Termination Of Employment

A number of expressions are typically used to describe circumstances when employment is ended. These include “let go,” “discharged,” “dismissed,” “fired” and “permanently laid off.”

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

– dismisses or stops employing a worker, including where a worker is no longer used due to the insolvency or insolvency of the company;

– “constructively” dismisses a worker and the staff member resigns, in action, within a reasonable 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 an employee who has actually been continually utilized for 3 months, the employer should supply the employee with either composed notice of termination, termination pay or a mix (as long as the notification and the number of weeks of termination pay together equal the length of notice the employee is entitled to get).

The ESA does not need an employer to provide a staff member a reason that their employment is being ended. There are, however, some scenarios where a company can not terminate an employee’s work even if the company is prepared to provide proper written notification or termination pay. For instance, an employer can not end someone’s employment, or punish them in any other method, if any part of the reason for the termination of employment is based on the employee asking questions about the ESA or working out a right under the ESA, such as declining to work in excess of the day-to-day or weekly hours of work maximums, 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 notice of termination or termination pay under the ESA. Examples consist of: employees who are guilty of wilful misbehavior, disobedience, or wilful disregard of duty that is not unimportant and has not been excused by the employer. Other examples include building and construction workers, employees on momentary layoff, employees who decline an offer of affordable alternative employment and staff members who have been employed less than 3 months.

There are a number of other exemptions to the termination of employment provisions of the ESA. See “Exemptions to observe of termination or termination pay.” Please also describe the unique rule tool.

The termination-of-employment guidelines are totally different from any privileges a staff member might have to be paid discontinuance wage under the ESA.

Constructive dismissal

A useful termination may take place when a company makes a significant modification to an essential term or condition of a worker’s employment without the employee’s actual or implied approval.

For example, a staff member might be constructively dismissed if the company makes modifications to the employee’s terms and conditions of work that result in a considerable reduction in salary or a significant unfavorable modification in such things as the employee’s work location, hours of work, authority, or position. Constructive termination might also consist of scenarios where a company pesters or abuses a staff member, or an employer offers an employee an ultimatum to “give up or be fired” and the worker resigns in reaction.

The employee would need to resign in response to the change within an affordable time period in order for the company’s actions to be thought about a termination of work for purposes of the ESA.

Constructive dismissal is a complex and hard subject. For additional information on useful dismissal, please contact the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

An employee is on short-lived layoff when a company cuts back or stops the worker’s work without ending their work (for example, laying somebody off at times when there is inadequate work to do). The simple fact that the employer does not define a recall date when laying the employee off does not always mean that the lay-off is not short-lived. Note, however, that a lay-off, even if meant to be temporary, may lead to constructive dismissal if it is not allowed by the employment agreement.

For the purposes of the termination provisions of the ESA, a “week of layoff” is a week in which the employee earned less than half of what they would ordinarily earn (or makes usually) in a week.

A week of layoff does not include any week in which the worker did not work for several days since the employee was unable or offered to work, went through disciplinary suspension, or was not provided with work because of a strike or lockout at their place of work or somewhere else.

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

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

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

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

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

– the worker receives additional joblessness advantages;
or

– the worker would be entitled to receive additional welfare but isn’t getting them due to the fact that they are utilized somewhere else;
or

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

– the company remembers the staff member within the time frame set out in an agreement with a staff member who is not represented by a trade union;
or

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

If a staff member is laid off for a period longer than a momentary layoff as set out above, the employer is considered to have actually ended the staff member’s work. Generally, the worker will then be entitled to termination pay.

Written notification of termination and termination pay

Under the ESA, a company can terminate the work of an employee who has actually been used continuously for three months or more if either:

– the company has actually offered the employee proper composed notification of termination and the notification period has actually expired

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

Written notice of termination

A worker is entitled to discover of termination (or termination pay instead of notice) if they have been constantly used for a minimum of 3 months. An individual is considered “used” not just while they are actively working, however likewise during 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 notification to which a staff member is entitled depends upon their “period of employment”. A staff member’s period of employment consists of not only perpetuity while the employee is actively working but likewise whenever that they are not working but the work relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a short-term lay-off, the employee’s work is deemed (or considered) to have 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 worker might still be employed for purposes of the “constantly used for three months” certification

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

It is possible, in some circumstances, for a person to have been “continually utilized” for 3 months or more and yet have a period of employment of less than three months. In such circumstances, the worker would be entitled to notice due to the fact that an employee who has actually been continually employed for a minimum of 3 months is entitled to see, and the minimum notice entitlement of one week uses to a worker with a duration of employment of any length less than one year.

The following chart specifies the quantity of notice needed:

Note: Special rules identify the quantity of notification required when it comes to mass terminations – where the work of 50 or more employees is terminated at a company’s establishment within a four-week period.

Requirements during the statutory notice period

During the statutory notice period, an employer needs to:

– not reduce the staff member’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 advantages strategies; and

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

Regular rate

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

Regular wages

These are wages aside from overtime pay, vacation pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and severance pay and particular contractual privileges.

Regular work week

For a staff member who typically works the very same number of hours every week, a routine work week is a week of that many hours, not including overtime hours.

Some employees do not have a routine work week. That is, they do not work the very same number of hours weekly or they are paid on a basis other than time. For these staff members, the “routine salaries” for a “regular work week” is the typical amount of the regular wages earned by the employee in the weeks in which the worker worked during the period of 12 weeks immediately preceding the date the notice was provided.

A company is not allowed to set up an employee’s vacation time during the statutory notification period unless the employee-after getting composed notification of termination of employment-agrees to take their getaway time throughout the notice duration.

