Termination Of Employment

A variety of expressions are commonly utilized to describe circumstances when work is terminated. These consist of “release,” “released,” “dismissed,” “fired” and “permanently laid off.”

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

– dismisses or stops utilizing an employee, consisting of where a worker is no longer utilized due to the insolvency or insolvency of the company;

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

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

In the majority of cases, when an employer ends the employment of an employee who has actually been continuously employed for 3 months, the employer needs to offer the employee with either written notice of termination, termination pay or a combination (as long as the notice and the variety of weeks of termination pay together equal the length of notification the employee is entitled to receive).

The ESA does not need a company to provide a staff member a reason that their employment is being terminated. There are, however, some situations where a company can not terminate a staff member’s work even if the employer is prepared to give appropriate composed notification or termination pay. For instance, a company can not end somebody’s employment, or penalize them in any other way, if any part of the reason for employment the termination of work is based on the employee asking concerns about the ESA or working out a right under the ESA, such as refusing to work in excess of the daily or weekly hours of work maximums, or taking a leave of absence 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: employees who are guilty of wilful misconduct, disobedience, or wilful disregard of responsibility that is not minor and has actually not been excused by the employer. Other examples include building and construction employees, employees on short-lived layoff, workers who refuse a deal of affordable alternative work and employees who have actually been utilized less than 3 months.

There are a variety 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 special guideline tool.

The termination-of-employment rules are completely separate from any entitlements a worker might need to be paid discontinuance wage under the ESA.

Constructive dismissal

A constructive dismissal may happen when a company makes a substantial change to an essential term or condition of a staff member’s employment without the staff member’s real or implied consent.

For example, an employee may be constructively dismissed if the company makes changes to the staff member’s terms and conditions of work that result in a substantial reduction in salary or a significant negative modification in such things as the employee’s work area, hours of work, authority, or position. Constructive termination might also consist of situations where a company bothers or abuses a staff member, or an employer gives an employee a demand to “stop or be fired” and the employee resigns in response.

The worker would need to resign in action to the change within a reasonable amount of time in order for the employer’s actions to be thought about a termination of work for functions of the ESA.

Constructive termination is a complex and difficult topic. For additional information on useful dismissal, please contact the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A staff member is on momentary layoff when a company cuts down or stops the staff member’s work without ending their work (for example, laying someone off sometimes when there is insufficient work to do). The simple fact that the company does not specify a recall date when laying the employee off does not necessarily imply that the lay-off is not momentary. Note, nevertheless, that a lay-off, even if meant to be momentary, might lead to useful dismissal if it is not allowed by the work agreement.

For the purposes of the termination arrangements of the ESA, a “week of layoff” is a week in which the worker earned less than half of what they would normally make (or makes usually) in a week.

A week of layoff does not include any week in which the staff member did not work for several days due to the fact that the staff member was not able or offered to work, went through disciplinary suspension, or was not provided with work because of a strike or lockout at their location of employment or in other places.

Employers are not required under the ESA to offer employees with a composed notification of a short-term layoff, nor do they need to provide a reason for the lay-off. (They may, however, be required to do these things under a cumulative contract or an employment agreement.)

Under the ESA, a “temporary 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 duration of 20 successive weeks, but less than 35 weeks of layoff in any duration of 52 successive weeks, where:- the employee continues to get considerable payments from the employer;
or

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

– the worker gets additional joblessness benefits;
or

– the employee would be entitled to get extra welfare but isn’t receiving them due to the fact that they are utilized in other places;
or

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

– the employer remembers the employee 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 employer remembers a staff member who is represented by a trade union within the time set out in an arrangement in 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 company is thought about to have actually terminated the worker’s employment. Generally, the staff member will then be entitled to termination pay.

Written notification of termination and termination pay

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

– the company has actually given the employee appropriate written notice of termination and the notification period has actually expired

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

Written notification of termination

A staff member is entitled to see of termination (or termination pay rather of notice) if they have actually been constantly employed for a minimum of 3 months. A person is considered “employed” not only while they are actively working, however also during whenever in which they are not working however the work relationship still exists (for instance, time in which the worker is off sick or on leave or on lay-off).

