Termination Of Employment

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

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

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

– “constructively” dismisses a worker and the worker resigns, in action, 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 employed for 3 months, the company must provide the employee with either written 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 employee is entitled to get).

The ESA does not require an employer to give a worker a reason that their employment is being terminated. There are, however, some scenarios where a company can not end an employee’s work even if the company is prepared to give correct composed notification or termination pay. For instance, a company can not end somebody’s work, or penalize them in any other method, if any part of the factor for the termination of employment is based on the staff member asking concerns about the ESA or exercising 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 specified in the ESA. Please see the chapter on reprisals.

Receiving termination notice or pay in lieu

Certain staff members are not entitled to see of termination or termination pay under the ESA. Examples include: staff members who are guilty of wilful misbehavior, disobedience, or wilful neglect of responsibility that is not minor and has not been condoned by the company. Other examples consist of construction workers, workers on short-lived layoff, staff members who refuse an offer of sensible alternative work and employees who have actually been employed less than 3 months.

There are a number of other exemptions to the termination of work provisions of the ESA. See “Exemptions to observe of termination or termination pay.” Please also describe the special rule tool.

The termination-of-employment rules are completely separate from any privileges a worker may need to be paid discontinuance wage under the ESA.

Constructive dismissal

A constructive termination may occur when a company makes a substantial change to a basic term or condition of a staff member’s work without the worker’s real or implied authorization.

For employment example, an employee might be constructively dismissed if the company makes changes to the employee’s terms of employment that lead to a significant decrease in salary or a substantial negative modification in such things as the worker’s work area, hours of work, authority, or position. Constructive termination may also include scenarios where an employer bugs or abuses a worker, or an employer gives an employee a demand to “stop or be fired” and the worker resigns in action.

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

Constructive dismissal is a complex and tough subject. For more details on useful dismissal, please contact the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

An employee is on short-term layoff when a company cuts down or stops the staff member’s work without ending their employment (for instance, laying someone off sometimes when there is inadequate work to do). The simple reality that the employer does not specify a recall date when laying the worker off does not necessarily indicate that the lay-off is not temporary. Note, nevertheless, that a lay-off, even if planned to be short-lived, might lead to constructive termination if it is not enabled by the employment agreement.

For employment the functions 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 normally make (or earns on average) 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 staff member 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 employment or somewhere else.

Employers are not required under the ESA to provide workers with a composed notification of a short-lived layoff, nor do they need to offer a factor for the lay-off. (They may, nevertheless, be required to do these things under a cumulative agreement or an employment agreement.)

Under the ESA, a “short-lived layoff” can last:

1. not more than 13 weeks of layoff in any duration of 20 successive weeks;
or

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

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

– the staff member gets supplemental unemployment advantages;
or

– the employee would be entitled to receive supplementary welfare however isn’t getting them because they are used in other places;
or

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

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

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

If a staff member is laid off for a period longer than a short-term layoff as set out above, the company is thought about to have terminated the employee’s work. Generally, the staff member will then be entitled to termination pay.

Written notification of termination and termination pay

Under the ESA, an employer can terminate the employment of a staff member who has been utilized continually for three months or more if either:

– the company has provided the employee correct composed notification of termination and the notice period has actually ended

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

Written notice of termination

A worker is entitled to observe of termination (or termination pay rather of notice) if they have actually been continually employed for at least 3 months. An individual is considered “employed” not just while they are actively working, however also during whenever 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 employment on lay-off).

The amount of notice to which an employee is entitled depends on their “period of employment”. An employee’s period of employment includes not only all time while the employee is actively working however likewise whenever that they are not working however the employment relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a short-term lay-off, the worker’s employment is deemed (or thought about) to have been ended on the first day of the lay-off-any time after that does not count as part of the period of employment, although the employee might still be utilized for functions of the “continuously employed for 3 months” credentials

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

It is possible, in some situations, for a person to have been “continually utilized” for three months or more and yet have a period of employment of less than 3 months. In such scenarios, the staff member would be entitled to discover because an employee who has actually been continuously employed for at least 3 months is entitled to notice, and the minimum notification privilege of one week uses to an employee with a period of employment of any length less than one year.

