Termination Of Employment

A number of expressions are frequently utilized to explain situations when employment is terminated. These include “let go,” “released,” “dismissed,” “fired” and “permanently laid off.”

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

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

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

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

For the most part, when a company ends the employment of an employee who has actually been continually used for 3 months, the company should offer the employee with either composed notice of termination, termination pay or a mix (as long as the notice and the variety of weeks of termination pay together equivalent the length of notification the employee is entitled to get).

The ESA does not need a company to provide a worker a reason that their work is being terminated. There are, employment nevertheless, some scenarios where a company can not end an employee’s employment even if the employer is prepared to provide proper composed notice or termination pay. For example, a company can not end someone’s work, or punish them in any other method, if any part of the reason for the termination of work is based on the worker asking questions about the ESA or working out a right under the ESA, such as declining to work in excess of the daily or weekly hours of work maximums, or taking a leave of absence defined in the ESA. Please see the chapter on reprisals.

Receiving termination notice or pay in lieu

Certain employees are not entitled to discover of termination or termination pay under the ESA. Examples include: staff members who are guilty of wilful misconduct, disobedience, or wilful neglect of duty that is not insignificant and has not been condoned by the employer. Other examples include building and construction workers, employees on short-term layoff, workers who refuse an offer of reasonable alternative work and workers who have actually been used less than three months.

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

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

Constructive termination

A constructive termination may happen when an employer makes a substantial modification to an essential term or condition of a worker’s employment without the staff member’s actual or implied consent.

For instance, a staff member might be constructively dismissed if the employer makes modifications to the employee’s terms and conditions of employment that result in a considerable decrease in income or a considerable unfavorable modification in such things as the employee’s work place, hours of work, authority, or position. Constructive termination may also include scenarios where a company harasses or abuses an employee, or a company gives a worker a final notice to “quit or be fired” and the employee resigns in response.

The worker would have to resign in reaction to the change within a sensible amount of time in order for the employer’s actions to be thought about a termination of work for functions of the ESA.

Constructive dismissal is a complex and hard subject. For additional information on constructive termination, please get in touch with the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A worker is on temporary layoff when an employer cuts down or stops the employee’s work without ending their work (for instance, laying someone off sometimes when there is inadequate work to do). The simple reality that the company does not define a recall date when laying the employee off does not always imply that the lay-off is not short-term. Note, nevertheless, that a lay-off, even if intended to be short-term, may lead to useful dismissal if it is not permitted by the employment contract.

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

A week of layoff does not consist of any week in which the staff member did not work for several days due to the fact that the worker was not able or available to work, went through disciplinary suspension, or was not offered with work because of a strike or lockout at their place of work or in other places.

Employers are not required under the ESA to provide employees with a written notice of a momentary layoff, employment nor do they have to supply a factor for the lay-off. (They may, nevertheless, be needed 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 duration of 20 consecutive weeks;
or

2. more than 13 weeks in any duration of 20 consecutive weeks, however less than 35 weeks of layoff in any period of 52 successive weeks, where:- the employee continues to get considerable payments from the employer;
or

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

– the employee receives supplementary unemployment benefits;
or

– the employee would be entitled to get supplemental welfare but isn’t getting them due to the fact that they are employed in other places;
or

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

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

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

If an employee is laid off for a duration longer than a short-lived layoff as set out above, the company is thought about to have actually terminated the worker’s work. Generally, the worker will then be entitled to termination pay.

