Termination Of Employment

A number of expressions are commonly utilized to describe situations when employment is terminated. These include “let go,” “discharged,” “dismissed,” “fired” and “completely laid off.”

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

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

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

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

Most of the times, when a company ends the work of a worker who has actually been continuously employed for three months, the employer needs to offer the staff member with either composed notification of termination, termination pay or a mix (as long as the notice and the number of weeks of termination pay together equal the length of notification the worker is entitled to receive).

The ESA does not need an employer to offer an employee a reason that their employment is being ended. There are, however, some scenarios where an employer can not terminate a worker’s work even if the employer is prepared to offer proper composed notice or termination pay. For instance, a company can not end somebody’s work, or punish them in any other method, if any part of the factor for the termination of work is based upon the employee asking questions 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 optimums, 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 observe of termination or termination pay under the ESA. Examples include: staff members who are guilty of wilful misconduct, disobedience, or wilful overlook of duty that is not minor and has not been excused by the employer. Other examples consist of construction employees, staff members on short-term layoff, employees who refuse a deal of reasonable alternative employment and workers who have been utilized less than three months.

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

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

Constructive dismissal

A useful dismissal may take place when an employer makes a considerable modification to an essential term or condition of a worker’s employment without the employee’s real or implied permission.

For example, a staff member might be constructively dismissed if the employer makes modifications to the staff member’s terms and conditions of employment that lead to a substantial decrease in income or a considerable negative modification in such things as the worker’s work place, hours of work, authority, or position. Constructive dismissal may also include circumstances where an employer bugs or abuses an employee, or an employer offers a worker a warning to “give up or be fired” and the staff member resigns in response.

The employee would have to resign in reaction to the modification within a sensible period of time in order for the employer’s actions to be considered a termination of employment for functions of the ESA.

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

Temporary layoff

A staff member is on short-lived layoff when an employer cuts back or stops the employee’s work without ending their (for instance, laying someone off at times when there is insufficient work to do). The mere reality that the company does not define a recall date when laying the employee off does not necessarily imply that the lay-off is not short-term. Note, nevertheless, that a lay-off, even if planned to be short-lived, might result in useful termination if it is not permitted by the employment agreement.

For the purposes of the termination provisions of the ESA, a “week of layoff” is a week in which the staff member made less than half of what they would generally make (or earns typically) in a week.

A week of layoff does not include any week in which the worker did not work for several days because the staff member was unable or readily available to work, underwent disciplinary suspension, or was not provided with work because of a strike or lockout at their place of employment or elsewhere.

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

Under the ESA, a “short-lived 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 duration of 20 successive weeks, but less than 35 weeks of layoff in any duration of 52 successive weeks, where:- the staff member continues to get substantial payments from the employer;
or

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

– the worker gets supplemental welfare;
or

– the staff member would be entitled to get extra welfare but isn’t receiving them because they are used somewhere else;
or

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

– the employer recalls the employee within the time frame set out in an agreement with an employee who is not represented by a trade union;
or

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

If an employee is laid off for a period longer than a short-lived layoff as set out above, the employer is considered to have terminated the employee’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 work of a worker who has actually been utilized continuously for 3 months or more if either:

– the company has offered the worker appropriate written notice of termination and the notice duration has actually ended

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

Written notification of termination

A staff member is entitled to notice of termination (or termination pay rather of notification) if they have been constantly used for at least 3 months. An individual is thought about “employed” not only while they are actively working, however likewise throughout any time in which they are not working but the work relationship still exists (for example, time in which the worker is off ill or on leave or on lay-off).

The quantity of notice to which a staff member is entitled depends on their “period of work”. A staff member’s duration of work consists of not just perpetuity while the worker is actively working but also whenever 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 employee’s employment is considered (or considered) to have actually been ended on the first day of the lay-off-any time after that does not count as part of the worker’s period of employment, even though the staff member might still be used for purposes of the “continually used for 3 months” certification

– if two different periods of employment are separated by more than 13 weeks, only the most recent duration counts for purposes of notification of termination

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

The following chart defines the amount of notice required:

Note: Special rules determine the quantity of notice required when it comes to mass terminations – where the employment of 50 or more staff members is terminated at an employer’s facility within a four-week period.

