Termination Of Employment

A number of expressions are frequently used to describe situations when work is ended. These consist of “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 an employee, including where a staff member is no longer utilized due to the insolvency or insolvency of the company;

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

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

For the most part, when an employer ends the employment of a staff member who has actually been constantly used for three months, the company should provide the worker with either composed notification of termination, termination pay or a combination (as long as the notification and the number of weeks of termination pay together equivalent the length of notice the staff member is entitled to receive).

The ESA does not need a company to offer an employee a reason that their employment is being ended. There are, however, some situations where a company can not terminate a staff member’s work even if the company is prepared to give correct written notification or termination pay. For example, an employer can not end somebody’s employment, or penalize them in any other method, if any part of the reason 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 refusing to work in excess of the everyday or weekly hours of work maximums, or taking a leave of lack specified in the ESA. Please see the chapter on reprisals.

Qualifying for termination notice or pay in lieu

Certain employees are not entitled to discover of termination or employment termination pay under the ESA. Examples consist of: workers who are guilty of wilful misconduct, disobedience, or wilful disregard of responsibility that is not unimportant and has not been excused by the company. Other examples include construction employees, workers on temporary layoff, staff members who refuse an offer of sensible alternative work and staff members who have been used less than 3 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 guideline tool.

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

Constructive dismissal

A positive termination might occur when an employer makes a significant change to a fundamental term or condition of a worker’s employment without the employee’s actual or implied approval.

For instance, a worker may be constructively dismissed if the employer makes modifications to the employee’s terms of work that result in a considerable decrease in income or a considerable unfavorable change in such things as the worker’s work location, hours of work, authority, or position. Constructive dismissal may also include situations where a company bothers or abuses a worker, or an employer offers an employee an ultimatum to “give up or be fired” and the employee resigns in reaction.

The worker would have to resign in action to the modification within a sensible amount of time in order for the employer’s actions to be considered a termination of work for purposes of the ESA.

Constructive termination is a complex and hard subject. For more details on positive termination, please call the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A worker is on momentary layoff when a company cuts down or stops the staff member’s work without ending their work (for instance, laying somebody off sometimes when there is inadequate work to do). The simple fact that the employer does not define a recall date when laying the staff member off does not necessarily suggest that the lay-off is not short-term. Note, employment nevertheless, that a lay-off, even if planned to be short-lived, may lead to useful dismissal if it is not enabled by the employment agreement.

For the functions of the termination provisions of the ESA, a “week of layoff” is a week in which the worker made less than half of what they would ordinarily earn (or earns on average) in a week.

A week of layoff does not consist of any week in which the worker did not work for several days due to the fact that the worker was not able or offered to work, was subject to disciplinary suspension, or was not provided with work due to the fact that of a strike or lockout at their location of work or somewhere else.

Employers are not needed under the ESA to supply staff members with a composed notification of a temporary layoff, nor do they have to supply a reason for the lay-off. (They may, nevertheless, be needed to do these things under a collective arrangement or an employment agreement.)

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

1. not more than 13 weeks of layoff in any duration of 20 successive weeks;
or

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

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

– the employee receives additional unemployment advantages;
or

– the employee would be entitled to get supplemental joblessness benefits however isn’t receiving them due to the fact that they are employed elsewhere;
or

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

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

3. a layoff longer than a layoff explained in ‘B’ where the company remembers a staff member who is represented by a trade union within the time set out in a contract between the union and the employer.

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 ended the staff member’s employment. Generally, the staff member will then be entitled to termination pay.

Written notification of termination and termination pay

Under the ESA, an employer can end the employment of an employee who has actually been used continually for 3 months or more if either:

– the company has provided the worker appropriate composed notice of termination and the notification period has actually expired

– the company pays termination pay to the worker where no composed 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 employed for at least three months. A person is considered “employed” not just while they are actively working, but also throughout any time in which they are not working however the employment 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 an employee is entitled depends on their “duration of employment”. A staff member’s duration of work consists of not only perpetuity while the staff member is actively working however likewise at any time that they are not working but the employment relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a short-term lay-off, the employee’s employment is deemed (or considered) to have 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, despite the fact that the employee might still be employed for functions of the “continuously employed for 3 months” certification

– if two different durations of employment are separated by more than 13 weeks, just the most current period counts for purposes of notification of termination

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

The following chart defines the amount of notification required:

Note: Special guidelines figure out the quantity of notification needed in the case of mass terminations – where the work of 50 or more staff members is ended at an employer’s facility within a four-week period.

