Termination Of Employment

A variety of expressions are typically utilized to explain circumstances when work is ended. These consist of “let go,” “released,” “dismissed,” “fired” and “permanently laid off.”

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

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

– “constructively” dismisses an employee and the staff member resigns, employment in response, within a sensible time;

– lays a worker off for a period that is longer than a “temporary layoff”.

In many cases, when a company ends the employment of a worker who has actually been continually used for 3 months, the employer needs to provide the employee with either composed notification of termination, termination pay or a mix (as long as the notification and the number of weeks of termination pay together equivalent the length of notice the worker is entitled to receive).

The ESA does not need a company to provide a worker a reason that their employment is being terminated. There are, nevertheless, some situations where a company can not end an employee’s work even if the employer is prepared to provide correct composed notice or termination pay. For example, a company can not end someone’s work, or penalize them in any other way, if any part of the factor for the termination of employment is based on the staff member asking concerns about the ESA or working out a right under the ESA, such as refusing to work in excess of the everyday or weekly hours of work maximums, or taking a leave of lack defined in the ESA. Please see the chapter on reprisals.

Receiving termination notification or pay in lieu

Certain workers are not entitled to discover of termination or termination pay under the ESA. Examples include: workers who are guilty of wilful misbehavior, disobedience, or wilful neglect of task that is not trivial and has not been condoned by the employer. Other examples consist of construction employees, workers on momentary layoff, employees who decline an offer of affordable alternative employment and staff members who have been employed less than three months.

There are a number of other exemptions to the termination of employment provisions of the ESA. See “Exemptions to see of termination or termination pay.” Please likewise refer to the special guideline tool.

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

Constructive termination

A constructive dismissal might take place when a company makes a substantial modification to a fundamental term or condition of a staff member’s work without the worker’s real or implied consent.

For example, a staff member might be constructively dismissed if the employer makes modifications to the worker’s conditions of work that result in a significant reduction in income or a significant negative change in such things as the staff member’s work location, employment hours of work, authority, or position. Constructive dismissal might also consist of scenarios where an employer bothers or abuses a worker, or an employer offers a worker a final notice to “give up or be fired” and the staff member resigns in reaction.

The staff member would need to resign in action to the change within an affordable amount of time in order for the employer’s actions to be considered a termination of work for functions of the ESA.

Constructive dismissal is a complex and hard topic. To find out more on useful dismissal, please contact the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A worker is on short-lived layoff when an employer cuts down or stops the staff member’s work without ending their work (for example, laying somebody off sometimes when there is not adequate work to do). The simple truth that the employer does not define a recall date when laying the employee off does not necessarily imply that the lay-off is not short-term. Note, nevertheless, that a lay-off, even if meant to be short-term, might lead to constructive dismissal if it is not allowed by the work agreement.

For the purposes of the termination provisions of the ESA, a “week of layoff” is a week in which the worker 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 since the worker was unable or available to work, was subject to disciplinary suspension, or was not supplied with work because of a strike or lockout at their location of work or elsewhere.

Employers are not required under the ESA to offer staff members with a composed notification of a short-lived layoff, nor do they need to offer a factor for the lay-off. (They may, however, be needed to do these things under a cumulative agreement or a work contract.)

Under the ESA, employment a “temporary 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 consecutive weeks, but less than 35 weeks of layoff in any period of 52 successive weeks, where:- the staff member continues to get substantial payments from the company;
or

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

– the employee receives extra welfare;
or

– the worker would be entitled to receive supplemental joblessness benefits however isn’t getting them due to the fact that they are utilized in other places;
or

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

– the employer remembers the worker within the time frame set out in an agreement with a worker who is not represented by a trade union;
or

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

If a staff member is laid off for a duration longer than a short-lived layoff as set out above, the company is thought about to have ended the staff member’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 end the work of a worker who has actually been utilized constantly for three months or more if either:

– the employer has actually provided the employee proper composed notification of termination and the notice duration has ended

– the employer pays termination pay to the employee where no written notification or less notification than is needed is provided

Written notification of termination

A worker is entitled to observe of termination (or termination pay rather of notice) if they have actually been continuously employed for a minimum of three months. An individual is thought about “used” not only while they are actively working, however likewise during any time in which they are not working however the work relationship still exists (for instance, time in which the employee is off sick or on leave or on lay-off).

