Termination Of Employment

A number of expressions are commonly used to describe situations when work is terminated. These consist of “let go,” “discharged,” “dismissed,” “fired” and “permanently laid off.”

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

– dismisses or stops employing a staff member, consisting of where an employee is no longer employed due to the bankruptcy or insolvency of the company;

– “constructively” dismisses a worker and the worker resigns, in response, within a reasonable time;

– lays an employee off for a period that is longer than a “short-lived layoff”.

In the majority of cases, when a company ends the employment of a worker who has been continually employed for 3 months, the company must provide the employee with either composed notice 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 notice the employee is entitled to get).

The ESA does not need a company to provide a worker a reason that their work is being ended. There are, however, some circumstances where an employer can not end a staff member’s employment even if the company is prepared to provide correct composed notice or termination pay. For instance, an employer can not end somebody’s employment, or punish them in any other method, if any part of the factor for the termination of work is based on the employee asking concerns about the ESA or exercising 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.

Qualifying for termination notice or pay in lieu

Certain employees are not entitled to see of termination or termination pay under the ESA. Examples consist of: workers who are guilty of wilful misconduct, disobedience, or wilful overlook of task that is not insignificant and has actually not been excused by the company. Other examples consist of building employees, staff members on short-term layoff, workers who decline a deal of sensible alternative employment 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 unique rule tool.

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

Constructive termination

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

For example, a worker might be constructively dismissed if the employer makes modifications to the staff member’s terms and conditions of work that lead to a substantial decrease in wage or a substantial negative change in such things as the employee’s work place, hours of work, authority, or position. Constructive termination might also consist of situations where an employer pesters or abuses a worker, job or a company provides a staff member a warning to “stop or be fired” and the staff member resigns in response.

The staff member would need to resign in response to the modification within an affordable amount of time in order for the company’s actions to be considered a termination of work for purposes of the ESA.

Constructive termination is a complex and difficult topic. For additional information on useful termination, 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 down or stops the staff member’s work without ending their employment (for example, laying someone off at times when there is not sufficient work to do). The simple truth that the employer does not define a recall date when laying the staff member off does not necessarily imply that the lay-off is not short-term. Note, however, that a lay-off, even if intended to be short-term, may result in positive termination if it is not enabled by the work contract.

For the functions of the termination arrangements of the ESA, a “week of layoff” is a week in which the staff member earned less than half of what they would generally earn (or makes typically) in a week.

A week of layoff does not consist of any week in which the employee did not work for job one or more days due to the fact that the employee was unable or available to work, was subject to disciplinary suspension, or was not provided with work because of a strike or lockout at their place of employment or somewhere else.

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

Under the ESA, a “short-lived 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 period of 52 successive weeks, where:- the worker continues to get substantial payments from the company;
or

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

– the worker receives supplementary joblessness benefits;
or

– the worker would be entitled to receive additional welfare but isn’t getting them because they are utilized elsewhere;
or

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

– the employer recalls the worker within the time frame set out in a contract with a staff member who is not represented by a trade union;
or

3. a layoff longer than a layoff described in ‘B’ where the employer recalls a worker who is represented by a trade union within the time set out in a contract in between the union and the company.

If a staff member is laid off for a duration longer than a short-term layoff as set out above, the company is considered to have actually ended the employee’s work. Generally, the staff member will then be entitled to termination pay.

Written notice of termination and termination pay

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

– the company has actually provided the staff member proper composed notification of termination and the notice period has ended

– the employer pays termination pay to the staff member where no written notification or less notification than is required is given

Written notification of termination

A worker is entitled to see of termination (or termination pay rather of notice) if they have been continually used for a minimum of 3 months. An individual is considered “utilized” not just while they are actively working, however likewise throughout whenever in which they are not working but the employment relationship still exists (for instance, time in which the employee is off sick or on leave or on lay-off).

The amount of notification to which a staff member is entitled depends upon their “duration of work”. A staff member’s duration of work consists of not just all time while the worker is actively working however likewise 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 momentary lay-off, the worker’s employment is deemed (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 work, even though the worker might still be utilized for purposes of the “continuously employed for 3 months” qualification

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

It is possible, in some situations, for a person to have actually been “continually used” for three months or more and yet have a period of work of less than 3 months. In such circumstances, the employee would be entitled to discover since an employee who has actually been constantly utilized for a minimum of three months is entitled to discover, and the minimum notification entitlement of one week applies to an employee with a duration of employment of any length less than one year.

The following chart specifies the amount of notice required:

Note: Special rules determine the quantity of notice required in the case of mass terminations – where the work of 50 or more workers is ended at a company’s establishment within a four-week period.

Requirements during the statutory notification period

During the statutory notice duration, an employer should:

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

– continue to make whatever contributions would be required to preserve the staff member’s benefits strategies; and

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

Regular rate

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

Regular salaries

These are earnings besides overtime pay, trip pay, public holiday pay, premium pay, domestic or job sexual violence leave pay, termination of project pay, termination pay and discontinuance wage and particular contractual privileges.

Regular work week

For an employee who normally works the same variety of hours each week, a routine work week is a week of that lots of hours, not including overtime hours.

Some staff members do not have a regular work week. That is, they do not work the very same variety of hours weekly or they are paid on a basis besides time. For these employees, the “regular incomes” for a “regular work week” is the typical quantity of the regular salaries earned by the worker in the weeks in which the worker worked during the period of 12 weeks immediately preceding the date the notice was offered.

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

If a company offers longer notification than is required, the statutory part of the notification period is the last part of the period that ends on the date of termination.

How to supply written notification

For the most part, written notice of termination of work should be addressed to the employee. It can be offered personally or by mail, fax or email, as long as shipment can be confirmed.