Written notice of termination and termination pay

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

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

– the employer pays termination pay to the staff member where no composed notification or less notification than is required is offered

Written notice of termination

An employee is entitled to observe of termination (or termination pay instead of notification) if they have been continually employed for a minimum of 3 months. An individual is thought about “used” not only while they are actively working, but likewise throughout whenever in which they are not working but the work 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 a worker is entitled depends upon their “duration of employment”. An employee’s period of work consists of not only perpetuity while the employee is actively working however likewise at any time that they are not working however the employment relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a momentary lay-off, the worker’s employment is considered (or considered) to have actually been ended on the first day of the lay-off-any time after that does not count as part of the employee’s period of work, although the worker may still be used for purposes of the “continuously used for three months” qualification

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

It is possible, in some scenarios, for a person to have actually been “constantly used” for 3 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 due to the fact that a worker who has actually been continuously used for at least 3 months is entitled to notice, and the minimum notice privilege of one week applies to an employee with a duration of employment of any length less than one year.

The following chart specifies the amount of notification required:

Note: Special guidelines figure out the quantity of notification required in the case of mass terminations – where the work of 50 or more employees is ended at an employer’s facility within a four-week period.

Requirements during the statutory notification period

During the statutory notice period, an employer should:

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

– continue to make whatever contributions would be needed to preserve the employee’s benefits plans; and

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

Regular rate

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

Regular wages

These are incomes besides overtime pay, getaway pay, public holiday pay, employment premium pay, domestic or sexual violence leave pay, termination of task pay, termination pay and severance pay and particular contractual entitlements.

Regular work week

For a staff member who typically works the exact same variety of hours weekly, a routine work week is a week of that numerous hours, not including overtime hours.

Some employees do not have a regular work week. That is, employment they do not work the very same variety of hours each week or they are paid on a basis aside from time. For these employees, the “routine incomes” for a “regular work week” is the typical amount of the routine earnings made by the staff member in the weeks in which the employee worked during the period of 12 weeks immediately preceding the date the notice was provided.

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

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

How to offer written notification

For the most part, written notice of termination of work need to be addressed to the worker. It can be provided face to face or by mail, fax or e-mail, as long as delivery can be confirmed.

There are unique guidelines for supplying notice of termination if an employee has an agreement of employment or a cumulative arrangement that offers seniority rights that enable a staff member who is to be laid off or whose work is to be terminated to displace (” bump”) other staff members.

Because case, the company should post a notification in the workplace (where it will be seen by the employees) setting out the names, seniority and task classification of those employees the company plans to end and the date of the proposed termination. The posting of the notice is thought about to be notification of termination, as of the date of the publishing, to an employee who is “bumped” by a worker called in the notice. However, this notification of termination need to still fulfill the length requirements set out in the ESA.

There are likewise unique guidelines regarding how notification is supplied when there is a mass termination.

Termination pay

A worker who does not get the written notification needed under the ESA should be offered termination pay in lieu of notification. Termination pay is a swelling amount payment equal to the routine wages for a regular work week that a staff member would otherwise have actually been entitled to during the written notification duration. A worker earns vacation pay on their termination pay. Employers need to likewise continue to make whatever contributions would be required to preserve the advantages the worker would have been entitled to had they continued to be utilized through the notification period.

Example: Regular work week

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

Sarah worked 40 hours a week weekly and was paid $20.00 an hour. She also got four percent trip 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 routine incomes for a routine work week are calculated:

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

Her termination pay is computed:

$ 800.00 X 3 weeks = $2,400.00

Then her vacation pay on her termination pay is determined:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The employer needs to likewise make sure ongoing coverage for any benefit or pension that applied to her for 3 weeks.

Example: No routine work week

Gerry has actually operated at an assisted living home for 4 years. He works every week, but his hours differ from week to week. His rate of pay is $25.00 an hour, employment and he is paid 6 per cent vacation pay.

Gerry’s company removed his position and did not provide Gerry any composed notification of termination. Gerry was ill and off work for 2 of the 12 weeks right away preceding the day his employment was ended. Gerry made $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 typical incomes per week are computed:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for two weeks for that reason these weeks are not consisted of in the computation of typical profits) = $180.00 a week

His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00

Then his holiday pay on his termination pay is calculated:

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 should likewise guarantee continued protection for any benefit or pension that used to him for 4 weeks.