Requirements throughout the statutory notice duration

During the statutory notification period, an employer needs to:

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

– continue to make whatever contributions would be needed to keep the staff member’s benefits plans; and

– pay the staff member the salaries they are entitled to, which can not be less than the worker’s regular salaries for a regular work week weekly.

Regular rate

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

Regular salaries

These are earnings other than overtime pay, getaway 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 generally works the same number of hours every week, a regular work week is a week of that lots of hours, not including overtime hours.

Some workers do not have a regular work week. That is, they do not work the very same number of hours each week or they are paid on a basis aside from time. For these staff members, the “routine salaries” for a “regular work week” is the typical amount of the routine earnings made by the worker in the weeks in which the staff member worked during the duration of 12 weeks immediately preceding the date the notification was given.

An employer is not permitted to set up an employee’s trip time during the statutory notice period unless the employee-after getting composed notice of termination of employment-agrees to take their vacation time during the notification duration.

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

How to provide written notice

In many cases, composed notice of termination of employment must be dealt with to the staff member. It can be supplied in person or by mail, fax or e-mail, as long as delivery can be confirmed.

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

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

There are likewise unique guidelines concerning how notification is provided when there is a mass termination.

Termination pay

A staff member who does not get the composed notice needed under the ESA needs to be provided termination pay in lieu of notification. Termination pay is a swelling sum payment equivalent to the regular incomes for a routine work week that a worker would otherwise have been entitled to during the written notification period. A worker earns vacation pay on their termination pay. Employers must also continue to make whatever contributions would be needed to maintain the benefits the employee 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 task has been removed and her employment has actually been terminated. Sarah was not provided any composed notification of termination.

Sarah worked 40 hours a week weekly and was paid $20.00 an hour. She also received 4 percent trip pay. Because she worked for more than three years but less than four years, she is entitled to 3 weeks’ pay in lieu of notice.

Sarah’s regular incomes 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 trip pay on her termination pay is determined:

4% of $2,400.00 = $96.00

Finally, her trip pay is included to her termination pay:

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The employer should also ensure continued coverage for any advantage or pension that used to her for 3 weeks.

Example: No regular work week

Gerry has actually operated at an assisted living home for 4 years. He works each week, employment but his hours vary 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 give Gerry any written notification of termination. Gerry was ill and off work for two of the 12 weeks immediately preceding the day his employment was ended. Gerry earned $1,800.00 in the 12 weeks before the day on which his work ended.

Gerry is entitled to 4 weeks of termination pay.

Gerry’s typical earnings weekly are determined:

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

His termination pay is computed:

$ 180.00 × 4 weeks = $720.00

Then his holiday pay on his termination pay is calculated:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

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

Mass termination

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

Meaning of “facility”

An “facility” is a place at which the employer continues business. Separate areas can be thought about one establishment if either:

– they are situated within the same town, or

– an employee at one location has legal seniority rights that reach the other area, permitting the worker to displace another worker (likewise called “bumping rights”).

Effective October 26, 2023, in cases of mass termination, the term “facility” includes a worker’s home, but just if the staff member works from home and does not work at any other area where the employer brings on organization.

This will need that employees who work solely from another location be thought about for addition in the count when whether 50 or more workers have actually been ended.

Note that where a worker carries out work both from their home and from another place where the employer carries on service (for example, an office), their home is not included in the definition of “facility”. Instead, the staff member is thought about to have a connection to the office place and, for that reason, for the purpose of mass termination, the staff member is included with respect to that workplace area.

