Termination Of Employment

A number of expressions are typically utilized to describe situations when work is terminated. These consist of “release,” “discharged,” “dismissed,” “fired” and “completely laid off.”

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

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

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

– lays a staff member off for a period that is longer than a “momentary layoff”.

For the most part, when a company ends the work of a worker who has been continuously utilized for 3 months, the company must provide the staff member with either composed notice of termination, termination pay or a mix (as long as the notification and the number of weeks of termination pay together equivalent the length of notification the employee is entitled to get).

The ESA does not need an employer to give a worker a reason that their work is being terminated. There are, however, some circumstances where an employer can not terminate a worker’s employment even if the employer is prepared to give correct written notice or termination pay. For instance, a company can not end someone’s work, or punish them in any other method, if any part of the factor for the termination of employment is based on the worker asking concerns about the ESA or exercising a right under the ESA, such as refusing to work in excess of the day-to-day or weekly hours of work optimums, or taking a leave of absence defined in the ESA. Please see the chapter on reprisals.

Receiving termination notification or pay in lieu

Certain staff members are not entitled to discover of termination or termination pay under the ESA. Examples consist of: workers who are guilty of wilful misconduct, disobedience, or wilful overlook of responsibility that is not unimportant and has not been condoned by the company. Other examples include construction workers, employees on short-lived layoff, employees who decline a deal of sensible alternative work and workers who have been employed 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 likewise refer to the special guideline tool.

The termination-of-employment guidelines are entirely different from any entitlements a worker might have to be paid discontinuance wage under the ESA.

Constructive termination

A useful termination might happen when an employer makes a substantial modification to a basic term or condition of a worker’s employment without the worker’s real or implied approval.

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

The worker would have to resign in reaction to the modification within a reasonable period of time in order for the company’s actions to be considered a termination of work for functions of the ESA.

Constructive termination is a complex and difficult topic. For more details on useful termination, please call the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

An employee is on momentary layoff when a company cuts down or stops the worker’s work without ending their work (for example, laying someone off at times when there is not enough work to do). The mere truth that the employer does not define a recall date when laying the employee off does not necessarily indicate that the lay-off is not short-term. Note, however, that a lay-off, even if meant to be temporary, may lead to useful dismissal if it is not permitted by the work agreement.

For the functions of the termination provisions of the ESA, a “week of layoff” is a week in which the worker earned less than half of what they would generally earn (or makes on average) in a week.

A week of layoff does not include any week in which the worker did not work for one or more days since the staff member was not able or offered to work, went through disciplinary suspension, or was not provided with work because of a strike or lockout at their location of employment or in other places.

Employers are not required under the ESA to offer staff members with a written notice of a temporary layoff, nor do they need to provide a factor for the lay-off. (They may, nevertheless, be needed to do these things under a collective agreement 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 successive weeks, but less than 35 weeks of layoff in any duration of 52 consecutive weeks, where:- the staff member continues to get significant payments from the company;
or

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

– the staff member receives supplementary welfare;
or

– the worker would be entitled to receive supplemental welfare but isn’t getting them because they are used elsewhere;
or

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

– the company recalls the worker 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 explained in ‘B’ where the employer remembers a worker who is represented by a trade union within the time set out in an agreement 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 ended the employee’s employment. Generally, the staff member will then be entitled to termination pay.

Written notification of termination and termination pay

Under the ESA, an employer can terminate the employment of a staff member who has actually been utilized continuously for 3 months or more if either:

– the employer has actually offered the worker proper written notification of termination and the notification duration has expired

– the employer pays termination pay to the employee where no written notice or less notification than is needed is provided

Written notification of termination

A worker is entitled to notice of termination (or termination pay rather of notification) if they have been constantly used for at least three months. A person is considered “employed” not just while they are actively working, however also throughout whenever in which they are not working however the employment relationship still exists (for instance, time in which the employee is off ill or on leave or on lay-off).