Requirements throughout the statutory notice duration

During the statutory notification duration, an employer needs to:

– not lower the worker’s wage rate or change any other term or condition of employment;

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

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

Regular rate

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

Regular incomes

These are incomes besides overtime pay, trip pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of task pay, termination pay and discontinuance wage and specific legal entitlements.

Regular work week

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

Some staff members do not have a routine work week. That is, they do not work the same variety of hours weekly or they are paid on a basis besides time. For these employees, the “routine earnings” for a “regular work week” is the typical quantity of the regular wages made by the employee in the weeks in which the staff member worked during the duration of 12 weeks right away preceding the date the notification was provided.

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

If an employer offers longer notice than is required, 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

In most cases, written notice of termination of work need to be dealt with to the staff member. It can be offered face to face or by mail, fax or e-mail, as long as delivery can be validated.

There are special guidelines for supplying notification of termination if a staff member has a contract of employment or a cumulative contract that supplies seniority rights that permit a staff member who is to be laid off or whose employment is to be ended to displace (” bump”) other staff members.

Because case, the company should post a notification in the workplace (where it will be seen by the staff members) setting out the names, seniority and task classification of those workers the company intends to end and the date of the proposed termination. The publishing of the notice is considered to be notice of termination, as of the date of the publishing, to an employee who is “bumped” by a staff member named in the notice. However, this notice of termination need to still meet the length requirements set out in the ESA.

There are likewise unique rules regarding how notification is supplied when there is a mass termination.

Termination pay

An employee who does not get the composed notification required under the ESA needs to be offered termination pay in lieu of notice. Termination pay is a swelling amount payment equal to the routine incomes for a routine work week that an employee would otherwise have been entitled to during the composed notification duration. An employee makes getaway pay on their termination pay. Employers must also continue to make whatever contributions would be required to preserve the benefits the staff member would have been entitled to had they continued to be used through the notification duration.

Example: Regular work week

Sarah has worked for 3 and a half years. Now her job has actually been removed and her work has been ended. Sarah was not offered any written notification of termination.

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

Sarah’s routine incomes for a routine work week are calculated:

$ 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 getaway pay on her termination pay is determined:

4% of $2,400.00 = $96.00

Finally, her getaway pay is contributed to her termination pay:

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The employer must likewise make sure ongoing coverage for any advantage or pension strategies that applied to her for three weeks.

Example: No routine work week

Gerry has operated at a retirement home for 4 years. He works every week, but his hours vary from week to week. His rate of pay is $25.00 an hour, and he is paid 6 per cent vacation pay.

Gerry’s company removed his position and did not give Gerry any written notice of termination. Gerry was ill and off work for 2 of the 12 weeks right away preceding the day his work was ended. Gerry made $1,800.00 in the 12 weeks before the day on which his employment ended.

Gerry is entitled to 4 weeks of termination pay.

Gerry’s average earnings weekly are calculated:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off sick for employment 2 weeks for that reason these weeks are not included in the estimation of typical 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 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 employer needs to also guarantee continued protection for any advantage or pension strategies that used to him for four weeks.

When to pay termination pay

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

Mass termination

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

Meaning of “facility”

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

– they lie within the exact same municipality, or

– a worker at one area has legal seniority rights that extend to the other place, permitting the worker 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, however only if the staff member works from home and does not work at any other area where the employer brings on organization.

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

Note that where a worker carries out work both from their home and from another area where the employer continues organization (for example, a workplace), their home is not consisted of in the meaning of “establishment”. Instead, the staff member is thought about to have a connection to the office area and, for that reason, for the function of mass termination, the employee is included with regard to that workplace location.

