connection to the workplace location and, for that reason, for the function of mass termination, the staff member is consisted of with regard to that workplace location.

Example: where several places are considered one «establishment»

ABC Company has a workplace and a storage facility located in London, ON. Sabrina lives in London and works for ABC Company exclusively from another location: she carries out work for the company from home and does not operate at the workplace.

For the function of mass termination, the business’s London office, London warehouse and Sabrina’s London home are thought about one «establishment.»

Employer obligations in a mass termination

When a mass termination takes place, the employer must 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.

– personal delivery 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 validated.

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

Any notice to the affected staff members is not considered to have actually been provided till the Form 1 is received by the Director; in other words, notification of mass termination is not reliable until the Director gets the Form 1.

In addition to providing staff members with specific notices of termination, the company must, on the first day of the notification duration:

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

– provide a copy of the Form 1 to each impacted worker.

The amount of notice workers need to receive in a mass termination is not based on the workers’ length of employment, however on the variety of employees who have actually been ended. A company needs to provide:

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

– 12 weeks see if the work of 200 to 499 employees is to be ended

– 16 weeks discover if the work of 500 or more employees is to be terminated

Exception to the mass termination rules

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

– the variety of staff members whose work is being ended represents not more than 10 percent of the staff members who have been used 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 service at the facility

Mass termination: job resignation by a worker

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

Temporary work after termination date in notice

An employer can provide work to a worker who has been notified of termination on a momentary basis in the 13-week period after the termination date set out in the notification without affecting the original date of the termination and without being required to supply any further notification of termination to the employee when the momentary work ends.

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

Recall rights

A «recall right» is the right of an employee on a layoff to be called back to work by their employer under a term or job condition of employment. This right is frequently found in cumulative contracts.

An employee who has recall rights and who is entitled to termination pay because of a layoff of 35 weeks or more may pick to:

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

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

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

If a staff member who is not represented by a trade union chooses to keep their recall rights or fails 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 worker who is represented by a trade union chooses to keep their recall rights or fails to make a choice, the employer and the trade union should attempt to come to an arrangement to hold the termination pay (and severance pay, if any) in trust for the worker. If they can not concern an arrangement, and the trade union recommends the employer and the Director of Employment Standards in composing that efforts have actually stopped working, the employer needs to 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 give up their recall rights or if the recall rights expire, the cash that is kept in trust needs to be sent out to the employee.

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

Exemptions to discover of termination or termination pay

Much of these exemptions are complex. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you need more info. Please likewise refer to the unique rule tool.

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

– is guilty of wilful misconduct, disobedience or wilful disregard of task that is not trivial and has not been condoned by the company. Note: «wilful» includes when an employee intended the resulting consequence or acted recklessly if they understood or ought to have understood the effects their conduct would have. Poor work conduct that is unintentional or unintentional is typically not thought about wilful;

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

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

– the work continues for 3 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, severance pay

The guidelines under the ESA about termination and severance of work are minimum requirements. Some employees may have rights under the common law that are greater than the rights to discover of termination (or termination pay) and severance pay under the ESA. A worker may wish to sue their former employer in court for «wrongful termination». Employees must know that they can not sue an employer for wrongful dismissal and sue for termination pay or discontinuance wage with the ministry for the exact same termination or severance of work. A worker needs to pick one or the other. Employees might want to obtain legal recommendations worrying their rights.