Termination Of Employment

A variety of expressions are frequently used to describe situations when work 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 ended if the employer:

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

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

– lays an employee off for a duration that is longer than a “short-term layoff”.

In many cases, when an employer ends the work of an employee who has actually been continually employed for three months, the company needs to supply the worker with either written notice 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 staff member is entitled to receive).

The ESA does not need an employer to give a worker a factor why their work is being terminated. There are, however, some situations where a company can not terminate a staff member’s employment even if the company is prepared to offer correct written notification or termination pay. For instance, a company can not end somebody’s employment, or punish them in any other way, if any part of the reason for the termination of employment is based on the worker asking questions about the ESA or exercising a right under the ESA, such as declining to work in excess of the daily or weekly hours of work optimums, or taking a leave of lack defined in the ESA. Please see the chapter on reprisals.

Getting approved for termination notice or pay in lieu

Certain employees are not entitled to see of termination or termination pay under the ESA. Examples consist of: staff members who are guilty of wilful misbehavior, disobedience, or wilful overlook of responsibility that is not unimportant and has not been condoned by the company. Other examples include construction workers, workers on short-lived layoff, workers who decline an offer of affordable alternative employment and employees who have been utilized less than 3 months.

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

The termination-of-employment rules are totally separate from any entitlements an employee might have to be paid severance pay under the ESA.

Constructive termination

A useful dismissal may happen when an employer makes a significant modification to a basic term or condition of a worker’s employment without the worker’s real or implied permission.

For example, a staff member may be constructively dismissed if the company makes changes to the employee’s terms and conditions of employment that result in a substantial decrease in wage or a significant unfavorable change in such things as the worker’s work area, hours of work, authority, or position. Constructive termination might also consist of circumstances where a company bothers or abuses an employee, or an employer offers a staff member a warning to “stop or be fired” and the worker resigns in response.

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

Constructive termination is a complex and hard subject. For more details on positive dismissal, please get in touch with the Information Centre at 1-800-531-5551.

Temporary layoff

An employee is on short-lived layoff when an employer cuts down or stops the staff member’s work without ending their work (for example, laying somebody off sometimes when there is inadequate work to do). The simple reality that the company does not specify a recall date when laying the staff member off does not always indicate that the lay-off is not momentary. Note, employment however, that a lay-off, even if meant to be short-lived, employment might result in constructive dismissal if it is not allowed by the employment agreement.

For the functions 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 normally earn (or earns usually) in a week.

A week of layoff does not consist of any week in which the worker did not work for one or more days since the employee was not able or offered to work, was subject to disciplinary suspension, or was not supplied with work because of a strike or lockout at their place of employment or somewhere else.

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

Under the ESA, a “short-term layoff” can last:

1. not more than 13 weeks of layoff in any period of 20 consecutive weeks;
or

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

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

– the staff member gets additional joblessness advantages;
or

– the employee would be entitled to receive additional welfare however isn’t receiving them since they are utilized in other places;
or

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

– the company remembers the worker within the time frame set out in an arrangement 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 recalls an employee who is represented by a trade union within the time set out in an agreement in between the union and the employer.

If a worker is laid off for a duration longer than a short-term layoff as set out above, the company is thought about to have actually ended the staff member’s employment. Generally, the employee will then be entitled to termination pay.

Written notice of termination and termination pay

Under the ESA, a company can terminate the work of a worker who has been employed constantly for three months or more if either:

– the employer has actually provided the employee correct composed notification of termination and the notification duration has actually expired

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

Written notice of termination

A worker is entitled to notice of termination (or termination pay instead of notification) if they have been constantly used for at least 3 months. An individual is thought about “employed” not just while they are actively working, however also during any time in which they are not working however the work relationship still exists (for instance, time in which the worker is off sick or on leave or on lay-off).

