Termination Of Employment

A number of expressions are commonly used to explain situations when work is ended. These include “release,” “discharged,” “dismissed,” “fired” and “permanently laid off.”

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

– dismisses or stops using an employee, including where a worker is no longer employed due to the bankruptcy or insolvency of the company;

– “constructively” dismisses an employee and the staff member resigns, in action, within a sensible time;

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

For the most part, when a company ends the employment of a worker who has been continually employed for 3 months, the company must offer the employee with either composed notice 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 staff member is entitled to receive).

The ESA does not need a company to provide a worker a reason that their employment is being terminated. There are, nevertheless, some scenarios where a company can not end an employee’s work even if the company is prepared to offer proper written notification or termination pay. For example, a company can not end somebody’s employment, or penalize them in any other way, if any part of the reason for the termination of employment is based on the employee asking concerns about the ESA or exercising 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 absence 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 notice of termination or termination pay under the ESA. Examples include: staff members who are guilty of wilful misbehavior, disobedience, or wilful neglect of responsibility that is not unimportant and has actually not been excused by the employer. Other examples consist of building staff members, workers on short-term layoff, employees who decline an offer of reasonable alternative work and employees who have been utilized less than three months.

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

The termination-of-employment rules are completely separate from any privileges a worker might have to be paid severance pay under the ESA.

Constructive dismissal

A constructive dismissal may happen when a company makes a substantial change to a fundamental term or condition of a worker’s work without the employee’s real or implied permission.

For example, a worker may be constructively dismissed if the company makes modifications to the employee’s conditions of work that result in a substantial decrease in income or a considerable negative change in such things as the staff member’s work place, hours of work, authority, or position. Constructive dismissal might likewise include circumstances where an employer pesters or abuses a staff member, or a company offers a staff member a warning to “stop or be fired” and the employee resigns in response.

The worker would have to resign in response to the modification within an affordable amount of time 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 challenging subject. For more details on positive termination, please contact the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

An employee is on temporary layoff when an employer cuts down or stops the employee’s work without ending their employment (for instance, laying someone off sometimes when there is insufficient work to do). The mere truth that the company does not define a recall date when laying the employee off does not necessarily suggest that the lay-off is not . Note, however, that a lay-off, even if meant to be short-term, may result in positive dismissal if it is not allowed by the employment contract.

For the purposes of the termination provisions of the ESA, a “week of layoff” is a week in which the worker made less than half of what they would ordinarily make (or earns typically) in a week.

A week of layoff does not include any week in which the employee did not work for several days because the employee was unable or readily available to work, underwent disciplinary suspension, or was not offered with work due to the fact that of a strike or lockout at their place of work or elsewhere.

Employers are not required under the ESA to supply staff members with a written notification of a short-term layoff, nor do they have to provide a factor for the lay-off. (They may, nevertheless, be needed to do these things under a collective arrangement or an employment agreement.)

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 consecutive weeks, but less than 35 weeks of layoff in any period of 52 successive weeks, where:- the staff member continues to receive significant payments from the employer;
or

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

– the staff member gets extra joblessness benefits;
or

– the staff member would be entitled to receive additional unemployment advantages however isn’t getting them due to the fact that they are used elsewhere;
or

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

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

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

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

Written notification of termination and termination pay

Under the ESA, a company can terminate the work of a staff member who has actually been employed continually for three months or more if either:

– the employer has actually provided the worker correct written notification of termination and the notice duration has expired

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

Written notice of termination

An employee is entitled to discover of termination (or termination pay rather of notification) if they have actually been continuously utilized for at least 3 months. A person is considered “utilized” not only while they are actively working, however also throughout at any time in which they are not working however the work relationship still exists (for example, time in which the employee is off sick or on leave or on lay-off).

