Termination Of Employment

A number of expressions are typically utilized to explain situations when work is ended. These consist of “let go,” “released,” “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 a worker, including where a staff member is no longer used due to the insolvency or insolvency of the company;

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

– lays a staff member off for a duration that is longer than a “temporary layoff”.

In many cases, when a company ends the employment of a staff member who has actually been continuously utilized for three months, the employer must provide the staff member with either composed notification of termination, termination pay or a combination (as long as the notification and the variety of weeks of termination pay together equal the length of notification the worker is entitled to get).

The ESA does not require a company to give an employee a reason that their employment is being terminated. There are, nevertheless, some situations where a company can not terminate a worker’s employment even if the company is prepared to give appropriate composed notification or termination pay. For example, a company can not end somebody’s work, or penalize them in any other method, if any part of the factor for the termination of employment is based upon the employee asking concerns about the ESA or working out a right under the ESA, such as declining to work in excess of the daily or weekly hours of work maximums, or employment taking a leave of lack defined in the ESA. Please see the chapter on reprisals.

Receiving termination notification or pay in lieu

Certain employees are not entitled to observe of termination or termination pay under the ESA. Examples include: workers who are guilty of wilful misconduct, disobedience, or wilful overlook of duty that is not unimportant and has actually not been excused by the company. Other examples include building workers, employees on temporary layoff, staff members who refuse an offer of affordable alternative employment and employees who have been employed less than three months.

There are a number of other exemptions to the termination of employment arrangements of the ESA. See “Exemptions to see of termination or termination pay.” Please likewise refer to the special guideline tool.

The termination-of-employment rules are entirely different from any privileges an employee may need to be paid discontinuance wage under the ESA.

Constructive termination

A positive termination may occur when a company makes a considerable modification to a fundamental term or condition of an employee’s work without the employee’s real or implied approval.

For example, a staff member might be constructively dismissed if the company makes modifications to the staff member’s terms and conditions of work that result in a significant reduction in salary or a substantial negative change in such things as the employee’s work place, hours of work, authority, or position. Constructive termination might likewise include situations where an employer pesters or abuses an employee, or a company offers a worker a demand to “give up or be fired” and the employee resigns in action.

The worker would have to resign in reaction to the change within a sensible amount 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 challenging topic. To learn more on useful termination, please get in touch with the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

An employee is on short-term layoff when an employer cuts down or stops the staff member’s work without ending their work (for example, laying someone off at times when there is insufficient work to do). The mere truth that the company does not define a recall date when laying the staff member off does not always mean that the lay-off is not short-term. Note, nevertheless, that a lay-off, even if planned to be momentary, may result in positive dismissal if it is not enabled by the work contract.

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

A week of layoff does not consist of any week in which the worker did not work for several days due to the fact that the staff member was not able or available to work, was subject to disciplinary suspension, or was not supplied with work due to the fact that of a strike or lockout at their place of work or in other places.

Employers are not needed under the ESA to provide employees with a composed notification of a short-lived layoff, nor do they need to offer a factor for the lay-off. (They may, nevertheless, be needed to do these things under a cumulative 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 successive weeks, however less than 35 weeks of layoff in any period of 52 successive weeks, where:- the staff member continues to get substantial payments from the company;
or

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

– the staff member gets additional welfare;
or

– the staff member would be entitled to get extra welfare but isn’t getting them because they are used in other places;
or

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

– the employer 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 explained in ‘B’ where the company remembers a worker who is represented by a trade union within the time set out in an arrangement in 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 company is thought about to have actually terminated the employee’s employment. Generally, the worker 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 actually been employed constantly for three months or more if either:

– the employer has provided the employee appropriate written notification of termination and the notice period has actually ended

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

Written notification of termination

A staff member is entitled to observe of termination (or termination pay rather of notice) if they have been continuously utilized for a minimum of three months. A person is considered “employed” not just while they are actively working, but also during whenever in which they are not working but the work relationship still exists (for instance, time in which the worker is off ill or on leave or on lay-off).

