Termination Of Employment

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

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

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

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

– lays an employee off for a period that is longer than a “short-term layoff”.

For the most part, when a company ends the work of a worker who has actually been constantly employed for three months, the employer should supply the staff member with either composed notice of termination, termination pay or a combination (as long as the notification and the variety of weeks of termination pay together equal the length of notification the staff member is entitled to receive).

The ESA does not need a company to provide a staff member a factor why their employment is being terminated. There are, however, some situations where a company can not end a staff member’s employment even if the company is prepared to give proper written notice or termination pay. For example, a company can not end someone’s employment, or penalize them in any other way, if any part of the reason for the termination of employment is based upon the staff member 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 lack defined in the ESA. Please see the chapter on reprisals.

Receiving termination notice or pay in lieu

Certain workers are not entitled to see of termination or termination pay under the ESA. Examples consist of: staff members who are guilty of wilful misbehavior, disobedience, or wilful disregard of responsibility that is not minor and has actually not been excused by the company. Other examples include building and construction employees, workers on short-lived layoff, workers who decline a deal of sensible alternative work and employees who have been utilized less than three months.

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

The termination-of-employment guidelines are entirely separate from any privileges a staff member may have to be paid discontinuance wage under the ESA.

Constructive termination

A positive termination might occur when a company makes a considerable modification to an essential term or condition of a staff member’s employment without the staff member’s actual or implied authorization.

For instance, a worker might be constructively dismissed if the company makes modifications to the worker’s terms and conditions of employment that lead to a considerable decrease in income or a considerable negative change in such things as the employee’s work area, hours of work, authority, or position. Constructive termination might likewise include situations where a company bugs or abuses a staff member, or a company provides a staff member a final notice to “quit or be fired” and the staff member resigns in reaction.

The worker would need to resign in reaction to the change within a reasonable duration of time in order for the company’s actions to be thought about a termination of work for purposes of the ESA.

Constructive termination is a complex and challenging subject. To learn more on positive termination, please call the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A worker is on short-lived layoff when an employer cuts down or stops the employee’s work without ending their employment (for instance, laying someone off at times when there is not enough work to do). The mere fact that the company does not define a recall date when laying the employee off does not always mean that the lay-off is not temporary. Note, however, that a lay-off, even if meant to be temporary, might result in constructive termination if it is not allowed by the employment contract.

For the purposes of the termination arrangements 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 earns 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 available to work, underwent disciplinary suspension, or was not offered with work because of a strike or lockout at their location of employment or somewhere else.

Employers are not required under the ESA to provide employees with a composed notification of a temporary layoff, nor do they have to provide a factor for the lay-off. (They may, nevertheless, be needed to do these things under a cumulative contract or an employment agreement.)

Under the ESA, a “momentary 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 period of 20 successive weeks, however 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 worker under a legitimate group or staff member insurance plan (such as a medical or drug insurance plan) or a legitimate retirement or pension strategy;
or

– the worker gets supplemental joblessness advantages;
or

– the staff member would be entitled to get extra joblessness benefits but isn’t receiving them since they are employed somewhere else;
or

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

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

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

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

Written notification of termination and termination pay

Under the ESA, a company can end the work of a worker who has been employed constantly for 3 months or more if either:

– the company has offered the staff member appropriate composed notice of termination and the notification duration has expired

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

Written notification of termination

An employee is entitled to notice of termination (or termination pay instead of notification) if they have actually been constantly used for at least three months. An individual is considered “employed” not just while they are actively working, however likewise throughout at any time in which they are not working but the employment relationship still exists (for example, time in which the staff member is off sick or on leave or on lay-off).

The quantity of notice to which an employee is entitled depends on their “period of employment”. A staff member’s period of employment includes not only perpetuity while the worker is actively working but also at 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 employee’s work is deemed (or considered) to have actually been terminated on the very first day of the lay-off-any time after that does not count as part of the staff member’s duration of work, although the worker might still be employed for functions of the “continuously utilized for three months” certification

– if 2 different periods of employment are separated by more than 13 weeks, just the most recent duration counts for functions of notification of termination

It is possible, in some scenarios, for an individual to have actually been “continuously employed” for 3 months or more and yet have a duration of employment of less than three months. In such situations, the staff member would be entitled to see due to the fact that a staff member who has been continually employed for at least three months is entitled to discover, and the minimum notice privilege of one week applies to a staff member with a duration of employment of any length less than one year.

The following chart specifies the amount of notification needed:

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

Requirements during the statutory notice period

During the statutory notification period, a company needs to:

– 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 worker’s advantages strategies; and

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

Regular rate

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

Regular wages

These are salaries other than overtime pay, vacation pay, public vacation pay, premium pay, domestic or employment sexual violence leave pay, termination of assignment pay, termination pay and discontinuance wage and certain contractual privileges.

Regular work week

For a worker who normally works the very same variety of hours weekly, a routine work week is a week of that many hours, not consisting of overtime hours.

Some staff members do not have a routine work week. That is, they do not work the same variety of hours weekly or they are paid on a basis besides time. For these staff members, the “routine wages” for a “regular work week” is the average quantity of the regular earnings earned by the staff member in the weeks in which the worker worked during the duration of 12 weeks instantly preceding the date the notice was provided.

An employer is not enabled to set up a worker’s getaway time during the statutory notification duration unless the employee-after getting written notice of termination of employment-agrees to take their holiday time during the notification period.

If an employer offers longer notification than is required, the statutory part of the notification duration is the last part of the duration that ends on the date of termination.

How to provide written notice

For the most part, written notice of termination of work must be resolved to the staff member. It can be provided personally or by mail, fax or email, as long as delivery can be verified.

