Termination Of Employment

A variety of expressions are typically utilized to describe circumstances when employment is terminated. These include “release,” “discharged,” “dismissed,” “fired” and “completely laid off.”

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

– dismisses or stops employing a staff member, including where an employee is no longer utilized due to the personal bankruptcy or insolvency of the employer;

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

– lays a worker off for a duration that is longer than a “temporary layoff”.

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

The ESA does not need an employer to offer a staff member a reason their employment is being ended. There are, nevertheless, some circumstances where a company can not terminate a worker’s work even if the employer is prepared to provide appropriate composed notice or termination pay. For instance, a company can not end somebody’s employment, or punish them in any other way, if any part of the factor for the termination of employment is based upon the worker asking concerns about the ESA or working out a right under the ESA, such as declining to work in excess of the everyday 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 observe of termination or termination pay under the ESA. Examples include: employees who are guilty of wilful misconduct, disobedience, or employment wilful neglect of task that is not trivial and has not been excused by the employer. Other examples consist of construction staff members, workers on momentary layoff, staff members who decline a deal of affordable alternative employment and staff members who have been utilized less than three months.

There are a variety of other exemptions to the termination of work provisions of the ESA. See “Exemptions to discover of termination or termination pay.” Please likewise refer to the unique rule tool.

The termination-of-employment guidelines are entirely different from any privileges an employee might need to be paid discontinuance wage under the ESA.

Constructive dismissal

A constructive termination might happen when an employer makes a substantial change to a fundamental term or condition of an employee’s work without the employee’s actual or implied approval.

For example, an employee might be constructively dismissed if the employer makes changes to the worker’s terms of employment that result in a considerable decrease in salary or a significant negative modification in such things as the staff member’s work place, hours of work, authority, or position. Constructive dismissal might also consist of situations where an employer harasses or abuses an employee, or a company gives a worker an ultimatum to “quit or be fired” and the employee resigns in reaction.

The employee would need to resign in action to the change within an affordable duration of time in order for the company’s actions to be considered a termination of employment for purposes of the ESA.

Constructive dismissal is a complex and challenging topic. For more details on constructive dismissal, please call the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A worker is on momentary layoff when an employer cuts back or stops the employee’s work without ending their work (for instance, laying someone off sometimes when there is not sufficient work to do). The mere reality that the company does not specify a recall date when laying the employee off does not necessarily imply that the lay-off is not short-term. Note, however, that a lay-off, even if planned to be short-lived, may lead to positive termination if it is not allowed by the work contract.

For the functions of the termination arrangements of the ESA, a “week of layoff” is a week in which the employee earned less than half of what they would generally 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 one or more days since the staff member was not able or offered to work, went through disciplinary suspension, or was not offered with work since of a strike or lockout at their place of work or in other places.

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

Under the ESA, a “momentary 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 consecutive weeks, but less than 35 weeks of layoff in any period of 52 consecutive weeks, where:- the worker continues to receive considerable payments from the employer;
or

– the company continues to make payments for the benefit of the worker under a genuine group or staff member insurance coverage plan (such as a medical or drug insurance plan) or a legitimate retirement or pension;
or

– the worker receives extra unemployment benefits;
or

– the staff member would be entitled to receive supplementary unemployment benefits however isn’t getting them since they are used in other places;
or

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

– the employer recalls the employee 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 described in ‘B’ where the company remembers a worker who is represented by a trade union within the time set out in an agreement between the union and the company.

If a worker is laid off for a period longer than a temporary layoff as set out above, the company is thought about to have actually ended the staff member’s work. 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 actually been utilized continually for three months or more if either:

– the company has provided the worker proper written notice of termination and the notification period has ended

– the company pays termination pay to the worker where no written notification or less notice than is required is offered

Written notice of termination

A staff member is entitled to observe of termination (or termination pay rather of notice) if they have been continuously utilized for at least three months. An individual is considered “used” not only while they are actively working, however likewise throughout any time in which they are not working but the employment relationship still exists (for employment example, time in which the worker is off sick or on leave or on lay-off).