When to pay termination pay

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

Mass termination

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

Meaning of “facility”

An “facility” is an area at which the employer carries on business. Separate places can be thought about one facility if either:

– they lie within the very same town, or

– an employee at one place has legal seniority rights that encompass the other location, enabling the employee to displace another staff member (also called “bumping rights”).

Effective October 26, 2023, in cases of mass termination, the term “facility” consists of a worker’s home, but just if the staff member works from home and does not operate at any other area where the employer continues service.

This will need that employees who work solely from another location be thought about for inclusion in the count when identifying whether 50 or more employees have been ended.

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

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

ABC Company has an office and a warehouse situated in London, ON. Sabrina resides in London and works for ABC Company specifically remotely: she carries out work for the company from home and does not work at the workplace.

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

Employer responsibilities in a mass termination

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

– email to esa_form1_notice@ontario.ca.

– fax to (416) 326-7061.

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

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

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

Any notification to the impacted employees is ruled out to have actually been given up until 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 supplying employees with individual notifications of termination, the company must, on the very first day of the notice period:

– publish a copy of the Form 1 supplied to the Director in the work environment where it will come to the attention of the affected workers.

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

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

– 8 weeks notice if the work of 50 to 199 employees is to be ended

– 12 weeks discover if the employment of 200 to 499 workers is to be ended

– 16 weeks observe if the employment of 500 or more workers is to be terminated

Exception to the mass termination rules

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

– the variety of workers whose employment is being terminated represents not more than 10 percent of the staff members who have been utilized for a minimum of 3 months at the establishment

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

Mass termination: resignation by a worker

An employee who has actually gotten termination notice under the mass termination rules who wishes to resign before the termination date supplied in the company’s notification must offer the employer a minimum of one week’s written notification of resignation if the staff member has been employed for less than 2 years. If the employment duration has been 2 years or more, the employee must give a minimum of 2 weeks’ composed notice of resignation. However, the employee does not need to provide notification of resignation if the company constructively dismisses the staff member or breaches a term of the agreement.

Temporary work after termination date in notification

An employer can supply 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 notification without affecting the original date of the termination and without being required to provide any further notification of termination to the employee when the short-term work ends.

If a staff member works beyond the 13-week period after the termination date and then has their employment terminated, the worker will be entitled to a new written notice of termination as if the previous notice had actually never ever been given. The employee’s period of work will then also include the duration 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 frequently discovered in cumulative arrangements.

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

– give up their recall rights and receive termination pay (and severance pay, if they were entitled to severance pay).

If a worker is entitled to both termination pay and discontinuance wage, they should make the very same option for both.

If an employee who is not represented by a trade union chooses to keep their recall rights or stops working to make a choice, employment the employer needs to send the quantity of the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

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

If a staff member selects to provide up their recall rights or if the recall rights expire, the cash that is held in trust must be sent to the staff member.

If the employee accepts a recall back to work, the cash that is held in trust will be returned to the employer.

Exemptions to see 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 information. Please also refer to the special guideline tool.

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

– is guilty of wilful misconduct, disobedience or wilful neglect of duty that is not insignificant and has not been condoned by the company. Note: “wilful” includes when a staff member intended the resulting consequence or acted recklessly if they understood or need to have known the results their conduct would have. Poor work conduct that is unexpected or unintended is normally ruled out wilful;

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

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

– the work continues for three months or more after the term ends or the task is finished;

See also: 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 employment are minimum requirements. Some staff members might have rights under the typical law that are greater than the rights to observe of termination (or termination pay) and discontinuance wage under the ESA. A worker may wish to sue their previous employer in court for “wrongful termination”. Employees ought to know that they can not take legal action against a company for wrongful termination and submit a claim for termination pay or severance pay with the ministry for the exact same termination or severance of employment. An employee should select one or the other. Employees might wish to get legal recommendations worrying their rights.