The following chart defines the quantity of notice required:

Note: Special rules determine the quantity of notice needed in the case of mass terminations – where the work of 50 or more staff members is terminated at an employer’s establishment within a four-week duration.

Requirements during the statutory notification period

During the statutory notice period, an employer should:

– not minimize the staff member’s wage rate or change any other term or condition of work;

– continue to make whatever contributions would be needed to keep the employee’s advantages strategies; and

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

Regular rate

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

Regular earnings

These are wages besides overtime pay, holiday pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of task pay, termination pay and severance pay and specific contractual privileges.

Regular work week

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

Some staff members do not have a routine work week. That is, they do not work the exact same variety of hours each week or they are paid on a basis aside from time. For these workers, the “routine salaries” for a “regular work week” is the average quantity of the routine salaries made by the employee in the weeks in which the staff member worked throughout the period of 12 weeks instantly preceding the date the notification was given.

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

If a company supplies longer notice 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 offer written notice

Most of the times, written notice of termination of employment should be dealt with to the employee. It can be offered face to face or by mail, fax or e-mail, as long as delivery can be validated.

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

Because case, the company must post a notification in the workplace (where it will be seen by the staff members) setting out the names, seniority and task category of those workers the company means to end and the date of the proposed termination. The posting of the notification is considered to be notification of termination, since the date of the publishing, to an employee who is “bumped” by a staff member named in the notice. However, this notice of termination should still fulfill the length requirements set out in the ESA.

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

Termination pay

An employee who does not get the written notification required under the ESA should be offered termination pay in lieu of notification. Termination pay is a lump amount payment equivalent to the routine salaries for a regular work week that a staff member would otherwise have actually been entitled to throughout the written notification period. A worker earns getaway pay on their termination pay. Employers need to likewise continue to make whatever contributions would be required to preserve the benefits the employee would have been entitled to had they continued to be used through the notice period.

Example: Regular work week

Sarah has worked for three and a half years. Now her job has been gotten rid of and her employment has been ended. Sarah was not offered any written notification of termination.

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

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

$ 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 getaway 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 employer must likewise make sure continued coverage for any advantage or pension that applied to her for 3 weeks.

Example: No routine work week

Gerry has operated at a nursing home for 4 years. He works weekly, however his hours vary from week to week. His rate of pay is $25.00 an hour, and he is paid 6 percent trip pay.

Gerry’s employer eliminated his position and did not offer Gerry any written notification of termination. Gerry was ill and off work for 2 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 work ended.

Gerry is entitled to four weeks of termination pay.

Gerry’s typical profits each week are calculated:

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

His termination pay is computed:

$ 180.00 × 4 weeks = $720.00

Then his vacation 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 company must also ensure continued coverage for any benefit or pension that applied to him for four weeks.

When to pay termination pay

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

Mass termination

Special guidelines for notice of termination might use in cases of mass termination (when a company is terminating 50 or more staff members at its establishment within a four-week period).

Meaning of “facility”

An “establishment” is an area at which the employer continues organization. Separate locations can be thought about one establishment if either:

– they lie within the same municipality, or

– a staff member at one area has contractual seniority rights that reach the other area, enabling the employee to displace another worker (also called “bumping rights”).

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

This will require that workers who work exclusively remotely be considered for inclusion in the count when figuring out whether 50 or more staff members have actually been terminated.

Note that where an employee carries out work both from their home and from another location where the company brings on business (for example, an office), employment their home is not consisted of in the definition of “establishment”. Instead, the worker is thought about to have a connection to the workplace location and, therefore, for the function of mass termination, the staff member is consisted of with respect to that workplace place.

