Termination Of Employment

A variety of expressions are typically utilized to describe scenarios when employment is ended. These consist of “let go,” “discharged,” “dismissed,” “fired” and “permanently laid off.”

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

– dismisses or stops employing an employee, consisting of where an employee is no longer employed due to the insolvency or insolvency of the employer;

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

– lays an employee 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 used for three months, the employer needs to offer the staff member 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 equivalent the length of notice the worker is entitled to receive).

The ESA does not need an employer to provide an employee a reason why their employment is being terminated. There are, employment however, some scenarios where an employer can not end a worker’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 work, or punish them in any other method, if any part of the reason for the termination of employment is based on the staff member asking questions about the ESA or working out a right under the ESA, such as refusing to work in excess of the daily or weekly hours of work optimums, or taking a leave of absence specified in the ESA. Please see the chapter on reprisals.

Qualifying for 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 disregard of responsibility that is not trivial and has actually not been excused by the company. Other examples include building employees, employees on temporary layoff, staff members who decline an offer of sensible alternative employment and workers who have been utilized less than 3 months.

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

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

Constructive termination

A constructive termination may take place when an employer makes a significant modification to a basic term or condition of an employee’s employment without the worker’s actual or implied consent.

For example, a worker may be constructively dismissed if the company makes modifications to the worker’s terms and conditions of work that lead to a substantial decrease in wage or a substantial negative modification in such things as the employee’s work place, hours of work, authority, or position. Constructive dismissal may likewise consist of situations where an employer bugs or abuses a worker, or an employer offers a staff member a warning to “stop or be fired” and the staff member resigns in reaction.

The staff member would have to resign in action to the change within a reasonable time period in order for the employer’s actions to be thought about a termination of work for functions of the ESA.

Constructive termination is a complex and challenging subject. For more information on positive dismissal, please call the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A worker is on momentary layoff when an employer cuts back or stops the staff member’s work without ending their employment (for example, laying someone off at times when there is inadequate work to do). The mere truth that the company does not define a recall date when laying the employee off does not always suggest that the lay-off is not momentary. Note, nevertheless, that a lay-off, even if planned to be momentary, may 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 staff member made less than half of what they would generally make (or earns usually) in a week.

A week of layoff does not consist of any week in which the worker did not work for several days since the employee was not able or readily available to work, was subject to disciplinary suspension, or was not offered with work due to the fact that of a strike or lockout at their location of employment or in other places.

Employers are not needed under the ESA to offer workers with a written notice of a temporary layoff, nor do they need to offer a reason for employment the lay-off. (They may, nevertheless, be needed to do these things under a collective 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 consecutive weeks;
or

2. more than 13 weeks in any duration of 20 consecutive weeks, but less than 35 weeks of layoff in any duration of 52 successive weeks, where:- the employee continues to receive substantial payments from the employer;
or

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

– the employee receives additional welfare;
or

– the employee would be entitled to get additional welfare but isn’t receiving them since they are utilized somewhere else;
or

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

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

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

If an employee is laid off for a period longer than a short-term layoff as set out above, the company is considered to have actually ended the employee’s work. Generally, the employee will then be entitled to termination pay.

Written notice of termination and termination pay

Under the ESA, a company can end the employment of an employee who has been used constantly for three months or more if either:

– the employer has actually offered the employee appropriate composed notification of termination and the notice duration has actually ended

– the company pays termination pay to the employee where no written notification or less notice than is required is offered

Written notice of termination

A staff member is entitled to discover of termination (or termination pay instead of notice) if they have actually been continuously employed for at least 3 months. A person is thought about “employed” not just while they are actively working, but likewise throughout any time in which they are not working however the work relationship still exists (for example, time in which the worker is off sick or on leave or on lay-off).

The amount of notice to which an employee is entitled depends on their “period of work”. An employee’s duration of work includes not only all time while the worker is actively working however likewise at any time 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-lived lay-off, the worker’s work is considered (or considered) 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 employment, even though the staff member might still be utilized for functions of the “constantly utilized for 3 months” credentials

– if 2 different periods of employment are separated by more than 13 weeks, just the most current duration counts for purposes of notice of termination

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

The following chart specifies the amount of notification required:

Note: Special rules determine the amount of notification required in the case of mass terminations – where the work of 50 or more employees is terminated at an employer’s establishment within a four-week period.

Requirements during the statutory notice duration

During the statutory notice duration, an employer must:

– not reduce the employee’s wage rate or modify any other term or condition of work;

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

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

Regular rate

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

Regular salaries

These are earnings besides overtime pay, holiday pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and discontinuance wage and certain legal entitlements.

Regular work week

For an employee who normally works the exact same number of hours every week, a regular work week is a week of that numerous hours, not consisting of overtime hours.

Some staff members do not have a routine work week. That is, they do not work the same variety of hours every week or they are paid on a basis besides time. For these staff members, the “regular salaries” for a “routine work week” is the typical quantity of the regular earnings earned by the employee in the weeks in which the worker worked throughout the duration of 12 weeks immediately preceding the date the notice was provided.

An employer is not enabled to schedule a worker’s holiday time during the statutory notification duration unless the employee-after getting composed notification of termination of employment-agrees to take their holiday time throughout the notification period.

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

How to offer written notice

For the most part, written notification of termination of work must be addressed to the staff member. It can be provided personally or by mail, fax or e-mail, as long as shipment can be validated.

