Termination Of Employment

A variety of expressions are frequently used to describe circumstances when employment is terminated. These consist of “release,” “discharged,” “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 worker, consisting of where a worker is no longer utilized due to the bankruptcy or insolvency of the company;

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

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

In many cases, when a company ends the employment of a staff member who has actually been constantly utilized for 3 months, the company needs to provide the staff member with either composed notice of termination, termination pay or a mix (as long as the notice and the number of weeks of termination pay together equal the length of notification the staff member is entitled to receive).

The ESA does not need an employer to give a staff member a reason their work is being terminated. There are, however, some circumstances where a company can not end an employee’s employment even if the employer is prepared to offer correct composed notice 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 upon the worker asking concerns about the ESA or working out a right under the ESA, such as refusing to work in excess of the day-to-day or weekly hours of work maximums, or taking a leave of lack defined in the ESA. Please see the chapter on reprisals.

Qualifying for termination notification or pay in lieu

Certain workers are not entitled to notice of termination or termination pay under the ESA. Examples consist of: workers who are guilty of wilful misconduct, disobedience, or wilful disregard of responsibility that is not trivial and has not been condoned by the employer. Other examples include building and construction staff members, employees on temporary layoff, employees who decline a deal of sensible alternative work and workers who have actually 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 notice of termination or termination pay.” Please also refer to the special rule tool.

The termination-of-employment guidelines are completely different from any privileges a worker might need to be paid severance pay under the ESA.

Constructive dismissal

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

For example, a worker might be constructively dismissed if the company makes modifications to the worker’s terms and conditions of employment that result in a substantial decrease in wage or a substantial negative change in such things as the employee’s work location, hours of work, authority, or position. Constructive dismissal may likewise consist of circumstances where an employer bugs or abuses an employee, or a company provides a worker a demand to “give up or be fired” and the employee resigns in action.

The worker would need to resign in response to the change within a sensible time period in order for the employer’s actions to be considered a termination of employment for functions of the ESA.

Constructive dismissal is a complex and tough topic. For additional information on positive dismissal, please contact the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A worker is on short-lived layoff when an employer cuts back or stops the employee’s work without ending their employment (for example, laying someone off at times when there is inadequate work to do). The mere reality that the employer does not define a recall date when laying the employee off does not always mean that the lay-off is not short-lived. Note, however, that a lay-off, even if meant to be momentary, might result in constructive dismissal if it is not enabled by the employment agreement.

For the purposes of the termination arrangements of the ESA, a “week of layoff” is a week in which the worker made less than half of what they would generally earn (or makes typically) in a week.

A week of layoff does not consist of any week in which the worker did not work for one or more days since the worker was not able or readily available to work, underwent disciplinary suspension, or was not supplied with work because of a strike or lockout at their place of work or somewhere else.

Employers are not needed under the ESA to provide workers with a written notice of a momentary layoff, nor do they have to offer a reason for the lay-off. (They may, however, be required to do these things under a cumulative agreement or an employment agreement.)

Under the ESA, a “momentary layoff” can last:

1. not more than 13 weeks of layoff in any period 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 consecutive weeks, where:- the employee continues to get significant payments from the employer;
or

– the employer 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;
or

– the worker receives extra joblessness advantages;
or

– the worker would be entitled to receive additional welfare however isn’t getting them due to the fact that they are employed elsewhere;
or

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

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

3. a layoff longer than a layoff explained in ‘B’ where the company remembers a staff member who is represented by a trade union within the time set out in an arrangement in between the union and the company.

If a staff member is laid off for a duration longer than a momentary layoff as set out above, the employer is considered to have terminated the staff member’s employment. Generally, the worker will then be entitled to termination pay.

Written notice of termination and termination pay

Under the ESA, a company can end the employment of a staff member who has been employed constantly for three months or employment more if either:

– the company has offered the staff member appropriate composed notice of termination and the notice period has actually expired

– the employer pays termination pay to the employee where no composed notification or employment less notice than is required is given

Written notice of termination

A worker is entitled to see of termination (or termination pay rather of notice) if they have actually been continually used for a minimum of three months. A person is thought about “used” not only while they are actively working, however likewise during any time in which they are not working but the employment 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 an employee is entitled depends on their “duration of work”. A worker’s duration of work consists of not just all time while the employee is actively working but likewise whenever that they are not working but the employment relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a lay-off, the staff member’s work is deemed (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 work, even though the staff member might still be employed for purposes of the “continually used for three months” certification

– if 2 separate periods of employment are separated by more than 13 weeks, only the most recent period counts for functions of notification of termination

It is possible, in some situations, for an individual to have actually been “constantly employed” for 3 months or more and yet have a period of work of less than 3 months. In such situations, the worker would be entitled to observe because a worker who has been continuously used for at least three months is entitled to notice, 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 amount of notification needed:

Note: Special rules identify the quantity of notice required 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 throughout the statutory notice period

During the statutory notification period, an employer should:

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

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

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

Regular rate

This is an employee’s rate of pay for each non-overtime hour of work in the worker’s work week.

Regular wages

These are earnings other than overtime pay, vacation pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of task pay, termination pay and severance pay and particular contractual privileges.

Regular work week

For a staff member who generally works the very same number of hours each week, a routine work week is a week of that lots of hours, not consisting of overtime hours.

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

A company is not allowed to set up a staff member’s getaway time throughout the statutory notice period unless the employee-after receiving composed notification of termination of employment-agrees to take their holiday time during the notification duration.

