Termination Of Employment

A number of expressions are commonly utilized to explain scenarios when employment is ended. These include “release,” “released,” “dismissed,” “fired” and “permanently laid off.”

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

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

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

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

For the most part, when an employer ends the work of a staff member who has been continually employed for three months, the employer must supply the staff member with either written 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 an employer to give a worker a reason their work is being terminated. There are, nevertheless, some circumstances where an employer can not end a staff member’s employment even if the company is prepared to provide appropriate composed notice or termination pay. For instance, a company can not end somebody’s employment, or punish them in any other way, if any part of the reason for the termination of employment is based on the worker asking concerns about the ESA or working out a right under the ESA, such as refusing to work in excess of the daily or weekly hours of work maximums, or taking a leave of lack defined in the ESA. Please see the chapter on reprisals.

Qualifying for termination notice or pay in lieu

Certain workers are not entitled to observe of termination or termination pay under the ESA. Examples include: staff members who are guilty of wilful misconduct, disobedience, or wilful neglect of responsibility that is not trivial and has actually not been excused by the company. Other examples include building and construction employees, staff members on short-lived layoff, workers who refuse a deal of reasonable alternative employment and staff members who have actually been used less than three months.

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

The termination-of-employment guidelines are totally separate from any entitlements an employee may have to be paid discontinuance wage under the ESA.

Constructive dismissal

A constructive termination may occur when an makes a substantial modification to a basic term or condition of an employee’s work without the employee’s actual or implied consent.

For instance, an employee may be constructively dismissed if the company makes changes to the worker’s conditions of employment that result in a considerable reduction in income or a substantial negative change in such things as the staff member’s work location, hours of work, authority, or position. Constructive termination might also consist of circumstances where an employer harasses or abuses a worker, or a company gives a worker an ultimatum to “give up or be fired” and the employee resigns in reaction.

The staff member would have to resign in reaction to the change within an affordable duration 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 hard subject. For additional information on useful termination, please get in touch with the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

An employee is on short-term layoff when an employer cuts back or stops the staff member’s work without ending their employment (for instance, laying somebody off sometimes when there is not adequate work to do). The simple reality that the company does not define a recall date when laying the employee off does not always indicate that the lay-off is not short-term. Note, referall.us nevertheless, that a lay-off, even if planned to be short-lived, may result in constructive termination if it is not allowed by the employment contract.

For the functions of the termination provisions of the ESA, a “week of layoff” is a week in which the staff member earned 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 worker did not work for one or more days due to the fact that the worker was not able or offered to work, went through disciplinary suspension, or was not provided with work due to the fact that of a strike or lockout at their place of employment or in other places.

Employers are not required under the ESA to supply staff members with a composed notification of a momentary layoff, nor do they have to provide a factor for the lay-off. (They may, however, be required to do these things under a collective 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 period 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 employer continues to make payments for the benefit of the employee under a genuine group or employee insurance plan (such as a medical or drug insurance coverage strategy) or a legitimate retirement or pension;
or

– the employee receives supplemental joblessness advantages;
or

– the staff member would be entitled to receive additional joblessness advantages but isn’t receiving them due to the fact that they are utilized in other places;
or

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

– the employer remembers the employee 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 employer.

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

Written notification of termination and termination pay

Under the ESA, an employer can terminate the employment of an employee who has actually been employed constantly for three months or more if either:

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

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

Written notice of termination

A worker is entitled to discover of termination (or termination pay instead of notice) if they have been constantly employed for a minimum of three months. An individual is considered “employed” not just while they are actively working, however likewise during any time 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 on their “duration of work”. An employee’s period of work consists of not just perpetuity while the staff member is actively working but also 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 short-term lay-off, the employee’s work is considered (or thought about) to have actually been ended on the very first day of the lay-off-any time after that does not count as part of the staff member’s period of employment, even though the worker may still be utilized for purposes of the “constantly utilized for three months” qualification

– if 2 different durations of work are separated by more than 13 weeks, only the most recent duration counts for functions of notification of termination

It is possible, in some situations, for a person to have been “continuously employed” for three months or more and yet have a period of employment of less than 3 months. In such situations, the employee would be entitled to see 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 a worker with a duration of employment of any length less than one year.

The following chart defines the quantity of notice 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 ended at a company’s establishment within a four-week duration.

Requirements during the statutory notice period

During the statutory notification duration, an employer needs to:

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

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

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

Regular rate

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

Regular incomes

These are wages aside from overtime pay, holiday pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and discontinuance wage and certain contractual entitlements.

Regular work week

For a worker who usually works the same number of hours each week, a routine work week is a week of that many hours, not consisting of overtime hours.

Some employees do not have a routine work week. That is, they do not work the same variety of hours every week or they are paid on a basis other than time. For these workers, the “regular incomes” for a “routine work week” is the average amount of the regular earnings earned by the worker in the weeks in which the employee worked throughout the period of 12 weeks instantly preceding the date the notice was offered.

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

If a company offers longer notification than is needed, the statutory part of the notification duration is the last part of the duration that ends on the date of termination.

How to offer written notification

In a lot of cases, written notification of termination of work must be resolved to the worker. It can be offered in person or by mail, fax or e-mail, as long as delivery can be confirmed.

There are unique guidelines for providing notification of termination if an employee has a contract of employment or a collective arrangement that offers seniority rights that enable a staff member who is to be laid off or whose work is to be ended to displace (” bump”) other workers.