The amount of notification to which a worker is entitled depends on their “period of employment”. An employee’s period of employment consists of not only all time while the worker is actively working however likewise whenever 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 worker’s work is considered (or thought about) to have been ended on the very first day of the lay-off-any time after that does not count as part of the worker’s duration of employment, even though the employee might still be used for functions of the “continuously employed for three months” credentials

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

It is possible, in some scenarios, for a person to have been “continuously used” for 3 months or more and yet have a duration of employment of less than three months. In such situations, the worker would be entitled to see because a staff member who has actually been continuously employed for a minimum of three months is entitled to see, and employment the minimum notification privilege of one week uses to a staff member with a duration of work of any length less than one year.

The following chart specifies the amount of notification required:

Note: Special guidelines identify the quantity of notification required in the case of mass terminations – where the employment of 50 or more employees is ended at an employer’s establishment within a four-week duration.

Requirements throughout the statutory notification duration

During the statutory notice period, an employer must:

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

– continue to make whatever contributions would be needed to keep the worker’s advantages strategies; and

– pay the employee the wages they are entitled to, which can not be less than the worker’s regular incomes for a regular 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 earnings besides overtime pay, getaway pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of task pay, termination pay and severance pay and particular legal privileges.

Regular work week

For a worker who normally 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 employees do not have a routine work week. That is, they do not work the very same variety of hours each week or they are paid on a basis aside from time. For these employees, the “routine incomes” for a “routine work week” is the average quantity of the regular earnings earned by the staff member in the weeks in which the worker worked throughout the duration of 12 weeks immediately preceding the date the notice was given.

A company is not allowed to set up a worker’s trip time during the statutory notification duration unless the employee-after getting written notice of termination of employment-agrees to take their holiday time during the notification period.

If a company provides longer notice than is needed, the statutory part of the notice period is the tail end of the period that ends on the date of termination.

How to supply written notice

In many cases, composed notice of termination of employment need to be addressed to the worker. It can be supplied in individual or by mail, fax or e-mail, as long as shipment can be verified.

There are special guidelines for providing notice of termination if an employee has an agreement of work or a collective agreement that supplies seniority rights that allow a worker who is to be laid off or whose work is to be terminated to displace (” bump”) other staff members.

Because case, the employer should post a notification in the work environment (where it will be seen by the staff members) setting out the names, seniority and job classification of those workers the company plans to end and the date of the proposed termination. The publishing of the notice is considered to be notification of termination, since the date of the posting, to a worker who is “bumped” by an employee named in the notice. However, this notification of termination should still fulfill the length requirements set out in the ESA.

There are also unique guidelines concerning how notice is offered when there is a mass termination.

Termination pay

An employee who does not receive the composed notification needed under the ESA must be provided termination pay in lieu of notice. Termination pay is a lump amount payment equal to the routine earnings for a routine work week that an employee would otherwise have been entitled to during the written notification duration. An employee earns getaway pay on their termination pay. Employers must likewise continue to make whatever contributions would be needed to preserve the benefits the worker would have been entitled to had they continued to be employed through the notification duration.

Example: Regular work week

Sarah has actually worked for three and a half years. Now her task has been removed and her employment has been terminated. Sarah was not provided any composed notification of termination.

Sarah worked 40 hours a week weekly and was paid $20.00 an hour. She likewise received 4 percent getaway pay. Because she worked for more than 3 years however less than 4 years, she is entitled to 3 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 computed:

$ 800.00 X 3 weeks = $2,400.00

Then her holiday pay on her termination pay is determined:

4% of $2,400.00 = $96.00

Finally, her trip 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 also guarantee ongoing protection for any advantage or pension plans that used to her for employment 3 weeks.

Example: No regular work week

Gerry has operated at a retirement home for 4 years. He works each week, 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 2 of the 12 weeks instantly preceding the day his employment was terminated. Gerry made $1,800.00 in the 12 weeks before the day on which his work ended.

Gerry is entitled to 4 weeks of termination pay.