The quantity of notice to which a staff member is entitled depends upon their “period of work”. A staff member’s duration of work consists of not just all time while the employee is actively working but likewise whenever that they are not working however the employment relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a short-lived lay-off, the employee’s employment is deemed (or considered) to have actually been terminated on the very first day of the lay-off-any time after that does not count as part of the worker’s period of work, even though the staff member may still be utilized for purposes of the “continually used for three months” qualification

– 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 circumstances, for a person to have been “continually used” for three months or more and yet have a period of employment of less than 3 months. In such scenarios, the employee would be entitled to discover because an employee who has been continuously used for a minimum of 3 months is entitled to observe, and the minimum notification privilege of one week uses to an employee with a duration of employment of any length less than one year.

The following chart specifies the quantity of notification needed:

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

Requirements throughout the statutory notice period

During the statutory notice duration, an employer should:

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

– continue to make whatever contributions would be required to keep the employee’s benefits strategies; and

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

Regular rate

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

Regular earnings

These are incomes besides overtime pay, getaway pay, public vacation 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 worker who typically works the very same number of hours weekly, a regular work week is a week of that many hours, not consisting of overtime hours.

Some staff members do not have a regular work week. That is, they do not work the exact same number of hours weekly or they are paid on a basis aside from time. For these employees, the “regular incomes” for a “routine work week” is the average amount of the routine wages made by the worker in the weeks in which the worker worked during the period of 12 weeks instantly preceding the date the notification was provided.

An employer is not permitted to arrange a worker’s trip time throughout the statutory notification duration unless the employee-after getting written notification of termination of employment-agrees to take their getaway time throughout the notice duration.

If an employer supplies longer notification than is required, the statutory part of the notice duration 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 must be resolved to the employee. It can be offered in person or by mail, fax or email, as long as shipment can be verified.

There are special rules for offering notice of termination if an employee has an agreement of employment or a collective agreement that provides seniority rights that enable an employee who is to be laid off or whose work is to be terminated to displace (” bump”) other workers.

Because case, the company should post a notice in the work environment (where it will be seen by the workers) setting out the names, seniority and job category of those workers the employer plans to terminate and the date of the proposed termination. The publishing of the notification is thought about to be notification of termination, since the date of the publishing, to an employee who is “bumped” by an employee named in the notice. However, employment this notice of termination should still meet the length requirements set out in the ESA.

There are likewise unique rules regarding how notification is provided when there is a mass termination.

Termination pay

A worker who does not get the composed notice required under the ESA needs to be given termination pay in lieu of notice. Termination pay is a swelling amount payment equivalent to the routine salaries for a routine work week that an employee would otherwise have actually been entitled to during the composed notification period. A staff member earns vacation pay on their termination pay. Employers must likewise continue to make whatever contributions would be needed to keep the benefits the employee would have been entitled to had they continued to be employed through the notification period.

Example: Regular work week

Sarah has worked for three and a half years. Now her task has actually been removed and her work has actually been terminated. Sarah was not given any written notice of termination.

Sarah worked 40 hours a week weekly and was paid $20.00 an hour. She also received 4 per cent trip pay. Because she worked for more than 3 years but less than 4 years, she is entitled to three weeks’ pay in lieu of notice.

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 trip pay on her termination pay is computed:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The employer should likewise guarantee ongoing coverage for any advantage or pension that used to her for 3 weeks.

Example: No routine work week

Gerry has worked at a nursing home for four years. He works each week, 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 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 earnings per week are determined:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for two weeks therefore these weeks are not consisted of in the calculation of typical profits) = $180.00 a week

His termination pay is computed:

$ 180.00 × 4 weeks = $720.00

Then his getaway pay on his termination pay is calculated:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer must also make sure continued coverage for any advantage or pension plans that applied to him for four weeks.

When to pay termination pay

Termination pay should be paid to an employee either 7 days after the staff member’s employment is ended or on the staff member’s next regular pay date, whichever is later on.

Mass termination

Special guidelines for notice of termination may use in cases of mass termination (when a company is terminating 50 or more workers at its establishment within a four-week period).

Meaning of “establishment”

An “establishment” is a location at which the employer continues business. Separate places can be thought about one facility if either:

– they are located within the very same municipality, or

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

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

This will need that staff members who work solely remotely be considered for addition in the count when determining whether 50 or more workers have actually been terminated.

