Termination Of Employment

A variety of expressions are frequently used to explain circumstances when work is ended. These include “release,” “discharged,” “dismissed,” “fired” and “permanently laid off.”

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

– dismisses or stops using an employee, including where an employee is no longer used due to the personal bankruptcy or employment insolvency of the employer;

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

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

In a lot of cases, when an employer ends the employment of an employee who has been continuously used for 3 months, the company must supply the staff member 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 equivalent the length of notification the staff member is entitled to receive).

The ESA does not require a company to offer a worker a factor why their employment is being ended. There are, nevertheless, some situations where a company can not end a staff member’s work even if the company is prepared to offer correct written notice or termination pay. For instance, an employer can not end somebody’s work, or penalize them in any other way, if any part of the factor for the termination of work is based upon the employee asking concerns about the ESA or working out 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 specified in the ESA. Please see the chapter on reprisals.

Getting approved for termination notification or pay in lieu

Certain staff members are not entitled to notice of termination or termination pay under the ESA. Examples consist of: workers who are guilty of wilful misbehavior, disobedience, or wilful disregard of task that is not minor and has not been condoned by the company. Other examples include building employees, workers on short-lived layoff, staff members who refuse an offer of sensible alternative work and employees who have actually been used less than 3 months.

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

The termination-of-employment guidelines are totally separate from any entitlements an employee may need to be paid severance pay under the ESA.

Constructive dismissal

A positive termination may occur when a company makes a significant modification to an essential term or condition of a worker’s employment without the employee’s real or implied permission.

For example, a staff member may be constructively dismissed if the company makes changes to the employee’s terms and employment conditions of work that lead to a substantial reduction in income or a significant negative modification in such things as the worker’s work location, hours of work, authority, or position. Constructive termination may also include scenarios where a company harasses or abuses a staff member, or a company provides an employee a warning to “give up or be fired” and the worker resigns in action.

The employee would need to resign in reaction to the modification within an affordable time period in order for the company’s actions to be considered a termination of employment for functions of the ESA.

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

Temporary layoff

A worker is on short-lived layoff when an employer cuts down or stops the staff member’s work without ending their employment (for instance, laying someone off sometimes when there is inadequate work to do). The mere fact that the company does not define a recall date when laying the staff member off does not necessarily indicate that the lay-off is not short-lived. Note, nevertheless, that a lay-off, even if intended to be temporary, might result in constructive termination if it is not enabled by the employment agreement.

For the functions of the termination arrangements of the ESA, a “week of layoff” is a week in which the employee made less than half of what they would normally earn (or earns 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 readily available to work, was subject to disciplinary suspension, or was not provided with work due to the fact that of a strike or lockout at their place of employment or in other places.

Employers are not required under the ESA to offer workers with a composed notification of a short-lived layoff, nor do they have to supply a reason for the lay-off. (They may, nevertheless, be required to do these things under a cumulative arrangement or a work contract.)

Under the ESA, a “momentary layoff” can last:

1. not more than 13 weeks of layoff in any duration of 20 successive 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, where:- the employee continues to receive considerable payments from the employer;
or

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

– the worker receives supplemental joblessness benefits;
or

– the staff member would be entitled to get additional joblessness benefits but isn’t getting them because they are utilized elsewhere;
or

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

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

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

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

Written notice of termination and termination pay

Under the ESA, a company can terminate the employment of an employee who has been utilized continuously for 3 months or more if either:

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

– the company pays termination pay to the worker where no composed notification or less notice than is needed is given

Written notice of termination

An employee is entitled to discover of termination (or termination pay rather of notice) if they have been continuously used for a minimum of three months. A person is thought about “used” not only while they are actively working, but also during at any time in which they are not working however the employment relationship still exists (for example, time in which the worker is off sick or on leave or on lay-off).

