Termination Of Employment

A number of expressions are frequently utilized to explain circumstances when work is terminated. These consist of “release,” “released,” “dismissed,” “fired” and “completely laid off.”

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

– dismisses or stops employing a staff member, including where a worker is no longer used due to the bankruptcy or employment insolvency of the employer;

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

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

Most of the times, when an employer ends the work of an employee who has been continually employed for 3 months, the company should offer the employee with either composed notice of termination, termination pay or a combination (as long as the notification and the number of weeks of termination pay together equivalent the length of notification the staff member is entitled to get).

The ESA does not require a company to provide a worker a reason their employment is being ended. There are, employment nevertheless, some circumstances where an employer can not terminate a worker’s employment even if the employer is prepared to offer correct composed notification or termination pay. For instance, a company can not end someone’s employment, or punish them in any other method, if any part of the factor for the termination of employment is based upon the staff member asking concerns about the ESA or working out a right under the ESA, such as declining to work in excess of the everyday or weekly hours of work optimums, or taking a leave of absence specified in the ESA. Please see the chapter on reprisals.

Getting approved for termination notice 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 unimportant and has actually not been excused by the company. Other examples include building and construction workers, workers on temporary layoff, workers who decline an offer of reasonable alternative work and workers who have been utilized 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 describe the special rule tool.

The termination-of-employment rules are totally different from any privileges a staff member may have to be paid severance pay under the ESA.

Constructive termination

A useful dismissal might occur when a company makes a significant modification to a fundamental term or condition of a staff member’s employment without the staff member’s real or implied approval.

For instance, a worker may be constructively dismissed if the employer makes modifications to the worker’s terms of work that lead to a significant decrease in salary or a considerable unfavorable change in such things as the worker’s work area, hours of work, authority, or position. Constructive dismissal might also consist of scenarios where an employer pesters or abuses a worker, or an employer offers an employee a final notice to “quit or be fired” and the employee resigns in reaction.

The staff member would have to resign in reaction to the change within a sensible period of time in order for the employer’s actions to be considered a termination of work for functions of the ESA.

Constructive termination is a complex and tough subject. To learn more on useful dismissal, please get in touch with the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A worker is on short-lived layoff when a company cuts back or stops the employee’s work without ending their employment (for example, laying somebody off sometimes when there is not enough work to do). The simple truth that the company does not specify a recall date when laying the worker off does not always suggest that the lay-off is not short-term. Note, nevertheless, that a lay-off, even if intended to be short-lived, may lead to constructive dismissal if it is not permitted by the work contract.

For the functions of the termination arrangements of the ESA, employment a “week of layoff” is a week in which the staff member made less than half of what they would generally make (or makes typically) in a week.

A week of layoff does not include any week in which the employee did not work for several days due to the fact that the employee was not able or offered to work, was subject to disciplinary suspension, or was not supplied with work because of a strike or lockout at their location of work or somewhere else.

Employers are not required under the ESA to provide employees with a written notice of a short-term 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 arrangement 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 duration of 20 successive weeks, but less than 35 weeks of layoff in any duration of 52 consecutive weeks, where:- the employee continues to get considerable payments from the company;
or

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

– the staff member receives extra welfare;
or

– the staff member would be entitled to get extra welfare but isn’t receiving them due to the fact that they are used somewhere else;
or

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

– the company remembers the staff member within the time frame set out in a contract 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 recalls 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 momentary layoff as set out above, the company is thought about to have actually terminated the staff member’s employment. Generally, the staff member 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 actually been utilized constantly for 3 months or more if either:

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

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

Written notification of termination

A worker is entitled to observe of termination (or termination pay instead of notice) if they have been constantly used for at least three months. A person is thought about “utilized” not only while they are actively working, but likewise throughout whenever in which they are not working however the employment relationship still exists (for example, time in which the employee is off ill or on leave or on lay-off).

The quantity of notification to which a staff member is entitled depends upon their “duration of work”. A staff member’s period of employment consists of not just all time while the employee 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 short-term lay-off, the staff member’s work is deemed (or considered) to have been terminated on the first day of the lay-off-any time after that does not count as part of the employee’s period of employment, even though the worker may still be used for functions of the “constantly employed for three months” certification

– if 2 separate periods of work are separated by more than 13 weeks, just the most recent period counts for purposes of notification of termination

It is possible, in some circumstances, for an individual to have actually been “continually used” for 3 months or more and yet have a duration of work of less than three months. In such situations, the worker would be entitled to notice due to the fact that a staff member who has actually been continually used for a minimum of 3 months is entitled to notice, and the minimum notification entitlement of one week uses to a staff member with a duration of work of any length less than one year.

The following chart defines the quantity of notification needed:

Note: Special rules determine the quantity of notification needed 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 duration.

Requirements during the statutory notice duration

During the statutory notice period, an employer must:

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

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

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

Regular rate

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

Regular salaries

These are salaries besides overtime pay, getaway 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 a staff member who generally works the very same number of hours each week, a regular work week is a week of that many hours, not including overtime hours.

Some workers do not have a regular work week. That is, they do not work the same variety of hours every week or they are paid on a basis aside from time. For these employees, the “routine wages” for a “routine work week” is the typical amount of the regular incomes earned by the staff member in the weeks in which the worker worked during the duration of 12 weeks right away preceding the date the notice was offered.

An employer is not permitted to schedule a worker’s getaway time throughout the statutory notification duration unless the employee-after receiving composed notification of termination of employment-agrees to take their vacation time during the notification duration.

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

How to offer written notification

In many cases, composed notification of termination of employment need to be dealt with to the staff member. It can be provided personally or by mail, fax or email, as long as shipment can be validated.