The amount of notification to which a staff member is entitled depends on their “duration of work”. An employee’s period of employment includes not only all time while the staff member is actively working however likewise any time that they are not working however the employment relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a momentary lay-off, the worker’s work is considered (or considered) 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 employment, despite the fact that the staff member may still be employed for purposes of the “constantly employed for three months” credentials

– if two separate durations of work are separated by more than 13 weeks, just the most current period counts for functions of notification of termination

It is possible, in some situations, for an individual to have actually been “constantly used” for 3 months or more and yet have a period of work of less than 3 months. In such circumstances, the staff member would be entitled to notice due to the fact that a worker who has actually been continually used for at least three months is entitled to discover, and the minimum notification entitlement of one week uses to an employee with a period of work of any length less than one year.

The following chart defines the quantity of notice required:

Note: Special guidelines determine the amount of notification required when it comes to mass terminations – where the work of 50 or more staff members is ended at a company’s establishment within a four-week duration.

Requirements throughout the statutory notification duration

During the statutory notification period, an employer must:

– not minimize the worker’s wage rate or alter any other term or condition of work;

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

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

Regular rate

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

Regular wages

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

Regular work week

For a worker who normally works the same variety of hours every week, a regular work week is a week of that numerous hours, not including overtime hours.

Some employees do not have a routine work week. That is, they do not work the same number of hours every week or they are paid on a basis other than time. For these staff members, the “routine earnings” for a “routine work week” is the average amount of the routine earnings made by the employee in the weeks in which the worker worked throughout the period of 12 weeks immediately preceding the date the notice was given.

A company is not allowed to set up a staff member’s holiday time throughout the statutory notification duration unless the employee-after getting written notification of termination of employment-agrees to take their trip time during the notice duration.

If an employer supplies longer notice than is needed, the statutory part of the notice duration is the tail end of the duration that ends on the date of termination.

How to supply written notice

For the most part, written notice of termination of employment need to be dealt with to the worker. It can be provided personally or employment by mail, fax or e-mail, as long as delivery can be confirmed.

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

In that case, the company should publish a notification in the office (where it will be seen by the workers) setting out the names, seniority and task category of those employees the employer intends to terminate and the date of the proposed termination. The posting of the notice is thought about to be notice of termination, since the date of the posting, to a worker who is “bumped” by a staff member named in the notification. However, this notice of termination should still satisfy the length requirements set out in the ESA.

There are also unique rules concerning how notification is offered when there is a mass termination.

Termination pay

A staff member who does not receive the written notification required under the ESA needs to be provided termination pay in lieu of notice. Termination pay is a lump amount payment equal to the regular incomes for a routine work week that a staff member would otherwise have been entitled to during the composed notification duration. An employee earns getaway pay on their termination pay. Employers should also continue to make whatever contributions would be needed to maintain the benefits the worker would have been entitled to had they continued to be utilized through the notification duration.

Example: Regular work week

Sarah has worked for three and a half years. Now her job has been removed and her work has actually been terminated. Sarah was not offered any composed notification of termination.

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

Sarah’s routine wages for a routine work week are determined:

$ 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 vacation 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 needs to likewise coverage for any advantage or pension strategies that used to her for three weeks.

Example: No regular work week

Gerry has worked at a retirement home for 4 years. He works weekly, but his hours differ from week to week. His rate of pay is $25.00 an hour, and he is paid 6 percent vacation pay.

Gerry’s company eliminated his position and did not offer Gerry any written notification of termination. Gerry was ill and off work for 2 of the 12 weeks right away preceding the day his employment was terminated. Gerry made $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 typical earnings per week are determined:

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

His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00

Then his holiday pay on his termination pay is determined:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company needs to likewise ensure continued protection for any advantage or pension that used to him for four weeks.

When to pay termination pay

Termination pay need to be paid to a staff member either 7 days after the worker’s work is terminated or on the staff member’s next regular pay date, whichever is later.