The amount of notification to which an employee is entitled depends on their “period of employment”. A staff member’s period of work consists of not only all time while the employee is actively working however likewise 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 staff member’s work is deemed (or considered) to have been terminated on the first day of the lay-off-any time after that does not count as part of the staff member’s period of employment, despite the fact that the worker might still be employed for functions of the “constantly used for three months” qualification

– if 2 separate periods of work are separated by more than 13 weeks, just the most recent period counts for functions of notice of termination

It is possible, in some circumstances, for a person to have actually been “constantly used” for three months or more and yet have a duration of work of less than three months. In such circumstances, the worker would be entitled to see since a worker who has been continuously utilized for a minimum of 3 months is entitled to observe, and the minimum notice privilege of one week applies to a staff member with a period of work of any length less than one year.

The following chart specifies the amount of notification required:

Note: Special guidelines identify the amount of notice 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 period.

Requirements throughout the statutory notification period

During the statutory notification period, a company needs to:

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

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

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

Regular rate

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

Regular salaries

These are incomes besides overtime pay, trip pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and severance pay and specific legal privileges.

Regular work week

For a staff member who usually works the very same number of hours weekly, a routine work week is a week of that many hours, not consisting of overtime hours.

Some employees do not have a regular work week. That is, they do not work the same number of hours weekly or they are paid on a basis aside from time. For these workers, the “routine wages” for a “regular work week” is the average amount of the regular earnings earned by the worker in the weeks in which the worker worked throughout the period of 12 weeks immediately preceding the date the notification was provided.

An employer is not permitted to schedule an employee’s holiday time during the statutory notification duration unless the employee-after receiving composed notification of termination of employment-agrees to take their holiday time throughout the notification period.

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

How to supply written notification

For the most part, employment written notice of termination of work need to be addressed to the employee. It can be offered face to face or by mail, fax or email, as long as delivery can be validated.

There are special rules for offering notice of termination if a staff member has an agreement of employment or a cumulative contract that provides seniority rights that enable a staff member who is to be laid off or whose work is to be terminated to displace (” bump”) other staff members.

Because case, the employer needs to post a notification in the workplace (where it will be seen by the staff members) setting out the names, employment seniority and task category of those workers the company means to terminate and the date of the proposed termination. The publishing of the notice is considered to be notice of termination, as of the date of the posting, to a staff member who is “bumped” by an employee 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 notice is supplied when there is a mass termination.

Termination pay

A staff member who does not get the composed notification required under the ESA needs to be offered termination pay in lieu of notice. Termination pay is a swelling amount payment equal to the routine salaries for a regular work week that a staff member would otherwise have been entitled to during the composed notification duration. A worker earns trip pay on their termination pay. Employers need to likewise continue to make whatever contributions would be needed to maintain the advantages the employee would have been entitled to had they continued to be used through the notice period.

Example: Regular work week

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

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

Sarah’s regular 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 determined:

$ 800.00 X 3 weeks = $2,400.00

Then her getaway pay on her termination pay is computed:

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 also ensure continued coverage for any advantage or pension strategies that applied to her for three weeks.

Example: No regular work week

Gerry has worked at an assisted living home for four years. He works weekly, 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 company eliminated his position and did not give Gerry any written notice of termination. Gerry was ill and off work for 2 of the 12 weeks instantly preceding the day his work was terminated. Gerry earned $1,800.00 in the 12 weeks before the day on which his employment ended.

Gerry is entitled to 4 weeks of termination pay.

Gerry’s typical revenues weekly are calculated:

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

His termination pay is computed:

$ 180.00 × 4 weeks = $720.00

Then his vacation pay on his termination pay is computed:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer must also ensure 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 a worker either 7 days after the worker’s employment is terminated or on the staff member’s next routine pay date, whichever is later.

Mass termination

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

Meaning of “establishment”

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

– they are located within the same town, or

– an employee at one location has legal seniority rights that extend to the other location, enabling the staff member to displace another employee (also called “bumping rights”).

Effective October 26, 2023, in cases of mass termination, the term “facility” consists of a worker’s home, but just if the employee works from home and does not operate at any other place where the employer carries on organization.