Gerry’s average incomes weekly are computed:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for 2 weeks for that reason these weeks are not consisted of in the computation of typical earnings) = $180.00 a week

His termination pay is determined:

$ 180.00 × 4 weeks = $720.00

Then his vacation pay on his termination pay is determined:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company needs to also make sure continued coverage for employment any advantage or pension plans that applied to him for 4 weeks.

When to pay termination pay

Termination pay must be paid to a worker either seven days after the employee’s employment is ended or on the worker’s next routine pay date, whichever is later on.

Mass termination

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

Meaning of “facility”

An “establishment” is an area at which the company continues service. Separate areas can be considered one facility if either:

– they lie within the exact same municipality, or

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

Effective October 26, 2023, in cases of mass termination, the term “establishment” includes an employee’s home, however just if the staff member works from home and does not operate at any other place where the employer carries on organization.

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

Note that where an employee performs work both from their home and from another location where the employer brings on company (for example, a workplace), their home is not included in the definition of “establishment”. Instead, the staff member is considered to have a connection to the office location and, employment therefore, for the function of mass termination, the worker is consisted of with respect to that office place.

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

ABC Company has a workplace and a warehouse located in London, ON. Sabrina resides in London and works for ABC Company solely remotely: she performs work for the business from home and does not operate at the workplace.

For employment the function of mass termination, the company’s London workplace, London warehouse and Sabrina’s London home are considered one “establishment.”

Employer responsibilities in a mass termination

When a mass termination occurs, the employer must complete and provide 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 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, 400 University Avenue, Toronto ON M7A 1T7.

Any notice to the affected staff members is not thought about to have actually been given until the Form 1 is gotten by the Director; simply put, notice of mass termination is ineffective till the Director receives the Form 1.

In addition to offering workers with private notifications of termination, the company must, on the very first day of the notice duration:

– post a copy of the Form 1 offered to the Director in the work environment where it will come to the attention of the impacted staff members.

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

The amount of notice employees need to get in a mass termination is not based on the workers’ length of work, but on the variety of staff members who have been ended. An employer should provide:

– 8 weeks see if the work of 50 to 199 employees is to be ended

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

– 16 weeks observe if the work of 500 or more employees is to be terminated

Exception to the mass termination guidelines

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

– the variety of staff members whose work is being terminated represents not more than 10 percent of the employees 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 employer’s organization at the facility

Mass termination: resignation by an employee

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

Temporary work after termination date in notification

A company can provide work to an employee who has been notified of termination on a short-term basis in the 13-week duration after the termination date set out in the notice without affecting the original date of the termination and without being required to provide any additional notice of termination to the staff member when the short-term work ends.

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

Recall rights

A “recall right” is the right of a worker on a layoff to be recalled to work by their employer under a term or condition of work. This right is typically found 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 pick to:

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

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

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

If an employee who is not represented by a trade union elects to keep their recall rights or stops working to make an option, 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 an employee who is represented by a trade union elects to keep their recall rights or stops working to choose, 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 advises the employer and the Director of Employment Standards in composing that efforts have actually failed, the employer needs to send out the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the money in trust.

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

If the staff member accepts a recall back to work, the cash that is held in trust will be returned to the employer.

Exemptions to notice of termination or termination pay

A lot of these exemptions are complex. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you require more information. Please likewise refer to the special rule tool.

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

– is guilty of wilful misconduct, disobedience or wilful overlook of duty that is not trivial and has not been condoned by the employer. Note: “wilful” consists of when a staff member meant the resulting repercussion or acted recklessly if they understood or must have understood the impacts their conduct would have. Poor work conduct that is unexpected or unintended is generally ruled out wilful;

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

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

– the work continues for 3 months or more after the term expires or the job is completed;

See also: 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 work are minimum requirements. Some workers may have rights under the typical law that are higher than the rights to notice of termination (or termination pay) and severance pay under the ESA. An employee may want to sue their former company in court for “wrongful termination”. Employees should understand that they can not sue an employer for wrongful dismissal and sue for termination pay or discontinuance wage with the ministry for the same termination or severance of work. An employee needs to choose one or the other. Employees may wish to acquire legal suggestions worrying their rights.