The amount of notification to which a worker is entitled depends upon their “duration of work”. A worker’s period of employment includes not just all time while the worker is actively working however 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-lived lay-off, the staff member’s work is deemed (or thought about) to have actually been terminated on the first day of the lay-off-any time after that does not count as part of the worker’s duration of work, despite the fact that the worker may still be utilized for purposes of the “continuously employed for three months” credentials

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

It is possible, in some situations, for an individual to have been “constantly employed” for three months or more and yet have a period of work of less than 3 months. In such circumstances, the staff member would be entitled to see since a worker who has actually been continuously used for at least 3 months is entitled to discover, and the minimum notification privilege of one week applies to a worker with a period of employment of any length less than one year.

The following chart defines the quantity of notice required:

Note: Special rules figure out the amount of notification required in the case of mass terminations – where the employment of 50 or more workers is terminated at an employer’s facility within a four-week duration.

Requirements during the statutory notice duration

During the statutory notice duration, a company must:

– not minimize the worker’s wage rate or modify any other term or condition of work;

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

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

Regular rate

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

Regular salaries

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

Regular work week

For a worker who generally works the very same variety of hours every week, a routine work week is a week of that lots of hours, not consisting of overtime hours.

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

A company is not enabled to schedule an employee’s vacation time throughout the statutory notice period unless the employee-after getting composed notification of termination of employment-agrees to take their holiday time during the notice duration.

If an employer supplies 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 provide written notice

Most of the times, composed notification of termination of work need to be resolved to the worker. It can be supplied personally or by mail, fax or e-mail, as long as delivery can be verified.

There are special rules for providing notification of termination if a staff member has a contract of work or a collective contract that offers seniority rights that enable a worker who is to be laid off or whose employment is to be terminated to displace (” bump”) other staff members.

Because case, the employer must post a notification in the office (where it will be seen by the workers) setting out the names, seniority and job classification of those workers the company means 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 posting, to a staff member 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 also unique guidelines regarding how notification is offered when there is a mass termination.

Termination pay

An employee who does not receive the composed notification needed under the ESA should be given termination pay in lieu of notification. Termination pay is a swelling sum payment equivalent to the routine salaries for a routine work week that an employee would otherwise have been entitled to throughout the written notice duration. An employee makes getaway pay on their termination pay. Employers need to likewise continue to make whatever contributions would be required to keep the benefits the staff member would have been entitled to had they continued to be utilized through the notification duration.

Example: Regular work week

Sarah has actually worked for three and a half years. Now her task has actually been gotten rid of and her employment has actually been ended. Sarah was not given any composed notification of termination.

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

Sarah’s routine earnings 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 computed:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The employer should also guarantee ongoing coverage for any advantage or pension that used to her for 3 weeks.

Example: No regular work week

Gerry has worked at an assisted living home for 4 years. He works every week, but his hours vary from week to week. His rate of pay is $25.00 an hour, and he is paid 6 percent vacation pay.

Gerry’s company removed his position and did not give Gerry any written notification of termination. Gerry was ill and off work for two of the 12 weeks immediately 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 4 weeks of termination pay.

earnings each week are calculated:

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

His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00

Then his vacation pay on his termination pay is computed:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company must likewise ensure continued coverage for any benefit or pension plans that applied to him for 4 weeks.

When to pay termination pay

Termination pay need to be paid to an employee either 7 days after the worker’s work is terminated or on the staff member’s next routine pay date, whichever is later.

Mass termination

Special rules for notice of termination may use in cases of mass termination (when an employer is ending 50 or more staff members at its facility within a four-week period).

Meaning of “facility”

An “establishment” is a location at which the employer carries on business. Separate areas can be thought about one establishment if either:

– they lie within the same municipality, or

– an employee at one area has legal seniority rights that extend to the other area, enabling the employee to displace another staff member (likewise 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 staff member works from home and does not operate at any other location where the employer continues service.