Mass termination

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

Meaning of “establishment”

An “establishment” is an area at which the company continues company. Separate locations can be thought about one facility if either:

– they lie within the exact same town, or

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

Effective October 26, 2023, in cases of mass termination, the term “establishment” includes an employee’s home, however just if the employee works from home and does not work at any other place where the employer brings on service.

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

Note that where a staff member performs work both from their home and from another place where the employer carries on business (for example, a workplace), their home is not consisted of in the definition of “establishment”. Instead, the staff member is thought about to have a connection to the workplace location and, therefore, for the purpose of mass termination, the worker is consisted of with regard to that office place.

Example: where several areas are considered one “facility”

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

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

Employer responsibilities in a mass termination

When a mass termination occurs, the company should complete 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 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 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 employees is not thought about to have been offered up until the Form 1 is gotten by the Director; simply put, notice of mass termination is ineffective up until the Director gets the Form 1.

In addition to supplying workers with specific notices of termination, the company must, on the very first day of the notification period:

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

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

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

– 8 weeks discover if the employment of 50 to 199 employees is to be terminated

– 12 weeks see if the employment of 200 to 499 employees is to be terminated

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

Exception to the mass termination rules

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

– the variety of workers whose employment is being ended represents not more than 10 percent of the staff members who have been utilized for at least three months at the facility

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

Mass termination: resignation by a worker

An employee who has actually gotten termination notification under the mass termination guidelines who wants to resign before the termination date provided in the employer’s notification should give the employer a minimum of one week’s written notice of resignation if the staff member has actually been used for less than two years. If the employment period has actually been 2 years or more, the worker should give a minimum of two weeks’ written notification of resignation. However, the employee does not have to notify of resignation if the employer constructively dismisses the employee or breaches a regard to the agreement.

Temporary work after termination date in notification

A company can supply work to a worker who has been offered notification of termination on a temporary basis in the 13-week period after the termination date set out in the notification without impacting the initial date of the termination and without being required to supply 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 work ended, the worker will be entitled to a brand-new written notification of termination as if the previous notification had never ever been given. The employee’s period of employment will then likewise include the period 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 company under a term or condition of work. This right is frequently discovered in cumulative agreements.

A worker who has recall rights and who is entitled to termination pay due to the fact that of a layoff of 35 weeks or more might 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

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

If a staff member is entitled to both termination pay and severance pay, they need to make the exact same choice for both.

If an employee who is not represented by a trade union elects to keep their recall rights or fails to choose, the company needs to send the amount 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 elects to keep their recall rights or fails to make a choice, the employer and the trade union must try to come to a plan to hold the termination pay (and discontinuance wage, if any) in trust for the worker. If they can not concern a plan, and the trade union encourages the company and the Director of Employment Standards in composing that efforts have actually failed, the employer should send the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the money 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 should be sent to the staff member.

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

Exemptions to see of termination or termination pay

Much of these exemptions are complicated. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you need more details. Please likewise describe the special rule tool.

The notice of termination and termination pay requirements of the ESA do not use to an employee who:

– is guilty of wilful misbehavior, disobedience or wilful neglect of task that is not trivial and has not been excused by the employer. Note: “wilful” consists of when a staff member planned the resulting effect or acted recklessly if they understood or must have understood the results their conduct would have. Poor work conduct that is unintentional or unintentional is usually not considered wilful;

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

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

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

See also: Employment Standards Self-Service Tool

Wrongful termination

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

The guidelines under the ESA about termination and severance of employment are minimum requirements. Some employees may have rights under the typical law that are higher than the rights to observe of termination (or termination pay) and severance pay under the ESA. A staff member might wish to sue their former employer in court for “wrongful dismissal”. Employees need to know that they can not take legal action against an employer for wrongful termination and file a claim for termination pay or discontinuance wage with the ministry for the exact same termination or severance of employment. A worker must pick one or the other. Employees may want to acquire legal suggestions concerning their rights.