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Termination Of Employment

A variety of expressions are frequently used 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) a person’s employment is ended if the company:

– dismisses or stops employing a staff member, consisting of where a worker is no longer used due to the personal bankruptcy or insolvency of the company;

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

– lays a staff member off for a duration that is longer than a “short-lived layoff”.

Most of the times, when an employer ends the work of a staff member who has been constantly employed for three months, the company needs to offer the staff member with either written notification of termination, termination pay or a combination (as long as the notice and the variety of weeks of termination pay together equivalent the length of notification the worker is entitled to receive).

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

Qualifying for termination notice or pay in lieu

Certain employees are not entitled to notice of termination or termination pay under the ESA. Examples include: staff members who are guilty of wilful misconduct, disobedience, or wilful overlook of duty that is not unimportant and has actually not been condoned by the company. Other examples consist of building employees, staff members on short-lived layoff, staff members who refuse a deal of affordable alternative employment and staff members who have been employed less than 3 months.

There are a number of other exemptions to the termination of work provisions of the ESA. See “Exemptions to notice of termination or termination pay.” Please likewise describe the special rule tool.

The termination-of-employment rules are completely separate from any privileges a staff member may have to be paid severance pay under the ESA.

Constructive termination

A constructive dismissal may happen when a company makes a substantial change to a basic term or condition of an employee’s work without the worker’s real or implied authorization.

For instance, a worker may be constructively dismissed if the employer makes changes to the worker’s terms of work that result in a considerable decrease in income or a considerable unfavorable modification in such things as the staff member’s work area, hours of work, authority, or position. Constructive termination may likewise include situations where an employer pesters or abuses an employee, or an employer offers a worker a final notice to “stop or be fired” and the employee resigns in reaction.

The staff member would have to resign in response to the change within an affordable time period in order for the employer’s actions to be thought about a termination of employment for purposes of the ESA.

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

Temporary layoff

A staff member is on momentary layoff when an employer cuts back or stops the worker’s work without ending their employment (for instance, laying someone off at times when there is inadequate work to do). The mere reality that the employer does not specify a recall date when laying the employee off does not always suggest that the lay-off is not short-lived. Note, however, that a lay-off, even if planned to be temporary, might lead to constructive termination if it is not allowed by the employment agreement.

For the functions of the termination provisions 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 typically) in a week.

A week of layoff does not consist of any week in which the employee did not work for one or more days because the employee was not able or readily available to work, underwent 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 required under the ESA to provide staff members with a composed notice of a short-term layoff, nor do they need to supply a factor for the lay-off. (They may, nevertheless, be needed to do these things under a collective agreement or an employment agreement.)

Under the ESA, a “short-term layoff” can last:

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

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

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

– the employee gets extra welfare;
or

– the employee would be entitled to get supplemental welfare however isn’t receiving them since they are employed in other places;
or

– the company remembers the worker 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 company remembers an employee who is represented by a trade union within the time set out in a contract between the union and the company.

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

Written notice of termination and termination pay

Under the ESA, a company can terminate the work of a staff member who has been employed continuously for employment three months or more if either:

– the company has actually provided the worker proper written notification of termination and the notification duration has actually ended

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

Written notification of termination

A staff member is entitled to see of termination (or termination pay instead of notice) if they have actually been continuously utilized for a minimum of 3 months. A person is thought about “utilized” not only while they are actively working, however likewise throughout at any time in which they are not working but the employment relationship still exists (for example, time in which the staff member is off ill or on leave or on lay-off).

The quantity of notification to which a worker is entitled depends on their “duration of work”. A worker’s duration of employment consists of not just perpetuity while the staff member is actively working but likewise whenever 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 staff member’s work is considered (or considered) to have actually been terminated on the very first day of the lay-off-any time after that does not count as part of the worker’s period of employment, even though the worker may still be utilized for purposes of the “continuously used for three months” qualification

– if 2 different periods of employment are separated by more than 13 weeks, just the most current period counts for purposes of notice of termination

It is possible, in some scenarios, for a person to have been “continually used” for three months or more and yet have a period of work of less than three months. In such situations, the employee would be entitled to observe since an employee who has been continuously utilized for at least three months is entitled to see, and the minimum notice privilege of one week applies to an employee with a period of employment of any length less than one year.

The following chart specifies the amount of notification required:

Note: Special rules determine the quantity of notification required when it comes to mass terminations – where the employment 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 employment modify any other term or condition of employment;

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

– pay the employee the salaries they are entitled to, which can not be less than the worker’s regular earnings 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 incomes

These are earnings besides overtime pay, getaway pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and severance pay and specific contractual entitlements.

Regular work week

For a staff member who generally works the same variety of hours weekly, a regular work week is a week of that many hours, not including overtime hours.

Some employees do not have a regular work week. That is, they do not work the very same number of hours every week or they are paid on a basis besides time. For these staff members, the “routine salaries” for a “routine work week” is the average amount of the regular incomes made by the staff member in the weeks in which the staff member worked throughout the duration of 12 weeks instantly preceding the date the notice was provided.

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

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

How to offer written notification

In many cases, written notification of termination of work need to be addressed to the employee. It can be provided personally or by mail, fax or email, as long as delivery can be confirmed.

There are special guidelines for employment providing notification of termination if an employee has a contract of work or a collective agreement that offers seniority rights that allow a worker who is to be laid off or whose work is to be terminated to displace (” bump”) other workers.

In that case, the company must post a notification in the office (where it will be seen by the workers) setting out the names, seniority and task classification of those staff members the company means to terminate and the date of the proposed termination. The publishing of the notification is considered to be notification of termination, as of the date of the posting, to an employee who is “bumped” by an employee named in the notification. However, this notice of termination should still fulfill the length requirements set out in the ESA.