There are special guidelines for offering notification of termination if an employee has an agreement of work or a cumulative arrangement that supplies seniority rights that enable a worker who is to be laid off or whose employment is to be terminated to displace (” bump”) other employees.

Because case, the company should publish a notification in the work environment (where it will be seen by the workers) setting out the names, seniority and task category of those employees the company means to end and the date of the proposed termination. The publishing of the notice is thought about to be notification of termination, since the date of the posting, to a worker who is “bumped” by an employee called in the notification. However, this notice of termination must still meet the length requirements set out in the ESA.

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

Termination pay

An employee who does not get the composed notification needed under the ESA needs to be given termination pay in lieu of notification. Termination pay is a lump amount payment equivalent to the routine salaries for a regular work week that a staff member would otherwise have been entitled to throughout the written notice period. An employee makes getaway pay on their termination pay. Employers need to 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 utilized through the notice duration.

Example: work week

Sarah has actually worked for 3 and a half years. Now her job has actually been removed and employment her work has been terminated. Sarah was not offered any written notification of termination.

Sarah worked 40 hours a week each week and was paid $20.00 an hour. She likewise received 4 percent holiday pay. Because she worked for more than 3 years but less than four years, she is entitled to three weeks’ pay in lieu of notice.

Sarah’s routine wages for a routine 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 vacation 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 continued protection for any advantage or pension strategies that applied to her for 3 weeks.

Example: No routine work week

Gerry has actually operated at a nursing home for employment 4 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 percent holiday pay.

Gerry’s company removed his position and did not give Gerry any composed notification of termination. Gerry was ill and off work for two of the 12 weeks instantly preceding the day his work was terminated. Gerry earned $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 incomes each week are computed:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for 2 weeks therefore these weeks are not consisted of in the estimation of average revenues) = $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 holiday pay is included to his termination pay:

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer should likewise ensure continued protection for any advantage or pension strategies that applied to him for 4 weeks.

When to pay termination pay

Termination pay need to be paid to an employee either seven days after the staff member’s work is terminated 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 more staff members at its establishment within a four-week period).

Meaning of “establishment”

An “establishment” is a place at which the employer carries on service. Separate locations can be considered one establishment if either:

– they lie within the exact same municipality, or

– an employee at one location has contractual seniority rights that encompass the other area, 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 worker works from home and does not operate at any other location where the employer continues business.

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

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

Example: where multiple places are considered one “establishment”

ABC Company has an office and a storage facility located in London, ON. Sabrina resides in London and works for ABC Company exclusively from another location: she carries out work for the company from home and does not operate at the office.

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

Employer obligations in a mass termination

When a mass termination happens, the company should finish and provide the Form 1 (Notice of termination of work) to the Director of Employment Standards (Director) by:

– email to esa_form1_notice@ontario.ca.

– fax to (416) 326-7061.

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

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

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

Any notice to the impacted workers is not thought about to have been given up until the Form 1 is received by the Director; to put it simply, notification of mass termination is not efficient till the Director gets the Form 1.

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

– publish a copy of the Form 1 supplied to the Director in the workplace where it will come to the attention of the impacted workers.

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

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

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

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

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

Exception to the mass termination guidelines

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

– the number of staff members whose work is being ended represents not more than 10 per cent of the workers who have actually been employed for at least three months at the establishment

– none of the terminations are triggered by the irreversible discontinuance of all or part of the employer’s company at the establishment

Mass termination: resignation by an employee

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

Temporary work after termination date in notice

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

If a worker works beyond the 13-week duration after the termination date and after that has their employment terminated, the worker will be entitled to a brand-new written notification of termination as if the previous notice had never ever been offered. The employee’s duration of work will then likewise consist of the period of momentary 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 work. This right is typically discovered in cumulative contracts.

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 severance pay, if they were entitled to discontinuance wage) at that time;
or

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

If a worker is entitled to both termination pay and severance pay, they must make the very same option for both.

If a worker who is not represented by a trade union chooses to keep their recall rights or stops working to make a choice, the company must send out the amount of the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the money in trust.

If a worker who is represented by a trade union chooses to keep their recall rights or fails to decide, the employer and the trade union need to try to come to an arrangement to hold the termination pay (and discontinuance wage, if any) in trust for the worker. If they can not concern an arrangement, and employment the trade union encourages the company and the Director of Employment Standards in composing that efforts have failed, the employer should send out the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If an employee selects to quit their recall rights or if the recall rights end, the cash that is held in trust should be sent out to the employee.

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

Exemptions to notice of termination or termination pay

A lot of these exemptions are intricate. Please contact the Employment Standards Information Centre, 1-800-531-5551, if you need more info. Please also describe the unique guideline tool.

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

– is guilty of wilful misconduct, disobedience or wilful disregard of task that is not insignificant and has not been condoned by the company. Note: “wilful” includes when an employee intended the resulting consequence or acted recklessly if they understood or ought to have understood the effects their conduct would have. Poor work conduct that is unexpected or unintended is generally ruled out wilful;

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

– the term ends or the job is not completed more than 12 months after the work started; or

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

See likewise: Employment Standards Self-Service Tool

Wrongful termination

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

The guidelines under the ESA about termination and severance of employment are minimum requirements. Some employees may have rights under the common law that are higher than the rights to notice of termination (or termination pay) and discontinuance wage under the ESA. A staff member might wish to sue their former employer in court for “wrongful termination”. Employees need to be mindful that they can not take legal action against a company for wrongful dismissal and submit a claim for termination pay or discontinuance wage with the ministry for the same termination or severance of employment. An employee should choose one or the other. Employees might want to get legal suggestions concerning their rights.