Example: where several areas are considered one “facility”

ABC Company has a workplace and a storage facility situated in London, ON. Sabrina lives in London and works for ABC Company specifically from another location: she performs work for the company from home and does not work at the office.

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

Employer commitments in a mass termination

When a mass termination happens, the employer should complete and provide the Form 1 (Notice of termination of employment) 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 office on a day and at a time when it is open.

– mail shipment 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 workers is ruled out to have been given up until the Form 1 is gotten by the Director; simply put, notification of mass termination is not effective up until the Director gets the Form 1.

In addition to supplying workers with private notices of termination, the company must, on the very first day of the notice period:

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

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

The amount of notice employees should get in a mass termination is not based on the workers’ length of work, however on the variety of employees who have been terminated. A company should give:

– 8 weeks see if the employment of 50 to 199 workers is to be terminated

– 12 weeks discover if the employment of 200 to 499 employees is to be terminated

– 16 weeks observe if the work of 500 or more staff members is to be terminated

Exception to the mass termination rules

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

– the variety of employees whose employment is being ended represents not more than 10 per cent of the staff members who have been used for at least 3 months at the facility

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

Mass termination: resignation by a staff member

An employee who has gotten termination notice under the mass termination guidelines who wishes to resign before the termination date supplied in the employer’s notification should offer the company at least one week’s written notification of resignation if the worker has actually been used for less than two years. If the employment duration has actually been two years or more, the worker needs to offer a minimum of 2 weeks’ written notification of resignation. However, the employee does not need to give notification of resignation if the employer constructively dismisses the employee or breaches a term of the agreement.

Temporary work after termination date in notice

An employer can offer work to a worker who has been offered notice of termination on a short-lived basis in the 13-week duration after the termination date set out in the notice without impacting the original date of the termination and without being needed to provide any additional notice of termination to the employee when the short-lived work ends.

If an employee works beyond the 13-week period after the termination date and then has their work terminated, the worker will be entitled to a new composed notification of termination as if the previous notice had never ever been provided. The employee’s period of work will then also include 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 typically discovered in collective contracts.

A worker who has recall rights and who is entitled to termination pay due to the fact that of a layoff of 35 weeks or more may pick to:

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

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

If a staff member is entitled to both termination pay and severance pay, they need to make the very same choice for both.

If a worker who is not represented by a trade union elects to keep their recall rights or employment stops working to choose, employment the employer needs to send the amount 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 elects to keep their recall rights or fails to make an option, the company and the trade union should try to come to a plan to hold the termination pay (and discontinuance wage, if any) in trust for the employee. If they can not come to an arrangement, and the trade union recommends the employer and the Director of Employment Standards in writing that efforts have actually stopped working, the company must send the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If a worker chooses to give up their recall rights or if the recall rights expire, the money that is held in trust needs to be sent to the worker.

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

Exemptions to notice of termination or termination pay

A number of these exemptions are intricate. Please call the Employment Standards Information Centre, 1-800-531-5551, if you require more information. Please likewise refer to the unique rule tool.

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

– is guilty of wilful misconduct, disobedience or wilful neglect of task that is not insignificant and has actually not been excused by the employer. Note: “wilful” includes when an employee planned the resulting effect 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 generally ruled out wilful;

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

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

– the work continues for 3 months or more after the term ends or the job is finished;

See likewise: Employment Standards Self-Service Tool

Wrongful termination

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

The guidelines under the ESA about termination and severance of employment are minimum requirements. Some workers might have rights under the common law that are higher than the rights to discover of termination (or termination pay) and discontinuance wage under the ESA. An employee may want to sue their former company in court for “wrongful dismissal”. Employees should understand that they can not take legal action against an employer for wrongful dismissal and sue for termination pay or discontinuance wage with the ministry for the same termination or severance of employment. A staff member must choose one or the other. Employees might wish to obtain legal guidance worrying their rights.