Termination Of Employment

A variety of expressions are typically used to explain circumstances when work is ended. These consist of “release,” “discharged,” “dismissed,” “fired” and “completely laid off.”

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

– dismisses or stops using a staff member, consisting of where a worker is no longer employed due to the bankruptcy or job insolvency of the employer;

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

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

In many cases, when an employer ends the work of a staff member who has actually been continually utilized for three months, the company needs to provide the worker with either written notification of termination, termination pay or a mix (as long as the notification and the variety of weeks of termination pay together equal the length of notice the staff member is entitled to get).

The ESA does not need a company to give a worker a factor why their work is being terminated. There are, however, some scenarios where an employer can not terminate a worker’s work even if the company is prepared to provide appropriate written notice or termination pay. For example, a company can not end somebody’s employment, or punish them in any other method, if any part of the reason for the termination of employment is based upon the worker asking questions 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 optimums, or taking a leave of lack specified in the ESA. Please see the chapter on reprisals.

Getting approved for termination notice or pay in lieu

Certain workers are not entitled to observe of termination or termination pay under the ESA. Examples include: staff members who are guilty of wilful misbehavior, disobedience, or wilful disregard of task that is not minor and has actually not been condoned by the company. Other examples include building and construction workers, employees on short-lived layoff, workers who refuse a deal of affordable alternative work and staff members who have actually been used less than 3 months.

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

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

Constructive termination

A constructive termination might take place when a company makes a considerable modification to a fundamental term or condition of a worker’s work without the staff member’s actual or implied consent.

For example, a worker may be constructively dismissed if the employer makes changes to the employee’s conditions of employment that lead to a substantial decrease in income or a substantial unfavorable change in such things as the staff member’s work place, hours of work, authority, or position. Constructive dismissal may also include situations where a company bugs or abuses a staff member, or an employer offers an employee a final notice to “quit or be fired” and the staff member resigns in response.

The employee would have to resign in response to the modification within an affordable duration of time in order for the company’s actions to be thought about a termination of employment for purposes of the ESA.

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

Temporary layoff

A worker is on temporary layoff when an employer cuts down or stops the employee’s work without ending their employment (for instance, laying somebody off at times when there is not adequate work to do). The simple truth 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-lived. Note, nevertheless, that a lay-off, even if intended to be short-term, may lead to useful dismissal if it is not enabled by the employment agreement.

For the purposes of the termination arrangements of the ESA, a “week of layoff” is a week in which the worker earned less than half of what they would ordinarily earn (or earns on average) 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 because the employee was not able or readily available to work, was subject to disciplinary suspension, or was not supplied with work since of a strike or lockout at their location of employment or elsewhere.

Employers are not required under the ESA to supply employees with a composed notice of a short-term layoff, nor do they need to supply a reason for the lay-off. (They may, nevertheless, be needed to do these things under a collective 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 consecutive weeks;
or

2. more than 13 weeks in any period of 20 consecutive weeks, but less than 35 weeks of layoff in any duration of 52 consecutive weeks, where:- the staff member continues to get considerable payments from the employer;
or

– the employer continues to make payments for job the advantage of the employee under a genuine group or employee insurance strategy (such as a medical or drug insurance plan) or a genuine retirement or pension strategy;
or

– the staff member receives supplementary unemployment benefits;
or

– the worker would be entitled to receive extra welfare but isn’t getting them due to the fact that they are used elsewhere;
or

– the employer recalls the worker 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 a contract with a worker who is not represented by a trade union;
or

3. a layoff longer than a layoff explained in ‘B’ where the employer recalls an employee who is represented by a trade union within the time set out in an agreement in between the union and the company.

If a worker is laid off for a duration longer than a momentary layoff as set out above, the company is considered to have terminated the staff member’s employment. Generally, the employee will then be entitled to termination pay.