The quantity of notification to which a staff member is entitled depends on their “duration of employment”. An employee’s duration of work includes not only all time while the employee is actively working but likewise any time that they are not working however the work relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a momentary lay-off, the staff member’s work is considered (or thought about) to have 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 work, despite the fact that the worker might still be employed for functions of the “continually employed for 3 months” qualification

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

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

The following chart specifies the amount of notice needed:

Note: Special rules figure out the amount of notification required when it comes to mass terminations – where the work of 50 or more workers is terminated at an employer’s establishment within a four-week period.

Requirements throughout the statutory notification duration

During the statutory notice period, an employer needs to:

– not lower the staff member’s wage rate or modify any other term or condition of employment;

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

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

Regular rate

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

Regular wages

These are wages besides 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 typically works the exact same variety of hours weekly, a routine work week is a week of that many hours, not consisting of overtime hours.

Some staff members do not have a routine work week. That is, they do not work the exact same variety of hours weekly or they are paid on a basis other than time. For these employees, the “regular earnings” for a “regular work week” is the average amount of the regular earnings earned by the staff member in the weeks in which the worker worked during the duration of 12 weeks right away preceding the date the notification was given.

An employer is not allowed to set up a staff member’s trip time during the statutory notice duration unless the employee-after receiving written notification of termination of employment-agrees to take their vacation time during the notice period.

If an employer offers longer notification than is required, the statutory part of the notice period is the last part of the duration that ends on the date of termination.

How to supply written notification

Most of the times, written notification of termination of work must be resolved to the employee. It can be supplied personally or by mail, fax or email, as long as shipment can be validated.

There are special rules for providing notice of termination if a staff member 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 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 classification of those employees the employer means to end and the date of the proposed termination. The publishing of the notice is considered to be notification of termination, as of the date of the publishing, to an employee who is “bumped” by an employee called in the notice. However, this notification of termination must still satisfy the length requirements set out in the ESA.

There are also special guidelines relating to how notification is provided when there is a mass termination.

Termination pay

An employee who does not receive the written notification needed under the ESA needs to be given termination pay in lieu of notification. Termination pay is a swelling amount payment equivalent to the routine salaries for a routine work week that an employee would otherwise have been entitled to throughout the written notice duration. A worker earns vacation pay on their termination pay. Employers need to likewise continue to make whatever contributions would be required to maintain the advantages the employee would have been entitled to had they continued to be used through the notification period.

Example: Regular work week

Sarah has actually worked for three and a half years. Now her job has actually been eliminated and her work has been terminated. Sarah was not provided any written notification of termination.

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

Sarah’s routine wages for a routine work week are computed:

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

Her termination pay is calculated:

$ 800.00 X 3 weeks = $2,400.00

Then her vacation pay on her termination pay is determined:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The company should also ensure ongoing coverage for any advantage or pension plans that used to her for three weeks.

Example: No routine work week

Gerry has actually operated at a retirement 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 percent getaway pay.

Gerry’s employer eliminated his position and did not provide Gerry any written notification of termination. Gerry was ill and off work for 2 of the 12 weeks instantly 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 typical earnings per week are computed:

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

His termination pay is computed:

$ 180.00 × 4 weeks = $720.00

Then his getaway pay on his termination pay is computed:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company should likewise ensure continued coverage for any advantage or pension that used to him for 4 weeks.

When to pay termination pay

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

Mass termination

Special guidelines for notification of termination might use in cases of mass termination (when an employer is terminating 50 or more workers at its facility within a four-week period).

Meaning of “facility”

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

– they lie within the exact same municipality, or

– a staff member at one area has contractual seniority rights that extend to the other location, allowing the worker to displace another staff member (also called “bumping rights”).

Effective October 26, 2023, in cases of mass termination, the term “facility” includes a staff member’s home, but just if the employee works from home and does not operate at any other location where the company brings on business.

This will require that staff members who work exclusively remotely be considered for inclusion in the count when identifying whether 50 or more staff members have been ended.