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

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

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

ABC Company has a workplace and a warehouse located in London, ON. Sabrina lives in London and works for ABC Company exclusively remotely: she performs 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 storage facility and Sabrina’s London home are considered one “facility.”

Employer responsibilities in a mass termination

When a mass termination takes place, the employer should finish and provide the Form 1 (Notice of termination of work) to the Director of Employment Standards (Director) by:

– email to esa_form1_notice@ontario.ca.

– fax to (416) 326-7061.

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

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

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

Any notification to the affected staff members is not considered to have actually been given up until the Form 1 is gotten by the Director; to put it simply, notification of mass termination is ineffective up until the Director gets the Form 1.

In addition to providing staff members with specific notifications of termination, the employer must, on the very first day of the notice duration:

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

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

The amount of notice employees need to receive in a mass termination is not based on the employees’ length of work, however on the variety of employees who have been terminated. An employer needs to provide:

– 8 weeks observe if the employment of 50 to 199 staff members is to be ended

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

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

Exception to the mass termination rules

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

– the number of workers whose work is being terminated represents not more than 10 per cent of the employees who have actually been utilized for at least 3 months at the facility

– none of the terminations are triggered by the irreversible discontinuance of all or employment part of the employer’s organization at the establishment

Mass termination: resignation by a staff member

An employee who has received termination notice under the mass termination rules who wishes to resign before the termination date offered in the employer’s notification need to give the company a minimum of one week’s composed notice of resignation if the worker has actually been utilized for less than two years. If the employment duration has actually been two years or more, the worker needs to give at least 2 weeks’ composed notification of resignation. However, the staff member does not need to notify of resignation if the company constructively dismisses the employee or breaches a term of the contract.

Temporary work after termination date in notification

An employer can provide work to a worker who has been offered notification of termination on a short-term basis in the 13-week period after the termination date set out in the notification without affecting the original date of the termination and without being required to supply any further notification of termination to the worker when the short-term 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 written notification of termination as if the previous notice had actually never been offered. The employee’s duration of employment will then likewise include the duration of short-term work.

Recall rights

A “recall right” is the right of an employee on a layoff to be called back to work by their company under a term or condition of employment. This right is typically discovered in collective arrangements.

A worker who has recall rights and who is entitled to termination pay because 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 discontinuance wage) 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 must make the very same choice for both.

If a staff member who is not represented by a trade union elects to keep their recall rights or fails to make an option, employment the company must send the quantity of the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the money in trust.

If an employee who is represented by a trade union chooses to keep their recall rights or stops working to choose, employment the employer and the trade union should attempt to come to a plan to hold the termination pay (and discontinuance wage, if any) in trust for the employee. If they can not concern a plan, and the trade union advises the employer and the Director of Employment Standards in writing that efforts have actually failed, the employer must send the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.

If an employee chooses to quit their recall rights or employment if the recall rights expire, the cash that is held in trust needs to be sent to the employee.

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

Exemptions to see of termination or termination pay

A number of these exemptions are intricate. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you need more details. Please also describe the unique guideline 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 disregard of responsibility that is not insignificant and has not been condoned by the company. Note: “wilful” includes when a worker intended the resulting repercussion or acted recklessly if they understood or need to have understood the effects their conduct would have. Poor work conduct that is unexpected or unintentional is typically not thought about wilful;

– was employed for a specific length of time or until the completion of a specific job. However, such a staff member will be entitled to notice of termination or termination pay if:- the work ends before the term expires or the job is finished; or

– the term ends or the task is not completed more than 12 months after the employment started; or

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

See also: Employment Standards Self-Service Tool

Wrongful termination

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 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 want to sue their former employer in court for “wrongful dismissal”. Employees must be aware that they can not sue an employer for wrongful dismissal and sue for termination pay or severance pay with the ministry for the same termination or severance of employment. A staff member must pick one or the other. Employees may want to obtain legal suggestions worrying their rights.