Written notification of termination and termination pay

Under the ESA, an employer can terminate the work of a staff member who has actually been used constantly for three months or more if either:

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

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

Written notification of termination

A worker is entitled to discover of termination (or termination pay instead of notification) if they have actually been constantly employed for at least three months. A person is thought about “used” not only while they are actively working, but also throughout at any time in which they are not working however the employment relationship still exists (for instance, time in which the employee is off ill or on leave or on lay-off).

The quantity of notification to which a staff member is entitled depends on their “duration of work”. A worker’s period of work includes not only perpetuity while the worker 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 temporary lay-off, the staff member’s employment is deemed (or thought about) to have actually been terminated on the 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 employee may still be utilized for purposes of the “continuously used for 3 months” certification

– if 2 different durations of work are separated by more than 13 weeks, only the most current period counts for functions of notice of termination

It is possible, in some circumstances, for an individual to have been “continuously utilized” for 3 months or more and yet have a period of work of less than three months. In such scenarios, the staff member would be entitled to notice since a staff member who has actually been continuously utilized for a minimum of three months is entitled to observe, and the minimum notification privilege of one week applies to a worker with a period of employment of any length less than one year.

The following chart defines the quantity of notification needed:

Note: Special rules identify the quantity of notice required in the case of mass terminations – where the work of 50 or more staff members is terminated at a company’s facility within a four-week period.

Requirements throughout the statutory notice duration

During the statutory notification duration, an employer needs to:

– not decrease the staff member’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 advantages plans; and

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

Regular rate

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

Regular incomes

These are salaries besides overtime pay, holiday pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and severance pay and particular legal privileges.

Regular work week

For a worker who normally works the very same variety of hours each week, a routine work week is a week of that numerous hours, not consisting of overtime hours.

Some employees do not have a routine work week. That is, they do not work the exact same number of hours every week or they are paid on a basis other than time. For these employees, the “routine salaries” for a “routine work week” is the typical amount of the routine incomes made by the staff member in the weeks in which the worker worked throughout the duration of 12 weeks right away preceding the date the notice was offered.

A company is not permitted to schedule a staff member’s trip time during the statutory notification duration unless the employee-after getting composed notice of termination of employment-agrees to take their trip time throughout the notice period.

If an employer offers longer notice 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 supply written notice

For the most part, written notification of termination of work must be addressed to the worker. It can be supplied face to face or by mail, fax or email, as long as shipment can be validated.

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

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

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

Termination pay

An employee who does not receive the composed notice required under the ESA must be provided termination pay in lieu of notice. Termination pay is a lump sum payment equal to the regular salaries for a routine work week that an employee would otherwise have actually been entitled to throughout the written notification period. A staff member makes trip pay on their termination pay. Employers need to also continue to make whatever contributions would be required to keep the benefits the employee would have been entitled to had they continued to be utilized through the notice duration.

Example: Regular work week

Sarah has actually worked for 3 and a half years. Now her task has actually been removed and her work has been terminated. Sarah was not provided any composed notice of termination.

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

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

$ 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 vacation pay on her termination pay is determined:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

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

Example: No routine work week

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

Gerry’s employer eliminated his position and did not offer Gerry any written notification of termination. Gerry was ill and off work for two 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 four weeks of termination pay.

Gerry’s per week are computed:

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

His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00

Then his holiday pay on his termination pay is computed:

6% of $720.00 = $43.20

Finally, his getaway pay is added to his termination pay:

$ 720.00 + $43.20 = $763.20

Result: job Gerry is entitled to $763.20. The employer needs to also guarantee continued protection for any benefit or pension strategies that applied to him for 4 weeks.

When to pay termination pay

Termination pay need to be paid to a staff member either 7 days after the worker’s work is terminated or on the staff member’s next routine 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 workers at its establishment within a four-week duration).

Meaning of “establishment”

An “establishment” is a place at which the employer carries on service. Separate areas can be considered one establishment if either:

– they lie within the same municipality, or

– a worker at one area has legal seniority rights that reach the other area, enabling the employee to displace another staff member (likewise called “bumping rights”).

Effective October 26, 2023, in cases of mass termination, the term “establishment” includes an employee’s home, however only if the employee works from home and does not work at any other location where the company continues service.