Example: where numerous areas are thought about one “establishment”

ABC Company has an office 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 workplace.

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

Employer commitments in a mass termination

When a mass termination happens, the employer must finish and deliver the Form 1 (Notice of termination of work) to the Director of Employment Standards (Director) by:

– email to esa_form1_notice@ontario.ca.

– fax to (416) 326-7061.

– personal delivery 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 delivery can be confirmed.

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

Any notification to the affected workers is ruled out to have actually been given up until the Form 1 is gotten by the Director; simply put, notification of mass termination is ineffective till the Director gets the Form 1.

In addition to providing employees with individual notifications of termination, employment the company must, on the very first day of the notice period:

– publish a copy of the Form 1 offered to the Director employment in the work environment where it will come to the attention of the impacted workers.

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

The quantity of notification staff members need to get in a mass termination is not based upon the employees’ length of employment, however on the variety of workers who have actually been ended. A company needs to provide:

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

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

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

Exception to the mass termination rules

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

– the number of staff members whose work is being terminated represents not more than 10 per cent of the employees who have actually been employed for a minimum of 3 months at the facility

– none of the terminations are triggered by the long-term discontinuance of all or part of the company’s company at the establishment

Mass termination: resignation by a worker

A staff member who has actually received termination notice under the mass termination rules who wishes to resign before the termination date supplied in the employer’s notification need to provide the company a minimum of one week’s written notification of resignation if the employee has been utilized for less than 2 years. If the employment duration has been 2 years or more, the staff member needs to provide a minimum of two weeks’ composed notification of resignation. However, the employee does not have to offer notification of resignation if the company constructively dismisses the staff member or breaches a regard to the agreement.

Temporary work after termination date in notice

A company can supply work to a worker who has actually been offered notification of termination on a short-term basis in the 13-week period after the termination date set out in the notification without impacting the original date of the termination and without being needed to supply any further notification of termination to the staff member when the momentary work ends.

If a worker works beyond the 13-week duration after the termination date and then has their employment terminated, the staff member will be entitled to a new composed notice of termination as if the previous notification had never been given. The employee’s period of employment will then likewise include the period of temporary work.

Recall rights

A “recall right” is the right of a staff member on a layoff to be called back to work by their employer under a term or condition of employment. This right is frequently discovered in collective arrangements.

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 may choose to:

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

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

If an employee is entitled to both termination pay and severance pay, they should make the exact same option 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 company must 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 an employee who is represented by a trade union elects to keep their recall rights or fails to make a choice, the company and the trade union should try to come to a plan to hold the termination pay (and severance pay, if any) in trust for the worker. If they can not come to 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 chooses to quit their recall rights or if the recall rights end, the cash that is kept in trust must be sent out to the worker.

If the worker accepts a recall back to work, the cash that is kept in trust will be returned to the employer.

Exemptions to notice 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 info. Please likewise refer to the unique rule tool.

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

– is guilty of wilful misconduct, disobedience or wilful disregard of duty that is not trivial and has actually not been excused by the employer. Note: “wilful” consists of when a worker meant the resulting effect or acted recklessly if they understood or need to have understood the results their conduct would have. Poor work conduct that is unexpected or unintentional is typically ruled out wilful;

– was hired for a specific length of time or till the completion of a particular job. However, such a staff member will be entitled to discover of termination or termination pay if:- the work ends before the term expires or the job is finished; or

– the term expires or the task is not finished more than 12 months after the employment started; or

– the work continues for three months or more after the term ends or the job 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 may have rights under the typical law that are higher than the rights to discover of termination (or termination pay) and severance pay under the ESA. A worker may wish to sue their former employer in court for “wrongful termination”. Employees ought to know that they can not take legal action against an employer for wrongful dismissal and sue for termination pay or severance pay with the ministry for the same termination or severance of employment. A worker should pick one or the other. Employees might wish to get legal advice concerning their rights.