In that case, the company needs to post a notification in the work environment (where it will be seen by the workers) setting out the names, seniority and job classification of those employees the employer means to end and the date of the proposed termination. The publishing of the notice is considered to be notice of termination, since the date of the publishing, to a worker who is “bumped” by an employee called in the notice. However, this notification of termination need to still meet the length requirements set out in the ESA.

There are likewise special rules concerning how notification is provided when there is a mass termination.

Termination pay

A worker who does not get the composed notice needed under the ESA must be offered termination pay in lieu of notice. Termination pay is a lump sum payment equal to the regular wages for a regular work week that a worker would otherwise have actually been entitled to during the written notification period. A worker earns getaway pay on their termination pay. Employers need to likewise continue to make whatever contributions would be needed to keep 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 three and a half years. Now her job has been gotten rid of and her work has actually been terminated. Sarah was not offered any written notice of termination.

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

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

$ 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 calculated:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The company must likewise guarantee continued protection for any benefit or pension that used 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 getaway pay.

Gerry’s employer removed his position and did not give 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 ended. Gerry earned $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 earnings weekly 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 estimation of average earnings) = $180.00 a week

His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00

Then his holiday pay on his termination pay is computed:

6% of $720.00 = $43.20

Finally, his trip pay is contributed to his termination pay:

$ 720.00 + $43.20 = $763.20

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

When to pay termination pay

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

Mass termination

Special guidelines for notification of termination might apply in cases of mass termination (when a company is ending 50 or more employees at its facility within a four-week duration).

Meaning of “facility”

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

– they lie within the very same town, or

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

Effective October 26, 2023, in cases of mass termination, the term “facility” consists of an employee’s home, but just if the staff member works from home and does not work at any other place where the company brings on organization.

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

Note that where a worker carries out work both from their home and from another place where the employer brings on service (for example, a workplace), their home is not included in the definition of “facility”. Instead, the employee is thought about to have a connection to the workplace place and, therefore, for the purpose of mass termination, the employee is included with regard to that office location.

Example: where numerous places are considered one “establishment”

ABC Company has a workplace and a storage facility located in London, ON. Sabrina resides in London and works for ABC Company specifically remotely: she performs work for the company from home and does not operate at the workplace.

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

Employer commitments in a mass termination

When a mass termination happens, the company needs to finish and deliver 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.

– 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 affected employees is not thought about to have actually been provided till 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 offering workers with specific notifications of termination, the company must, on the very first day of the notification duration:

– post a copy of the Form 1 supplied to the Director in the workplace where it will come to the attention of the impacted staff members.

– supply a copy of the Form 1 to each affected staff member.

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

– 8 weeks observe if the employment of 50 to 199 employees is to be terminated

– 12 weeks see if the work of 200 to 499 workers is to be terminated

– 16 weeks see if the work of 500 or more workers is to be terminated

Exception to the mass termination guidelines

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

– the variety of staff members whose employment is being ended represents not more than 10 per cent of the employees who have actually been used for at least three months at the facility

– none of the terminations are caused by the irreversible discontinuance of all or part of the company’s business at the facility

Mass termination: resignation by an employee

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

Temporary work after termination date in notification

An employer can offer work to a staff member who has been given notification of termination on a short-term 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 required to offer any further notification of termination to the staff member when the short-lived work ends.

If an employee works beyond the 13-week duration after the termination date and then has their work ended, the worker will be entitled to a brand-new composed notification of termination as if the previous notification had actually never ever been offered. The employee’s period of employment will then also consist of the period of momentary work.

Recall rights

A “recall right” is the right of an employee on a layoff to be called back to work by their employer under a term or condition of work. This right is commonly found in collective contracts.

A worker who has recall rights and who is entitled to termination pay since 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

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

If an employee is entitled to both termination pay and severance pay, they need to make the same choice for both.

If a worker who is not represented by a trade union elects to keep their recall rights or fails to make a choice, the employer must send the quantity of the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.

If a worker who is represented by a trade union 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 severance pay, if any) in trust for the worker. If they can not pertain to a plan, and the trade union advises the company and the Director of Employment Standards in writing that efforts have stopped working, the employer must send out the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If a worker picks to quit their recall rights or if the recall rights expire, the money that is held in trust should be sent to the worker.

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

Exemptions to notice of termination or termination pay

Much of these exemptions are intricate. Please contact the Employment Standards Information Centre, 1-800-531-5551, if you need more details. Please likewise describe the unique rule tool.

The notice of termination and termination pay requirements of the ESA do not use to an employee who:

– is guilty of wilful misbehavior, disobedience or wilful neglect of duty that is not insignificant 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 unintentional or unintentional is normally not thought about wilful;

– was employed for a specific length of time or up until the conclusion of a specific task. However, such a worker will be entitled to discover of termination or termination pay if:- the work ends before the term expires or the job is finished; or

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

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

See likewise: Employment Standards Self-Service Tool

Wrongful dismissal

Rights higher than ESA notice of termination, termination pay, severance pay

The rules under the ESA about termination and severance of work are minimum requirements. Some workers may have rights under the common law that are higher than the rights to see of termination (or termination pay) and severance pay under the ESA. An employee might desire to sue their former employer in court for “wrongful dismissal”. Employees should know that they can not sue an employer for wrongful dismissal and file a claim for termination pay or severance pay with the ministry for the exact same termination or severance of work. A worker should pick one or the other. Employees may wish to get legal suggestions concerning their rights.