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

How to offer written notice

In the majority of cases, written notification of termination of work should be addressed to the employee. It can be provided personally or by mail, fax or email, as long as delivery can be verified.

There are unique rules for providing notice of termination if an employee has an agreement of employment or a collective arrangement that offers seniority rights that allow an employee who is to be laid off or employment whose employment is to be ended to displace (” bump”) other employees.

Because case, the employer should post a notification in the workplace (where it will be seen by the staff members) setting out the names, seniority and job classification of those staff members the company means to end and the date of the proposed termination. The posting of the notification is thought about to be notice of termination, as of the date of the publishing, to a worker who is “bumped” by a worker called in the notice. However, this notice of termination must still satisfy the length requirements set out in the ESA.

There are likewise special rules regarding how notice is offered when there is a mass termination.

Termination pay

An employee who does not get the composed notice needed under the ESA should be given termination pay in lieu of notice. Termination pay is a lump sum payment equal to the routine salaries for a regular work week that an employee would otherwise have been entitled to throughout the written notice period. An employee makes getaway pay on their termination pay. Employers should also continue to make whatever contributions would be needed to preserve the advantages the employee would have been entitled to had they continued to be used through the notification duration.

Example: Regular work week

Sarah has actually worked for 3 and a half years. Now her task has actually been eliminated and her work has actually been terminated. Sarah was not offered any composed notification of termination.

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

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

$ 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 getaway pay on her termination pay is determined:

4% of $2,400.00 = $96.00

Finally, her getaway pay is included to her termination pay:

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The company should also guarantee continued coverage for any benefit or pension that applied to her for three weeks.

Example: No regular work week

Gerry has worked at a nursing home for four years. He works each week, but his hours vary from week to week. His rate of pay is $25.00 an hour, and he is paid 6 percent vacation pay.

Gerry’s employer eliminated his position and did not offer Gerry any composed notification of termination. Gerry was ill and off work for two of the 12 weeks instantly preceding the day his work was ended. Gerry made $1,800.00 in the 12 weeks before the day on which his employment ended.

Gerry is entitled to four 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 two weeks therefore these weeks are not included in the estimation of average incomes) = $180.00 a week

His termination pay is determined:

$ 180.00 × 4 weeks = $720.00

Then his vacation pay on his termination pay is computed:

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 employer must likewise ensure ongoing coverage for employment any advantage or pension plans that applied to him for 4 weeks.

When to pay termination pay

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

Mass termination

Special rules for notification of termination might use in cases of mass termination (when a company is terminating 50 or more workers at its facility within a four-week period).

Meaning of “establishment”

An “establishment” is a location at which the company continues organization. Separate locations can be thought about one facility if either:

– they lie within the very same town, or

– a staff member at one area has legal seniority rights that encompass the other area, allowing the employee to displace another staff member (also called “bumping rights”).

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

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

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

Example: where multiple locations are considered one “facility”

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 business from home and does not work at the office.

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

Employer commitments in a mass termination

When a mass termination takes place, the company 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 workplace on a day and at a time when it is open.

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

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

Any notification to the impacted employees is not considered to have actually been offered till the Form 1 is received by the Director; to put it simply, notification of mass termination is ineffective till the Director gets the Form 1.

In addition to providing staff members with private notices of termination, the company must, on the first day of the notification duration:

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

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

The amount of notification staff members should receive in a mass termination is not based on the staff members’ length of employment, however on the number of employees who have actually been terminated. A company needs to give:

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

– 12 weeks observe if the work of 200 to 499 employees is to be terminated

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

Exception to the mass termination rules

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

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

– none of the terminations are brought on by the long-term discontinuance of all or employment part of the company’s business at the facility

Mass termination: resignation by a staff member

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

Temporary work after termination date in notification

A company can offer work to a staff member who has actually been notified of termination on a momentary basis in the 13-week duration after the termination date set out in the notification without impacting the initial date of the termination and without being needed to provide any additional notification of termination to the employee when the short-lived work ends.

If a worker works beyond the 13-week duration after the termination date and after that has their employment terminated, the staff member will be entitled to a new composed notice of termination as if the previous notice had actually never ever been provided. The staff member’s duration of work will then also consist of the period 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 employment condition of work. This right is frequently found in collective arrangements.

A staff member who has recall rights and who is entitled to termination pay because of a layoff of 35 weeks or more might pick 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

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

If an employee is entitled to both termination pay and severance pay, they need to 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 needs to 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 staff member who is represented by a trade union elects to keep their recall rights or stops working to choose, the company and the trade union should attempt to come to an arrangement to hold the termination pay (and severance pay, if any) in trust for the employee. 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 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 picks to quit their recall rights or if the recall rights expire, the cash that is kept in trust must be sent to the worker.

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

Exemptions to discover of termination or termination pay

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

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

– is guilty of wilful misbehavior, disobedience or wilful neglect of duty that is not unimportant and has actually not been excused by the employer. Note: “wilful” consists of when a staff member intended the resulting repercussion or acted recklessly if they understood or should have understood the effects their conduct would have. Poor work conduct that is accidental or unintended is usually ruled out wilful;

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

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

Rights greater 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 typical law that are higher than the rights to observe of termination (or termination pay) and severance pay under the ESA. A staff member may want to sue their previous company in court for “wrongful termination”. Employees must be mindful that they can not take legal action against a company for wrongful dismissal and sue for termination pay or discontinuance wage with the ministry for the exact same termination or severance of work. A worker should choose one or the other. Employees might wish to obtain legal suggestions worrying their rights.