There are special rules for supplying notice of termination if a staff member has a contract of employment or a collective arrangement that provides seniority rights that allow a staff member who is to be laid off or whose work is to be terminated to displace (” bump”) other staff members.

Because case, the company must 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 employer intends to terminate and the date of the proposed termination. The publishing of the notification is thought about to be notice of termination, since the date of the publishing, to a staff member who is “bumped” by a worker named in the notice. However, this notice of termination need to still satisfy the length requirements set out in the ESA.

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

Termination pay

A worker who does not get the composed notice required under the ESA should be offered termination pay in lieu of notification. Termination pay is a swelling amount payment equivalent to the regular salaries for a regular work week that a staff member would otherwise have been entitled to during the composed notice duration. A staff member earns trip pay on their termination pay. Employers need to also continue to make whatever contributions would be required to maintain 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 worked for three and a half years. Now her task has actually been gotten rid of and her employment has been terminated. Sarah was not offered any composed notification of termination.

Sarah worked 40 hours a week every week and was paid $20.00 an hour. She likewise got four per cent vacation pay. Because she worked for more than three years however less than 4 years, she is entitled to 3 weeks’ pay in lieu of notification.

Sarah’s regular earnings for a regular work week are calculated:

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

Her termination pay is calculated:

$ 800.00 X 3 weeks = $2,400.00

Then her holiday pay on her termination pay is calculated:

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: employment Sarah is entitled to $2,496.00. The company must likewise guarantee ongoing protection for any benefit or pension strategies that used to her for three weeks.

Example: No regular work week

Gerry has actually worked 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 trip pay.

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

Gerry is entitled to 4 weeks of termination pay.

Gerry’s average profits 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 computation of typical 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 calculated:

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 company needs to likewise make sure ongoing protection for any advantage or pension plans that used to him for 4 weeks.

When to pay termination pay

Termination pay must be paid to a staff member either 7 days after the staff member’s work is ended or on the staff member’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 a company is terminating 50 or more employees at its establishment within a four-week period).

Meaning of “facility”

An “facility” is an area at which the company carries on service. Separate areas can be thought about one facility if either:

– they are situated within the very same town, or

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

Effective October 26, 2023, in cases of mass termination, the term “establishment” consists of a staff member’s home, however only if the worker works from home and does not work at any other location where the company continues company.

This will need that employees who work exclusively remotely be thought about for inclusion in the count when figuring out whether 50 or more staff members have been terminated.

Note that where a worker carries out work both from their home and from another area where the company brings on organization (for instance, a workplace), their home is not included in the meaning of “facility”. Instead, the worker is considered to have a connection to the workplace location and, for that reason, for the purpose of mass termination, the worker is consisted of with regard to that office place.

Example: where numerous locations are considered one “establishment”

ABC Company has a workplace and a warehouse situated in London, ON. Sabrina resides in London and works for ABC Company specifically remotely: she carries out work for the company from home and does not operate at the office.

For the purpose of mass termination, the business’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 happens, the company should finish 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.

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

– mail shipment to the Director’s office, employment if the delivery can be validated.

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

Any notification to the impacted employees is ruled out to have actually been offered till the Form 1 is gotten by the Director; simply put, notification of mass termination is ineffective till the Director receives the Form 1.

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

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

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

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

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

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

– 16 weeks notice if the employment of 500 or more workers is to be ended

Exception to the mass termination guidelines

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

– the number of employees whose employment is being ended represents not more than 10 percent of the workers who have actually been employed for at least three months at the establishment

– none of the terminations are caused by the permanent discontinuance of all or employment part of the company’s organization at the facility

Mass termination: resignation by a worker

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

Temporary work after termination date in notification

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

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

Recall rights

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

A worker who has recall rights and who is entitled to termination pay since of a layoff of 35 weeks or more may 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

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

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

If an employee who is not represented by a trade union chooses to keep their recall rights or stops working to make an option, the employer should send out the quantity of the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.

If a worker who is represented by a trade union elects to keep their recall rights or fails to make an option, the employer and the trade union need to attempt to come to an arrangement to hold the termination pay (and discontinuance wage, if any) in trust for the staff member. If they can not come to an arrangement, and the trade union encourages the employer and the Director of Employment Standards in writing that efforts have actually stopped working, the employer 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 staff member picks to quit their recall rights or if the recall rights end, the cash that is held in trust needs to be sent to the worker.

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

Exemptions to discover of termination or termination pay

A number of these exemptions are complex. Please call the Employment Standards Information Centre, 1-800-531-5551, if you require more info. Please also describe the unique rule tool.

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

– is guilty of wilful misconduct, disobedience or wilful neglect of duty that is not insignificant and has actually not been condoned by the company. Note: “wilful” consists of when a staff member planned the resulting consequence or acted recklessly if they understood or should have known the results their conduct would have. Poor work conduct that is accidental or employment unintended is typically not thought about wilful;

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

– the term expires or the job is not completed more than 12 months after the employment started; or

– the employment continues for three months or more after the term ends or the job is completed;

See likewise: Employment Standards Self-Service Tool

Wrongful termination

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

The guidelines under the ESA about termination and severance of employment are minimum requirements. Some workers might have rights under the that are higher than the rights to discover of termination (or termination pay) and severance pay under the ESA. A worker may want to sue their previous employer in court for “wrongful termination”. Employees ought to understand that they can not sue an employer for wrongful dismissal and file a claim for termination pay or discontinuance wage with the ministry for the exact same termination or severance of work. An employee needs to select one or the other. Employees may want to get legal suggestions worrying their rights.