The quantity of notice to which a staff member is entitled depends upon their “duration of work”. An employee’s period of employment includes not only perpetuity while the worker is actively working but also at any time that they are not working but the work relationship still exists, employment with the following exceptions:

– if a lay-off goes on longer than a temporary lay-off, the employee’s employment is deemed (or considered) to have been ended on the very first day of the lay-off-any time after that does not count as part of the worker’s period of work, despite the fact that the staff member may still be employed for purposes of the “constantly utilized for 3 months” credentials

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

It is possible, in some situations, for an individual to have actually been “constantly utilized” for 3 months or more and yet have a duration of work of less than 3 months. In such circumstances, the worker would be entitled to observe because an employee who has been continuously employed for at least 3 months is entitled to notice, and the minimum notification entitlement of one week uses to a worker with a duration of work of any length less than one year.

The following chart defines the amount of notification needed:

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

Requirements during the statutory notification duration

During the statutory notice duration, a company must:

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

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

– pay the staff member the incomes they are entitled to, which can not be less than the staff member’s regular earnings for a regular 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 salaries other than overtime pay, vacation pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and severance pay and particular contractual entitlements.

Regular work week

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

Some employees do not have a routine work week. That is, they do not work the exact same number of hours each week or they are paid on a basis besides time. For these workers, the “regular earnings” for a “routine work week” is the typical amount of the regular earnings made by the worker in the weeks in which the worker worked throughout the duration of 12 weeks instantly preceding the date the notification was provided.

An employer is not enabled to schedule an employee’s trip time during the statutory notice period unless the employee-after getting written notice of termination of employment-agrees to take their vacation time throughout the notice period.

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

How to provide written notice

Most of the times, composed notification of termination of work must be resolved to the staff member. It can be provided face to face or by mail, fax or e-mail, as long as shipment can be validated.

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

Because case, the company needs to post a notice in the workplace (where it will be seen by the staff members) setting out the names, seniority and job category of those staff members the employer intends to terminate and the date of the proposed termination. The posting of the notification is thought about to be notice of termination, as of the date of the posting, to an employee who is “bumped” by a staff member named in the notification. However, this notice of termination need to still satisfy the length requirements set out in the ESA.

There are likewise special guidelines relating to how notice is supplied when there is a mass termination.

Termination pay

An employee who does not get the written notice required under the ESA must be offered termination pay in lieu of notice. Termination pay is a lump sum payment equivalent to the routine wages for a routine work week that an employee would otherwise have been entitled to throughout the written notice duration. A staff member earns holiday pay on their termination pay. Employers should likewise continue to make whatever contributions would be required to keep the benefits the worker would have been entitled to had they continued to be employed through the notification duration.

Example: Regular work week

Sarah has actually worked for three and a half years. Now her job has been removed and her employment has actually been ended. Sarah was not provided any composed notification of termination.

Sarah worked 40 hours a week each week and was paid $20.00 an hour. She also got four percent holiday pay. Because she worked for more than 3 years however less than 4 years, she is entitled to three weeks’ pay in lieu of notification.

Sarah’s routine earnings for a regular 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 computed:

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 company should also make sure ongoing protection for any benefit or pension that applied to her for three weeks.

Example: No routine work week

Gerry has actually worked at a nursing 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 trip pay.

Gerry’s company removed his position and did not provide Gerry any written notification of termination. Gerry was ill and off work for employment 2 of the 12 weeks right away preceding the day his employment was ended. 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 profits weekly are computed:

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

His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00

Then his vacation pay on his termination pay is calculated:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer must likewise guarantee continued coverage for any benefit or pension that applied to him for 4 weeks.

When to pay termination pay

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

Mass termination

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

Meaning of “establishment”

An “facility” is a place at which the company brings on business. Separate places can be thought about one facility if either:

– they lie within the very same town, or

– an employee at one area has contractual seniority rights that extend to the other place, allowing the employee to displace another employee (likewise called “bumping rights”).