There are unique guidelines for offering notification of termination if a worker has an agreement of employment or a collective contract that offers seniority rights that enable a worker 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 publish a notice in the workplace (where it will be seen by the workers) setting out the names, seniority and job category of those employees the employer intends to terminate and the date of the proposed termination. The posting of the notice is thought about to be notice of termination, as of the date of the publishing, to a staff member who is “bumped” by a worker called in the notification. However, this notice of termination should still fulfill the length requirements set out in the ESA.

There are also special rules concerning how notice is supplied when there is a mass termination.

Termination pay

A worker who does not get the written notice required under the ESA needs to be offered termination pay in lieu of notice. Termination pay is a lump sum payment equivalent to the regular incomes for a routine work week that a worker would otherwise have actually been entitled to during the composed notice duration. A staff member makes trip pay on their termination pay. Employers must also continue to make whatever contributions would be required to preserve the benefits the worker would have been entitled to had they continued to be utilized through the notification duration.

Example: Regular work week

Sarah has actually worked for 3 and a half years. Now her task has been gotten rid of and her work has been terminated. Sarah was not given any written notice of termination.

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

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

$ 20.00 an hour X 40 hours a week = $800.00 a week

Her termination pay is determined:

$ 800.00 X 3 weeks = $2,400.00

Then her vacation pay on her termination pay is calculated:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The company must also make sure continued protection for any advantage or pension that applied to her for 3 weeks.

Example: No regular work week

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

Gerry’s company eliminated his position and did not give Gerry any composed notice of termination. Gerry was ill and off work for two of the 12 weeks immediately preceding the day his work was terminated. Gerry made $1,800.00 in the 12 weeks before the day on which his work ended.

Gerry is entitled to four weeks of termination pay.

Gerry’s typical revenues each week are computed:

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

His termination pay is determined:

$ 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 added to his termination pay:

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company must also make sure continued protection for any advantage or pension that used to him for 4 weeks.

When to pay termination pay

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

Mass termination

Special guidelines for notice of termination might apply in cases of mass termination (when an employer is ending 50 or more workers at its establishment within a four-week duration).

Meaning of “establishment”

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

– they are situated within the exact same town, or

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

Effective October 26, 2023, in cases of mass termination, the term “establishment” consists of a staff member’s home, however just if the worker works from home and does not work at any other area where the company brings on business.

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

Note that where a staff member performs work both from their home and from another place where the employer continues organization (for example, a workplace), their home is not included in the meaning of “establishment”. 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 is consisted of with regard to that workplace place.

Example: where several locations are thought about one “establishment”

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

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

Employer responsibilities in a mass termination

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

– e-mail to esa_form1_notice@ontario.ca.

– fax to (416) 326-7061.

– personal shipment 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 shipment can be confirmed.

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

Any notification to the impacted employees is ruled out to have been provided up until the Form 1 is gotten by the Director; in other words, notice of mass termination is not reliable till the Director gets the Form 1.

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

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

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

The quantity of notification workers must get in a mass termination is not based on the workers’ length of work, but on the variety of workers who have been ended. A company should offer:

– 8 weeks discover if the employment of 50 to 199 staff members is to be terminated

– 12 weeks observe if the employment of 200 to 499 staff members is to be ended

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

Exception to the mass termination guidelines

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

– the variety of workers whose employment is being ended represents not more than 10 percent of the staff members who have been employed for at least three months at the establishment

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

Mass termination: employment resignation by a staff member

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

Temporary work after termination date in notification

A company can provide work to a worker who has been notified of termination on a short-term basis in the 13-week duration after the termination date set out in the notice without affecting the original date of the termination and without being required to offer any additional notice of termination to the staff member 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 employee will be entitled to a new written notification of termination as if the previous notice had never been provided. The worker’s period of work will then also consist of the duration of short-term work.

Recall rights

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

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

– keep their recall rights and not be paid termination pay (or discontinuance wage, if they were entitled to discontinuance wage) at that time;
or

– quit their recall rights and receive 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 exact 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 choose, the employer 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 chooses to keep their recall rights or stops working to decide, the employer and the trade union must attempt to come to an arrangement to hold the termination pay (and severance pay, if any) in trust for employment the employee. If they can not pertain to an arrangement, and the trade union recommends the employer and the Director of Employment Standards in composing that efforts have failed, the company needs to 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 provide up their recall rights or if the recall rights end, the cash that is kept in trust needs to be sent to the staff member.

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

Exemptions to observe of termination or termination pay

Much of these exemptions are complicated. Please call the Employment Standards Information Centre, 1-800-531-5551, if you need more info. 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 misbehavior, disobedience or wilful overlook of duty that is not trivial and has not been condoned by the company. Note: “wilful” includes when an employee planned the resulting effect or acted recklessly if they knew or must have known the effects their conduct would have. Poor work conduct that is accidental or unintended is generally not considered wilful;

– was employed for a particular length of time or till the conclusion of a specific job. However, such a staff member will be entitled to discover of termination or termination pay if:- the employment ends before the term expires or the task is completed; or

– the term ends or the job is not finished more than 12 months after the employment began; or

– the employment continues for 3 months or more after the term ends or the task is finished;

See likewise: Employment Standards Self-Service Tool

Wrongful termination

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

The rules under the ESA about termination and severance of employment are minimum requirements. Some workers may have rights under the common law that are greater than the rights to see of termination (or termination pay) and severance pay under the ESA. A worker might want to sue their former company in court for “wrongful dismissal”. Employees need to know that they can not sue a company for wrongful dismissal and file a claim for employment termination pay or discontinuance wage with the ministry for the exact same termination or severance of work. A worker needs to choose one or the other. Employees may want to obtain legal advice concerning their rights.