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

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

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

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

Employer commitments in a mass termination

When a mass termination occurs, the employer should finish and deliver the Form 1 (Notice of termination of employment) to the Director employment of Employment Standards (Director) by:

– e-mail to esa_form1_notice@ontario.ca.

– fax to (416) 326-7061.

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

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

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

Any notification to the affected staff members is not thought about to have actually been given until the Form 1 is received by the Director; in other words, notification of mass termination is ineffective till the Director gets the Form 1.

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

– publish a copy of the Form 1 offered to the Director in the office where it will pertain to the attention of the impacted staff members.

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

The amount of notice workers should get in a mass termination is not based upon the employees’ length of work, but on the variety of staff members who have actually been ended. A company must offer:

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

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

– 16 weeks notice if the work of 500 or more staff members is to be ended

Exception to the mass termination rules

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

– the variety of staff members whose work is being terminated represents not more than 10 per cent of the employees who have actually been employed for a minimum of 3 months at the establishment

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

Mass termination: resignation by a staff member

A worker who has actually gotten termination notification under the mass termination guidelines who wants to resign before the termination date provided in the employer’s notification should provide the company a minimum of one week’s composed notification of resignation if the staff member has actually been employed for less than 2 years. If the work period has actually been 2 years or more, the staff member must provide at least 2 weeks’ composed notice of resignation. However, the employee does not need to offer notification of resignation if the company constructively dismisses the worker or breaches a regard to the contract.

Temporary work after termination date in notice

An employer can offer work to a staff member who has actually been notified of termination on a momentary basis in the 13-week period after the termination date set out in the notification without impacting the initial date of the termination and without being needed to supply any more notice of termination to the worker when the short-term work ends.

If a staff member 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 composed notification of termination as if the previous notification had never ever been offered. The employee’s duration of employment will then likewise consist of the duration of short-lived work.

Recall rights

A “recall right” is the right of an employee on a layoff to be called back to work by their company under a term or condition of employment. This right is commonly discovered in cumulative agreements.

An employee who has recall rights and who is entitled to termination pay due to the fact that of a layoff of 35 weeks or more may select 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 receive termination pay (and discontinuance wage, if they were entitled to discontinuance wage).

If a staff member is entitled to both termination pay and discontinuance wage, they need to make the same option for both.

If a worker who is not represented by a trade union elects to keep their recall rights or fails to make an option, the employer should send out the amount 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 chooses to keep their recall rights or fails to choose, the employer and the trade union must attempt to come to a plan to hold the termination pay (and discontinuance wage, if any) in trust for the staff member. If they can not come to a plan, and the trade union advises the employer and the Director of Employment Standards in writing that efforts have failed, the employer needs to send out the termination pay (and severance pay, if any) to the Director of Employment Standards, employment who holds the cash in trust.

If a worker picks to quit their recall rights or if the recall rights end, the money that is kept in trust must be sent to the employee.

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

Exemptions to discover of termination or termination pay

Many of these exemptions are complex. Please call the Employment Standards Information Centre, 1-800-531-5551, if you need more details. Please likewise refer to the unique rule tool.

The notification of termination and termination pay requirements of the ESA do not apply to an employee who:

– is guilty of wilful misconduct, disobedience or employment wilful disregard of task that is not unimportant and has not been excused by the company. Note: “wilful” includes when a staff member meant the resulting repercussion or acted recklessly if they knew or should have known the effects their conduct would have. Poor work conduct that is unintentional or unintended is generally ruled out wilful;

– was worked with for a specific length of time or up until the completion of a particular job. However, such an employee 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 expires or the job is not completed more than 12 months after the employment started; or

– the work 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 higher than ESA notification of termination, termination pay, severance pay

The guidelines under the ESA about termination and severance of work are minimum requirements. Some staff members might have rights under the typical law that are greater than the rights to see of termination (or termination pay) and discontinuance wage under the ESA. An employee might wish to sue their previous company in court for “wrongful termination”. Employees need to know that they can not take legal action against an employer for wrongful termination and submit a claim for termination pay or discontinuance wage with the ministry for the exact same termination or severance of work. A staff member should pick one or the other. Employees may want to get legal recommendations worrying their rights.