Example: where several locations are thought about one “facility”

ABC Company has a workplace and a storage facility situated in London, ON. Sabrina resides in London and works for ABC Company specifically from another location: she carries out work for the company from home and does not work at the office.

For the function of mass termination, the company’s London workplace, London storage facility and Sabrina’s London home are thought about one “facility.”

Employer commitments in a mass termination

When a mass termination takes place, the employer must complete and deliver 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 shipment to the Director’s workplace, if the shipment can be verified.

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

Any notification to the impacted staff members is not thought about to have actually been offered till the Form 1 is gotten by the Director; simply put, notification of mass termination is not reliable till the Director receives the Form 1.

In addition to offering employees with individual notifications of termination, the employer 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 impacted employees.

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

The quantity of notification workers need to get in a mass termination is not based upon the employees’ length of work, but on the variety of employees who have been ended. An employer must offer:

– 8 weeks see if the work of 50 to 199 workers is to be terminated

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

– 16 weeks see if the employment of 500 or more staff members is to be terminated

Exception to the mass termination guidelines

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

– the number of workers whose employment is being terminated represents not more than 10 per cent of the workers who have been employed for a minimum of three months at the establishment

– none of the terminations are brought on by the long-term discontinuance of all or part of the employer’s organization at the facility

Mass termination: resignation by a staff member

A worker who has received termination notification under the mass termination guidelines who wants to resign before the termination date offered in the company’s notice must provide the employer at least one week’s composed notice of resignation if the worker has actually been utilized for less than two years. If the employment period has actually been 2 years or more, the employee must provide a minimum of 2 weeks’ written notification of resignation. However, the worker does not need to notify of resignation if the employer constructively dismisses the employee or breaches a term of the contract.

Temporary work after termination date in notice

An employer can offer work to a staff member who has been provided notification of termination on a short-term basis in the 13-week period after the termination date set out in the notice without impacting the original date of the termination and without being needed to supply any additional notification of termination to the staff member when the short-term work ends.

If a staff member works beyond the 13-week duration after the termination date and then has their employment terminated, the worker will be entitled to a new composed notification of termination as if the previous notification had actually never ever been given. The worker’s period of work 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 company under a term or condition of employment. This right is frequently discovered in collective agreements.

An employee who has recall rights and who is entitled to termination pay since of a layoff of 35 weeks or more might pick to:

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

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

If an employee is entitled to both termination pay and employment severance pay, they need to make the exact same choice for both.

If a staff member who is not represented by a trade union elects to keep their recall rights or stops working to make a choice, the employer should send 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 elects to keep their recall rights or fails to make an option, the company 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 employment the employee. If they can not concern a plan, and the trade union advises the company and the Director of Employment Standards in composing that efforts have stopped working, the company should send the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the money in trust.

If an employee chooses to offer up their recall rights or if the recall rights end, the cash that is kept in trust needs to be sent out to the staff member.

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

Exemptions to discover of termination or termination pay

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

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

– is guilty of wilful misbehavior, disobedience or wilful overlook of duty that is not insignificant and has actually not been condoned by the employer. Note: “wilful” consists of when a worker meant the resulting repercussion or acted recklessly if they understood or should have understood the impacts 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 up until the conclusion of a specific task. However, such an employee will be entitled to observe of termination or termination pay if:- the employment ends before the term expires or the task is finished; or

– the term ends or the job is not finished more than 12 months after the employment started; or

– the employment continues for three months or more after the term expires or the job is finished;

See also: Employment Standards Self-Service Tool

Wrongful termination

Rights higher than ESA notice of termination, termination pay, discontinuance wage

The rules under the ESA about termination and severance of work are minimum requirements. Some staff members might have rights under the common law that are greater than the rights to discover of termination (or termination pay) and discontinuance wage under the ESA. A worker might want to sue their former employer in court for “wrongful termination”. Employees should be conscious that they can not take legal action against a company for wrongful termination and sue for termination pay or discontinuance wage with the ministry for the very same termination or severance of employment. A worker must pick one or the other. Employees might want to get legal advice concerning their rights.