Effective October 26, 2023, in cases of mass termination, the term “establishment” consists of an employee’s home, but just if the staff member works from home and does not work at any other area where the employer continues company.

This will require that employees who work specifically remotely be thought about for addition in the count when figuring out whether 50 or more staff members have actually been terminated.

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

Example: where several places are considered one “facility”

ABC Company has a workplace and a storage facility situated in London, ON. Sabrina resides in London and employment works for ABC Company exclusively from another location: she performs work for the business from home and does not operate at the workplace.

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

Employer commitments in a mass termination

When a mass termination happens, the employer should complete and provide the Form 1 (Notice of termination of work) to the Director of Employment Standards (Director) by:

– e-mail to esa_form1_notice@ontario.ca.

– fax to (416) 326-7061.

– individual delivery to the Director’s office on a day and at a time when it is open.

– mail shipment to the Director’s office, 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 offered till the Form 1 is received by the Director; to put it simply, notice of mass termination is not until the Director gets the Form 1.

In addition to offering staff members with private notifications of termination, the company must, on the very first day of the notice period:

– publish a copy of the Form 1 provided to the Director in the workplace where it will concern the attention of the impacted workers.

– offer a copy of the Form 1 to each affected employee.

The quantity of notice employees must get in a mass termination is not based on the workers’ length of work, however on the variety of staff members who have actually been ended. An employer should give:

– 8 weeks see if the employment of 50 to 199 employees is to be ended

– 12 weeks observe if the employment of 200 to 499 employees is to be ended

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

Exception to the mass termination rules

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

– the variety of employees whose work is being terminated represents not more than 10 percent of the workers who have been utilized for at least three months at the establishment

– none of the terminations are brought on by the permanent discontinuance of all or part of the employer’s service at the establishment

Mass termination: resignation by an employee

An employee who has received termination notice under the mass termination rules who wishes to resign before the termination date provided in the company’s notification must offer the employer at least one week’s written notice of resignation if the employee has actually been employed for less than 2 years. If the work period has actually been two years or more, the employee should provide a minimum of 2 weeks’ written notice of resignation. However, the employee does not need to give notice of resignation if the employer constructively dismisses the worker or breaches a regard to the agreement.

Temporary work after termination date in notification

An employer can provide work to an employee who has been given notification 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 further notice of termination to the employee when the temporary work ends.

If an employee works beyond the 13-week period after the termination date and then has their employment ended, the employee will be entitled to a new written notice of termination as if the previous notification had never ever been given. The employee’s duration of employment will then also consist of the duration of short-lived 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 employment. This right is commonly found in cumulative contracts.

A worker who has recall rights and who is entitled to termination pay since of a layoff of 35 weeks or more may select 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 severance pay).

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

If a staff member who is not represented by a trade union chooses to keep their recall rights or fails to decide, the company should send out the quantity of the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

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

If an employee chooses to offer up their recall rights or if the recall rights expire, the cash that is held in trust must be sent out to the worker.

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

Exemptions to notice of termination or termination pay

Much of these exemptions are intricate. Please contact the Employment Standards Information Centre, 1-800-531-5551, if you need more details. Please likewise refer to the unique rule tool.

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

– is guilty of wilful misbehavior, disobedience or wilful neglect of task that is not trivial and has actually not been excused by the company. Note: “wilful” includes when an employee planned the resulting consequence or acted recklessly if they knew or should have known the effects their conduct would have. Poor work conduct that is unintentional or unintentional is normally not considered wilful;

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

– the term ends or employment 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 ends or the job is completed;

See likewise: Employment Standards Self-Service Tool

Wrongful termination

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 employees might have rights under the typical law that are greater than the rights to see of termination (or termination pay) and severance pay under the ESA. An employee may wish to sue their former company in court for “wrongful termination”. Employees should know that they can not sue a company for wrongful termination and file a claim for termination pay or discontinuance wage with the ministry for the exact same termination or severance of work. A worker should select one or the other. Employees may wish to get legal advice concerning their rights.