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

How to provide written notification

Most of the times, composed notice of termination of work need to be dealt with to the staff member. It can be offered personally or by mail, fax or e-mail, as long as delivery can be confirmed.

There are special guidelines for offering notification of termination if a staff member has an agreement of work or a collective arrangement that supplies seniority rights that enable a worker 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 office (where it will be seen by the workers) setting out the names, seniority and task category of those staff members the company plans to terminate and the date of the proposed termination. The posting of the notice is thought about to be notice of termination, as of the date of the publishing, to a worker who is “bumped” by an employee called in the notice. However, this notification of termination must still fulfill the length requirements set out in the ESA.

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

Termination pay

A worker who does not get the written notice required under the ESA must be offered termination pay in lieu of notification. Termination pay is a swelling amount payment equivalent to the routine incomes for a regular work week that a worker would otherwise have been entitled to during the composed notification duration. A staff member earns holiday pay on their termination pay. Employers must likewise 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 utilized through the notification duration.

Example: Regular work week

Sarah has actually worked for 3 and a half years. Now her job has actually been gotten rid of and her employment has been terminated. Sarah was not provided any composed notification of termination.

Sarah worked 40 hours a week every week and was paid $20.00 an hour. She likewise received four percent getaway 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 regular earnings for employment a regular work week are calculated:

$ 20.00 an hour X 40 hours a week = $800.00 a week

Her termination pay is determined:

$ 800.00 X 3 weeks = $2,400.00

Then her getaway pay on her termination pay is computed:

4% of $2,400.00 = $96.00

Finally, her vacation 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 ensure continued protection for any benefit or pension strategies that used to her for 3 weeks.

Example: No routine work week

Gerry has operated at an assisted living home for 4 years. He works weekly, however his hours differ from week to week. His rate of pay is $25.00 an hour, and he is paid 6 per cent vacation pay.

Gerry’s employer eliminated his position and did not give Gerry any composed notification of termination. Gerry was ill and off work for 2 of the 12 weeks immediately preceding the day his employment was terminated. Gerry earned $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 per week are calculated:

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

His termination pay is determined:

$ 180.00 × 4 weeks = $720.00

Then his holiday pay on his termination pay is determined:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

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

When to pay termination pay

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

Mass termination

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

Meaning of “establishment”

An “establishment” is a place at which the employer continues company. Separate places can be considered one facility if either:

– they are located within the same municipality, or

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

Effective October 26, 2023, in cases of mass termination, the term “establishment” consists of a worker’s home, however just if the worker works from home and does not work at any other location where the employer carries on service.

This will need that staff members who work exclusively remotely be thought about for addition in the count when determining whether 50 or more workers have actually been ended.

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

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

ABC Company has a workplace and a storage facility situated in London, ON. Sabrina lives in London and works for ABC Company specifically remotely: she carries out work for the business from home and does not operate at the workplace.

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

Employer responsibilities in a mass termination

When a mass termination occurs, the employer needs to finish and provide 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 delivery to the workplace, if the delivery 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 notice to the affected staff members is ruled out to have been offered until the Form 1 is gotten by the Director; simply put, notice of mass termination is not effective until the Director receives the Form 1.

In addition to providing workers with specific 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 office where it will concern the attention of the affected staff members.

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

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

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

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

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

Exception to the mass termination rules

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

– the variety of workers whose work is being terminated represents not more than 10 percent of the staff members who have been employed for a minimum of three months at the facility

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

Mass termination: resignation by a worker

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

Temporary work after termination date in notification

A company can provide work to an employee who has actually been notified of termination on a short-term basis in the 13-week duration after the termination date set out in the notification without affecting the original date of the termination and without being needed to offer any more notification of termination to the employee when the short-term work ends.

If an employee works beyond the 13-week duration after the termination date and then has their employment ended, the worker will be entitled to a brand-new written notice of termination as if the previous notice had actually never been offered. The worker’s duration of work will then likewise include the duration of short-term 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 arrangements.

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 might choose to:

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

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

If an employee is entitled to both termination pay and discontinuance wage, they need to make the same choice for both.

If a worker who is not represented by a trade union elects to keep their recall rights or fails to make a choice, the employer needs to 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 a staff member who is represented by a trade union elects to keep their recall rights or fails to decide, the company and the trade union must try to come to an arrangement to hold the termination pay (and discontinuance wage, employment 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 writing that efforts have actually failed, the employer must send out the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the money in trust.

If a staff member selects to quit their recall rights or if the recall rights expire, the cash that is held in trust needs to be sent to the worker.

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

Exemptions to observe of termination or termination pay

Many of these exemptions are complex. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you need more information. Please likewise refer to the unique guideline tool.

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

– is guilty of wilful misbehavior, disobedience or wilful overlook of task that is not insignificant and has not been excused by the company. Note: “wilful” includes when a worker planned the resulting consequence or acted recklessly if they knew or ought to have known the impacts their conduct would have. Poor work conduct that is unexpected or unintended is usually ruled out wilful;

– was worked with for a particular length of time or until the conclusion of a specific task. However, such an employee will be entitled to see of termination or termination pay if:- the employment ends before the term expires or the task is completed; or

– the term ends or the task is not completed more than 12 months after the work began; or

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

See likewise: Employment Standards Self-Service Tool

Wrongful dismissal

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

The guidelines under the ESA about termination and severance of employment are minimum requirements. Some workers may have rights under the common law that are greater than the rights to observe of termination (or termination pay) and severance pay under the ESA. A worker might want to sue their previous company in court for “wrongful dismissal”. Employees need to understand 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 exact same termination or severance of employment. A staff member needs to pick one or the other. Employees might wish to obtain legal suggestions concerning their rights.