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

Note that where a staff member performs work both from their home and from another place where the company continues organization (for instance, a workplace), their home is not included in the meaning of “establishment”. Instead, the employee is thought about to have a connection to the office location and, for that reason, for the purpose of mass termination, the staff member is included with regard to that workplace location.

Example: where several locations are considered one “facility”

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

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

Employer obligations in a mass termination

When a mass termination occurs, the company needs to finish and deliver 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 shipment 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 shipment can be confirmed.

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

Any notice to the affected employees is not thought about to have actually been provided until the Form 1 is received by the Director; in other words, notice of mass termination is ineffective until the Director gets the Form 1.

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

– publish a copy of the Form 1 offered to the Director in the work environment where it will concern the attention of the affected employees.

– supply a copy of the Form 1 to each affected staff member.

The quantity of notification staff members should get in a mass termination is not based on the workers’ length of employment, however on the number of employees who have been terminated. A company must give:

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

– 12 weeks discover if the work of 200 to 499 workers is to be ended

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

Exception to the mass termination guidelines

The mass termination rules do not apply if these 2 things apply:

– the number of workers whose employment is being terminated represents not more than 10 per cent of the employees who have actually been utilized for at least 3 months at the facility

– none of the terminations are brought on by the permanent discontinuance of all or part of the company’s business at the facility

Mass termination: resignation by a worker

A staff member who has received termination notice under the mass termination guidelines who wishes to resign before the termination date offered in the company’s notice must offer the company at least one week’s written notification of resignation if the employee has been used for less than two years. If the work period has actually been 2 years or more, the staff member should give a minimum of two weeks’ written notice of resignation. However, the staff member does not have to offer notification of resignation if the company constructively dismisses the staff member or breaches a regard to the contract.

Temporary work after termination date in notification

An employer can supply work to a worker who has been notified of termination on a temporary 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 required to offer any additional notice of termination to the employee when the short-lived work ends.

If a staff member works beyond the 13-week duration after the termination date and then has their employment ended, the staff member will be entitled to a new composed notice of termination as if the previous notice had never ever been offered. The employee’s period of employment will then also include the period of short-term work.

Recall rights

A “recall right” is the right of a worker on a layoff to be recalled to work by their company under a term or condition of work. This right is commonly found in cumulative agreements.

An employee 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 severance pay, if they were entitled to severance pay) at that time;
or

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

If a staff member is entitled to both termination pay and severance pay, they must make the same option for both.

If a worker who is not represented by a trade union chooses to keep their recall rights or stops working to make an option, the employer must 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 an employee who is represented by a trade union elects to keep their recall rights or stops working to decide, the company and the trade union must attempt to come to an arrangement to hold the termination pay (and severance pay, if any) in trust for the worker. If they can not pertain to a plan, and the trade union encourages the company and the Director of Employment Standards in composing that efforts have failed, the employer needs to send the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.

If an employee picks to quit their recall rights or if the recall rights expire, the money that is kept in trust should be sent to the staff member.

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

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 require more info. Please likewise refer to the special rule tool.

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

– is guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the company. Note: “wilful” includes when a staff member meant the resulting repercussion or acted recklessly if they knew or should have understood the effects their conduct would have. Poor job work conduct that is unexpected or unintended is normally not thought about wilful;

– was employed for a specific length of time or until the conclusion of a particular job. However, such an employee will be entitled to observe 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 completed more than 12 months after the employment started; or

– the work continues for 3 months or more after the term expires or the task is finished;

See also: Employment Standards Self-Service Tool

Wrongful termination

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

The guidelines under the ESA about termination and severance of employment are minimum requirements. Some workers might have rights under the typical law that are higher than the rights to see of termination (or termination pay) and severance pay under the ESA. A worker might desire to sue their previous company in court for “wrongful dismissal”. Employees should understand that they can not take legal action against an employer for wrongful termination and submit a claim for termination pay or discontinuance wage with the ministry for the very same termination or severance of employment. A worker must choose one or the other. Employees might want to obtain legal recommendations concerning their rights.