The amount of notice to which a staff member is entitled depends upon their “duration of work”. A staff member’s period of employment includes not just all time while the worker is actively working but also 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 staff member’s employment is deemed (or thought about) 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 employee’s period of work, even though the worker might still be used for purposes of the “constantly used for 3 months” credentials

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

It is possible, in some situations, for a person to have actually been “continually utilized” for 3 months or more and yet have a period of work of less than three months. In such scenarios, the employee would be entitled to discover due to the fact that an employee who has been continually used for a minimum of 3 months is entitled to observe, and the minimum notification privilege of one week applies to an employee with a period of work of any length less than one year.

The following chart specifies the quantity of notice needed:

Note: Special guidelines determine the quantity of notification needed when it comes to mass terminations – where the work of 50 or more workers is ended at an employer’s establishment within a four-week duration.

Requirements during the statutory notice period

During the statutory notification duration, a company must:

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

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

– pay the employee the incomes they are entitled to, which can not be less than the employee’s routine salaries 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 employee’s work week.

Regular earnings

These are wages besides overtime pay, getaway pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and discontinuance wage and specific legal entitlements.

Regular work week

For a worker who generally works the very same number of hours every week, a routine work week is a week of that numerous hours, not consisting of overtime hours.

Some employees do not have a routine work week. That is, they do not work the exact same variety of hours every week or they are paid on a basis other than time. For these employees, the “regular earnings” for a “routine work week” is the typical quantity of the routine incomes earned by the staff member in the weeks in which the employee worked throughout the duration of 12 weeks right away preceding the date the notification was offered.

A company is not permitted to schedule a staff member’s getaway time throughout the statutory notification duration unless the employee-after receiving written notification of termination of employment-agrees to take their vacation time during the notification period.

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

How to provide written notification

In many cases, written notice of termination of employment should be dealt with to the staff member. It can be offered face to face or employment by mail, fax or email, as long as delivery can be verified.

There are special rules for supplying notice of termination if an employee has a contract of work or a collective agreement that offers seniority rights that permit a staff member who is to be laid off or employment whose work is to be terminated to displace (” bump”) other employees.

In that case, the employer needs to publish a notice in the workplace (where it will be seen by the employees) setting out the names, seniority and job classification of those staff members the employer means to end and the date of the proposed termination. The publishing of the notice is thought about to be notification of termination, as of the date of the posting, to a worker who is “bumped” by an employee named in the notification. However, this notification of termination need to still meet the length requirements set out in the ESA.

There are also special guidelines regarding how notification is supplied when there is a mass termination.

Termination pay

An employee who does not get the composed notice required under the ESA must be provided termination pay in lieu of notice. Termination pay is a swelling amount payment equal to the regular incomes for a routine work week that a staff member would otherwise have actually been entitled to throughout the composed notification duration. A worker makes getaway pay on their termination pay. Employers should also continue to make whatever contributions would be needed to maintain the benefits the employee would have been entitled to had they continued to be employed through the notice duration.

Example: Regular work week

Sarah has actually worked for 3 and a half years. Now her task has actually been gotten rid of and her employment has actually been ended. 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 4 percent trip pay. Because she worked for more than 3 years but less than four years, she is entitled to 3 weeks’ pay in lieu of notice.

Sarah’s regular incomes for a routine work week are determined:

$ 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 vacation pay on her termination pay is computed:

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 company needs to likewise ensure ongoing protection for any advantage or pension plans that applied to her for 3 weeks.

Example: No routine work week

Gerry has actually operated at a nursing home for 4 years. He works each week, however his hours vary from week to week. His rate of pay is $25.00 an hour, and he is paid 6 per cent vacation pay.

Gerry’s company removed his position and did not give Gerry any composed 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 typical profits per week are calculated:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for 2 weeks for that reason these weeks are not included in the calculation of average revenues) = $180.00 a week

His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00

Then his getaway pay on his termination pay is calculated:

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 employer should likewise make sure ongoing protection for any benefit or pension strategies that applied to him for four weeks.