This will need that workers who work exclusively from another location be considered for inclusion in the count when figuring out 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 area where the company brings on business (for example, an office), their home is not consisted of in the definition of “facility”. Instead, the employee is considered to have a connection to the office location and, therefore, for the purpose of mass termination, the worker is included with respect to that workplace location.

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

ABC Company has a workplace and a warehouse located in London, ON. Sabrina resides in London and works for ABC Company solely from another location: she performs work for the company from home and does not operate at the workplace.

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 takes place, the company must complete and deliver the Form 1 (Notice of termination of work) 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 delivery to the Director’s workplace, if the delivery can be validated.

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

Any notice to the affected workers is not thought about to have been offered till the Form 1 is gotten by the Director; in other words, notification of mass termination is not effective up until the Director gets the Form 1.

In addition to offering employees with private notifications of termination, the employer must, on the very first day of the notification period:

– post a copy of the Form 1 provided to the Director in the office where it will pertain to the attention of the impacted workers.

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

The quantity of notice workers should receive in a mass termination is not based on the employees’ length of work, however on the variety of staff members who have been ended. A company must provide:

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

– 12 weeks notice if the work of 200 to 499 staff members is to be ended

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

Exception to the mass termination guidelines

The mass termination rules do not use if these 2 things apply:

– the number of employees whose employment is being terminated represents not more than 10 percent of the employees who have actually been utilized for a minimum of 3 months at the establishment

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

Mass termination: resignation by a worker

A staff member who has gotten termination notification under the mass termination rules who desires to resign before the termination date supplied in the company’s notice need to provide the company at least one week’s composed notification of resignation if the employee has been used for less than two years. If the work period has been two years or more, the staff member must offer at least 2 weeks’ composed notification of resignation. However, the worker does not have to offer notice of resignation if the company constructively dismisses the worker or breaches a regard to the agreement.

Temporary work after termination date in notice

A company can offer work to a worker who has actually been provided notification of termination on a short-lived basis in the 13-week duration after the termination date set out in the notice without impacting the initial date of the termination and without being required to provide any additional notification of termination to the worker when the short-term work ends.

If a worker 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 brand-new written notice of termination as if the previous notice had actually never ever been offered. The worker’s duration of work will then likewise include the duration of short-lived work.

Recall rights

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

A staff member who has recall rights and employment who is entitled to since of a layoff of 35 weeks or more might 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 an employee is entitled to both termination pay and discontinuance wage, they should make the very same choice for both.

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

If an employee who is represented by a trade union chooses to keep their recall rights or stops working to decide, the employer and the trade union need to try to come to a plan to hold the termination pay (and severance pay, if any) in trust for the employee. If they can not concern a plan, and the trade union recommends the company and the Director of Employment Standards in composing that efforts have actually failed, the employer should send out the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.

If a staff member chooses to give up their recall rights or if the recall rights expire, the money that is held in trust needs to be sent to the employee.

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

Exemptions to discover of termination or termination pay

A number of these exemptions are intricate. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you require more information. 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 neglect of responsibility that is not trivial and has actually not been condoned by the employer. Note: “wilful” consists of when a staff member intended the resulting effect or acted recklessly if they knew or should have known the effects their conduct would have. Poor work conduct that is accidental or unintended is usually not considered wilful;

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

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

– the work continues for 3 months or more after the term expires or the task is completed;

See likewise: Employment Standards Self-Service Tool

Wrongful dismissal

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

The rules under the ESA about termination and severance of work are minimum requirements. Some workers might have rights under the common law that are greater than the rights to observe of termination (or employment termination pay) and severance pay under the ESA. An employee might want to sue their former company in court for “wrongful termination”. Employees ought to be aware that they can not sue an employer for wrongful dismissal and submit a claim for termination pay or discontinuance wage with the ministry for the same termination or severance of work. An employee should select one or the other. Employees may wish to obtain legal suggestions concerning their rights.