There are also special guidelines concerning how notice is provided when there is a mass termination.

Termination pay

A staff member who does not receive the composed notification needed under the ESA needs to be provided termination pay in lieu of notice. Termination pay is a swelling amount payment equivalent to the routine incomes for a regular work week that a worker would otherwise have been entitled to throughout the composed notification duration. A worker makes holiday pay on their termination pay. Employers need to likewise continue to make whatever contributions would be required to preserve 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 actually worked for employment 3 and a half years. Now her job has been gotten rid of and her work has actually been terminated. Sarah was not offered any written notice of termination.

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

Sarah’s routine incomes for a routine 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 employer needs to also guarantee continued coverage for any benefit or pension strategies that applied to her for three weeks.

Example: No routine work week

Gerry has actually operated at a nursing home for 4 years. He works each week, but his hours vary from week to week. His rate of pay is $25.00 an hour, and he is paid 6 percent getaway pay.

Gerry’s employer removed his position and did not offer Gerry any composed notification of termination. Gerry was ill and off work for two of the 12 weeks instantly preceding the day his employment was ended. Gerry made $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 incomes per week are determined:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for 2 weeks therefore these weeks are not included in the estimation of average revenues) = $180.00 a week

His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00

Then his trip pay on his termination pay is determined:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company must likewise ensure ongoing protection for any advantage or pension 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 staff member’s employment is terminated or on the employee’s next routine pay date, whichever is later on.

Mass termination

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

Meaning of “establishment”

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

– they lie within the exact same municipality, or

– a worker at one place has contractual seniority rights that encompass the other location, permitting the employee to displace another staff member (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 staff member works from home and does not operate at any other location where the employer brings on service.

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

Note that where a staff member performs work both from their home and from another location where the company carries on service (for example, an office), their home is not included in the definition of “establishment”. Instead, the employee is considered to have a connection to the office area and, for that reason, for the purpose of mass termination, the staff member is included with regard to that office location.

Example: where numerous places are considered one “facility”

ABC Company has an office and a storage facility situated in London, ON. Sabrina resides in London and works for ABC Company solely remotely: 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 storage facility 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 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 office on a day and at a time when it is open.

– mail delivery to the Director’s workplace, if the delivery can be verified.

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

Any notification to the affected staff members is ruled out to have actually been provided up until the Form 1 is gotten by the Director; in other words, notice of mass termination is ineffective till the Director gets the Form 1.

In addition to supplying workers with specific notices of termination, the employer must, on the first day of the notice period:

– post a copy of the Form 1 supplied to the Director in the workplace where it will pertain to the attention of the affected employees.

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

The quantity of notification employees should receive in a mass termination is not based on the employees’ length of employment, but on the number of employees who have actually been terminated. An employer must provide:

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

– 12 weeks see if the employment of 200 to 499 staff members is to be ended

– 16 weeks observe if the work of 500 or more employees is to be ended

Exception to the mass termination guidelines

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

– the variety of workers whose employment is being ended represents not more than 10 per cent of the employees who have actually been utilized for a minimum of 3 months at the establishment

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

Mass termination: resignation by a staff member

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

Temporary work after termination date in notification

A company can supply work to an employee who has been notified of termination on a short-term basis in the 13-week period after the termination date set out in the notice without affecting the original date of the termination and without being needed to provide any additional notification of termination to the staff member when the short-term work ends.

If a staff member works beyond the 13-week period after the termination date and then has their work terminated, the employee will be entitled to a new written notification of termination as if the previous notification had never been offered. The staff member’s duration of work will then also include the period 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 company under a term or condition of work. This right is frequently discovered in collective contracts.

A staff member who has recall rights and who is entitled to termination pay since of a layoff of 35 weeks or more may choose to:

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

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

If an employee is entitled to both termination pay and discontinuance wage, they must make the exact same option for both.

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

If a worker who is represented by a trade union elects to keep their recall rights or fails to choose, the and the trade union must try to come to an arrangement to hold the termination pay (and severance pay, if any) in trust for the employee. If they can not come to an arrangement, and the trade union encourages the company and the Director of Employment Standards in writing that efforts have actually failed, the company needs to send the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the money in trust.

If an employee picks to give up their recall rights or if the recall rights expire, the cash 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 held in trust will be returned to the company.

Exemptions to observe of termination or termination pay

A lot of these exemptions are intricate. Please call the Employment Standards Information Centre, 1-800-531-5551, if you require more information. Please likewise describe the unique guideline tool.

The notice of termination and termination pay requirements of the ESA do not apply to a worker who:

– is guilty of wilful misconduct, disobedience or wilful disregard of responsibility that is not trivial and has actually not been excused by the company. Note: “wilful” includes when an employee planned the resulting effect or acted recklessly if they knew or ought to have understood the results their conduct would have. Poor work conduct that is unintentional or unintentional is generally not considered wilful;

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

– the term ends or the job is not completed more than 12 months after the employment began; or

– the work continues for three months or more after the term expires or the task is finished;

See likewise: Employment Standards Self-Service Tool

Wrongful dismissal

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

The guidelines under the ESA about termination and severance of work are minimum requirements. Some staff members may have rights under the common law that are higher than the rights to observe of termination (or termination pay) and discontinuance wage under the ESA. A staff member might wish to sue their former company in court for “wrongful termination”. Employees ought to know that they can not take legal action against a company for wrongful termination and file a claim for termination pay or discontinuance wage with the ministry for the same termination or severance of work. A worker should choose one or the other. Employees might want to acquire legal advice worrying their rights.