When to pay termination pay

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

Mass termination

Special rules for notice of termination may use in cases of mass termination (when an employer is ending 50 or employment more employees at its establishment within a four-week period).

Meaning of “establishment”

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

– they are situated within the exact same town, or

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

Effective October 26, 2023, in cases of mass termination, the term “establishment” consists of a worker’s home, employment however only if the employee works from home and does not operate at any other area where the employer brings on business.

This will require that workers who work solely from another location be considered for addition in the count when determining whether 50 or more employees have actually been ended.

Note that where a worker carries out work both from their home and from another place where the employer continues organization (for example, an office), their home is not consisted of in the definition of “establishment”. Instead, the worker is considered to have a connection to the workplace area and, for employment that reason, for the purpose of mass termination, the worker is included with respect to that office location.

Example: where several areas 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 solely remotely: she carries out work for the business from home and does not work at the workplace.

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

Employer commitments in a mass termination

When a mass termination occurs, the employer must complete and provide the Form 1 (Notice of termination of work) to the Director of Employment Standards (Director) by:

– e-mail to esa_form1_notice@ontario.ca.

– fax to (416) 326-7061.

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

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

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

Any notification to the impacted staff members is not thought about to have actually been offered until the Form 1 is received by the Director; simply put, notification of mass termination is not reliable till the Director receives the Form 1.

In addition to supplying workers with private notifications of termination, the employer must, on the very first day of the notice period:

– post a copy of the Form 1 offered to the Director in the office where it will pertain to the attention of the impacted employees.

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

The quantity of notification staff members need to receive in a mass termination is not based upon the staff members’ length of work, but on the variety of staff members who have actually been ended. An employer must provide:

– 8 weeks see if the work of 50 to 199 staff members is to be terminated

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

– 16 weeks discover if the employment of 500 or more employees is to be terminated

Exception to the mass termination guidelines

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

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

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

Mass termination: resignation by a worker

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

Temporary work after termination date in notification

A company can offer work to a staff member who has been offered notice of termination on a temporary 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 offer any further notification of termination to the employee when the temporary work ends.

If a staff member 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 notice of termination as if the previous notification had actually never ever been offered. The worker’s period of employment will then also include the period of short-term work.

Recall rights

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

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

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

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

If a worker who is not represented by a trade union elects to keep their recall rights or stops working to decide, the employer needs to send the amount of the termination pay (and discontinuance wage, 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 try to come to an arrangement to hold the termination pay (and severance pay, if any) in trust for the worker. If they can not come to an arrangement, and the trade union recommends the company and the Director of Employment Standards in writing that efforts have stopped working, the employer must send 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 quit their recall rights or if the recall rights end, the cash that is held in trust must be sent to the worker.

If the staff member accepts a recall back to work, the cash that is kept in trust will be gone back to the company.

Exemptions to notice of termination or termination pay

Many of these exemptions are complicated. Please call the Employment Standards Information Centre, 1-800-531-5551, if you require more information. 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, employment disobedience or wilful overlook of responsibility that is not minor and has actually not been excused by the company. Note: “wilful” includes when a staff member meant the resulting consequence or acted recklessly if they understood or must have known the effects their conduct would have. Poor work conduct that is unintentional or unintentional is normally not thought about wilful;

– was employed for a particular length of time or up until the conclusion of a particular job. However, such an employee will be entitled to notice of termination or termination pay if:- the employment ends before the term expires or the task is finished; or

– the term expires or the task is not finished more than 12 months after the employment started; or

– the employment continues for 3 months or more after the term ends 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 guidelines under the ESA about termination and severance of work are minimum requirements. Some employees might have rights under the common law that are higher than the rights to discover of termination (or termination pay) and severance pay under the ESA. An employee may wish to sue their former company in court for “wrongful termination”. Employees must be conscious that they can not sue an employer for wrongful termination and submit a claim for termination pay or discontinuance wage with the ministry for the same termination or severance of work. An employee should pick one or the other. might wish to get legal guidance concerning their rights.