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

In that case, the company must publish a notice in the workplace (where it will be seen by the workers) setting out the names, seniority and job category of those staff members the employer intends to end and the date of the proposed termination. The posting of the notice is thought about to be notification of termination, since the date of the publishing, to a staff member who is “bumped” by a staff member called in the notice. However, this notification of termination should still meet the length requirements set out in the ESA.

There are also unique rules relating to how notice is supplied when there is a mass termination.

Termination pay

An employee who does not receive the composed notice needed under the ESA must be offered termination pay in lieu of notice. Termination pay is a swelling amount payment equivalent to the routine wages for a regular work week that a staff member would otherwise have been entitled to during the written notification duration. A worker makes getaway pay on their termination pay. Employers need to also continue to make whatever contributions would be required to maintain the benefits the staff member would have been entitled to had they continued to be employed through the notification period.

Example: Regular work week

Sarah has worked for 3 and a half years. Now her task has actually been removed and her employment has actually been terminated. Sarah was not given any written notification of termination.

Sarah worked 40 hours a week every week and was paid $20.00 an hour. She likewise received 4 per cent vacation pay. Because she worked for more than 3 years however less than four years, she is entitled to 3 weeks’ pay in lieu of notification.

Sarah’s regular earnings for a routine work week are determined:

$ 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 calculated:

4% of $2,400.00 = $96.00

Finally, her trip 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 likewise guarantee ongoing coverage for any advantage or pension that used to her for 3 weeks.

Example: No routine work week

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

Gerry’s employer removed his position and did not provide Gerry any written notice of termination. Gerry was ill and off work for 2 of the 12 weeks immediately preceding the day his work 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 revenues weekly are calculated:

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

His termination pay is determined:

$ 180.00 × 4 weeks = $720.00

Then his trip pay on his termination pay is determined:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company must also guarantee continued coverage for any benefit or pension strategies that applied to him for four weeks.

When to pay termination pay

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

Mass termination

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

Meaning of “facility”

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

– they lie within the very same municipality, or

– a staff member at one location has contractual seniority rights that reach the other location, permitting 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 an employee’s home, but only if the employee works from home and does not operate at any other location where the company continues business.

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

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

Example: where several places are considered one “establishment”

ABC Company has a workplace and a warehouse located in London, ON. Sabrina resides in London and works for ABC Company solely remotely: she carries out work for the business from home and does not work at the office.

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

Employer obligations in a mass termination

When a mass termination happens, the employer must complete 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 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 shipment can be verified.

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

Any notification to the impacted employees is not considered to have actually been offered up until the Form 1 is received by the Director; to put it simply, notification of mass termination is not efficient up until the Director receives the Form 1.

In addition to offering staff members with private notices of termination, the employer must, on the first day of the notice duration:

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

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

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

– 8 weeks observe if the work of 50 to 199 employees is to be ended

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

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

Exception to the mass termination rules

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

– the variety of staff members whose work is being ended represents not more than 10 per cent of the staff members who have actually been employed for at least three months at the facility

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

Mass termination: resignation by a staff member

A staff member who has gotten termination notice under the mass termination rules who desires to resign before the termination date offered in the employer’s notice should offer the employer at least one week’s written notification of resignation if the employee has been employed for less than two years. If the work duration has been two years or more, the worker should provide a minimum of two weeks’ composed notification of resignation. However, the staff member does not have to provide notice of resignation if the employer constructively dismisses the worker or breaches a regard to the contract.

Temporary work after termination date in notification

A company can supply work to a worker who has been notified of termination on a temporary basis in the 13-week duration after the termination date set out in the notice without impacting the original date of the termination and without being required to supply any additional notice of termination to the staff member when the short-term work ends.

If a worker works beyond the 13-week period after the termination date and after that has their employment ended, the worker will be entitled to a brand-new written notification of termination as if the previous notification had actually never ever been offered. The staff member’s period of employment will then also consist of the duration of temporary work.

Recall rights

A “recall right” is the right of a worker on a layoff to be called back to work by their employer under a term or condition of work. This right is typically found in cumulative contracts.

A worker who has recall rights and who is entitled to termination pay because 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 discontinuance wage) at that time;
or

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

If an employee is entitled to both termination pay and severance pay, they must make the 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 choose, the employer should send out the quantity 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 chooses to keep their recall rights or fails to make an option, the employer 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 concern an arrangement, and the trade union advises the employer and the Director of Employment Standards in composing that efforts have actually stopped working, the employer should send the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If a staff member selects to quit their recall rights or if the recall rights end, the money that is held in trust must be sent out to the staff member.

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

Exemptions to observe of termination or termination pay

Much of these exemptions are intricate. Please call the Employment Standards Information Centre, 1-800-531-5551, if you require more information. Please likewise refer to the special rule tool.

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

– is guilty of wilful misconduct, disobedience or wilful disregard of responsibility that is not unimportant and has not been excused by the company. Note: “wilful” consists of when an employee planned the resulting consequence or acted recklessly if they knew or should have understood the effects their conduct would have. Poor work conduct that is accidental or unintended is typically ruled out wilful;

– was employed for a specific length of time or till the completion of a particular job. However, such a worker 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 expires or the job is not completed more than 12 months after the work started; or

– the employment continues for 3 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 notification of termination, termination pay, discontinuance wage

The rules under the ESA about termination and severance of employment are minimum requirements. Some workers might have rights under the common law that are higher than the rights to notice of termination (or termination pay) and severance pay under the ESA. An employee might wish to sue their previous company in court for “wrongful termination”. Employees ought to know that they can not sue an employer for wrongful termination and file a claim for termination pay or discontinuance wage with the ministry for the very same termination or severance of work. A worker should select one or the other. Employees may wish to acquire legal guidance worrying their rights.