Note that where an employee performs work both from their home and from another place where the company carries on organization (for example, a workplace), their home is not included in the meaning of “facility”. Instead, the employee is considered to have a connection to the workplace location and, for that reason, for the function of mass termination, the staff member is consisted of with respect to that workplace area.

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

ABC Company has an office and a warehouse situated in London, ON. Sabrina lives in London and works for ABC Company specifically remotely: 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 office, London warehouse and Sabrina’s London home are thought about one “facility.”

Employer responsibilities in a mass termination

When a mass termination takes place, the company needs to finish and provide 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.

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

– mail delivery to the Director’s workplace, if the shipment can be confirmed.

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

Any notice to the impacted staff members is not considered to have been provided till the Form 1 is received by the Director; simply put, notice of mass termination is not efficient up until the Director receives the Form 1.

In addition to supplying staff members with specific notices of termination, the employer must, on the very first day of the notification period:

– post a copy of the Form 1 provided to the Director in the office where it will come to the attention of the impacted workers.

– supply a copy of the Form 1 to each impacted worker.

The amount of notification staff members must receive in a mass termination is not based on the staff members’ length of work, however on the number of employees who have been ended. A company should provide:

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

– 12 weeks see if the work of 200 to 499 staff members is to be ended

– 16 weeks notice 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 use:

– the variety of employees whose employment is being terminated represents not more than 10 percent of the workers who have actually been used for at least 3 months at the establishment

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

Mass termination: resignation by an employee

An employee who has actually received termination notice under the mass termination guidelines who desires to resign before the termination date supplied in the company’s notification must provide the company at least one week’s composed notification of resignation if the worker has been utilized for less than 2 years. If the work period has actually been 2 years or more, the staff member needs to provide at least 2 weeks’ written notification of resignation. However, the employee does not have to notify of resignation if the company constructively dismisses the employee or breaches a term of the contract.

Temporary work after termination date in notification

A company can provide work to an employee who has actually been offered notice of termination on a short-lived basis in the 13-week duration after the termination date set out in the notice without impacting the original date of the termination and without being required to supply any more notification of termination to the employee when the temporary work ends.

If a staff member works beyond the 13-week duration after the termination date and then has their employment terminated, the employee will be entitled to a brand-new written notice of termination as if the previous notice had actually never ever been given. The staff member’s duration of employment will then also consist of the period of momentary work.

Recall rights

A “recall right” is the right of an employee on a layoff to be recalled to work by their company under a term or condition of employment. This right is frequently found in collective contracts.

A worker who has recall rights and who is entitled to termination pay because of a layoff of 35 weeks or more might select to:

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

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

If an employee is entitled to both termination pay and discontinuance wage, they should make the 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 choose, the company must send the amount 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 chooses to keep their recall rights or stops working to choose, the employer and the trade union must try to come to an arrangement to hold the termination pay (and discontinuance wage, if any) in trust for the worker. If they can not pertain to an arrangement, and the trade union advises the employer and the Director of Employment Standards in composing that efforts have actually failed, the company must send out the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If a worker selects to offer up their recall rights or if the recall rights expire, the money that is kept in trust should be sent out to the worker.

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

Exemptions to see of termination or termination pay

Much of these exemptions are intricate. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you require more info. Please likewise refer to the unique rule tool.

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

– is guilty of wilful misconduct, disobedience or wilful overlook of responsibility that is not trivial and has not been excused by the company. Note: “wilful” consists of when an employee intended the resulting consequence or acted recklessly if they knew or must have understood the results their conduct would have. Poor work conduct that is unexpected or unintentional is typically ruled out wilful;

– was employed for a specific length of time or until the completion of a specific task. However, such a worker will be entitled to discover of termination or termination pay if:- the work ends before the term ends or the task is completed; or

– the term ends or the task is not finished more than 12 months after the work started; or

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

See likewise: Employment Standards Self-Service Tool

Wrongful termination

Rights greater than ESA notification of termination, termination pay, discontinuance wage

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