Termination Of Employment

A variety of expressions are commonly used to explain circumstances when employment is terminated. These consist of “let go,” “released,” “dismissed,” “fired” and “permanently laid off.”

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

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

– “constructively” dismisses an employee and the employee resigns, in reaction, within a reasonable time;

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

In most cases, when an employer ends the employment of a worker who has actually been continuously utilized for 3 months, the employer needs to provide the employee with either written notification of termination, termination pay or a mix (as long as the notification and the number of weeks of termination pay together equal the length of notice the staff member is entitled to get).

The ESA does not need a company to offer a staff member a reason their work is being terminated. There are, however, some circumstances where an employer can not terminate a worker’s work even if the company is prepared to offer correct written notice or termination pay. For instance, an employer can not end someone’s employment, or punish them in any other method, if any part of the factor for the termination of work is based on the worker asking concerns about the ESA or exercising a right under the ESA, such as declining to work in excess of the day-to-day or weekly hours of work maximums, or taking a leave of lack defined in the ESA. Please see the chapter on reprisals.

Getting approved for termination notice or pay in lieu

Certain workers are not entitled to discover of termination or termination pay under the ESA. Examples consist of: staff members who are guilty of wilful misbehavior, disobedience, or wilful neglect of duty that is not unimportant and has actually not been excused by the company. Other examples consist of building and construction staff members, workers on temporary layoff, staff members who decline a deal of affordable alternative work and staff members who have actually been employed less than 3 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 also describe the unique rule tool.

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

Constructive dismissal

A useful termination might take place when a company makes a substantial change to a fundamental term or condition of a staff member’s employment without the employee’s real or implied authorization.

For instance, a staff member may be constructively dismissed if the employer makes changes to the employee’s conditions of employment that lead to a substantial reduction in salary or a significant negative modification in such things as the employee’s work location, hours of work, authority, or position. Constructive termination may also consist of situations where an employer pesters or abuses a staff member, or an offers a worker a demand to “stop or be fired” and referall.us the worker resigns in reaction.

The employee would need to resign in response to the modification within an affordable amount of time in order for the employer’s actions to be thought about a termination of employment for purposes of the ESA.

Constructive termination is a complex and tough subject. For additional information on useful termination, please call the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A worker is on short-term layoff when an employer cuts back or stops the worker’s work without ending their employment (for instance, laying somebody off at times when there is insufficient work to do). The simple reality that the company does not specify a recall date when laying the employee off does not always imply that the lay-off is not temporary. Note, however, that a lay-off, even if intended to be temporary, might lead to positive dismissal if it is not enabled by the employment agreement.

For the functions of the termination arrangements of the ESA, a “week of layoff” is a week in which the worker made less than half of what they would generally earn (or earns typically) in a week.

A week of layoff does not consist of any week in which the worker did not work for several days since the worker was not able or readily available to work, underwent disciplinary suspension, or was not offered with work due to the fact that of a strike or lockout at their place of work or elsewhere.

Employers are not needed under the ESA to supply staff members 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 agreement or a work agreement.)

Under the ESA, a “short-term 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, however less than 35 weeks of layoff in any period of 52 successive weeks, where:- the employee continues to receive significant payments from the employer;
or

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

– the worker receives additional joblessness benefits;
or

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

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

– the company recalls the staff member within the time frame set out in an arrangement 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 company recalls a worker who is represented by a trade union within the time set out in a contract between the union and the company.

If a worker is laid off for a period longer than a temporary layoff as set out above, the employer is considered to have terminated the employee’s employment. Generally, the staff member will then be entitled to termination pay.

Written notification of termination and termination pay

Under the ESA, a company can terminate the employment of a worker who has been utilized constantly for three months or more if either:

– the company has actually provided the worker appropriate composed notice of termination and the notice duration has expired

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

Written notice of termination

A staff member is entitled to see of termination (or termination pay instead of notice) if they have been continuously employed for at least 3 months. A person is considered “utilized” not just 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 quantity of notice to which a worker is entitled depends on their “duration of employment”. A staff member’s period of employment includes not just perpetuity while the employee is actively working however also 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 staff member’s work 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 staff member’s duration of employment, although the worker may still be employed for functions of the “constantly utilized for 3 months” qualification

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

It is possible, in some situations, for an individual to have actually been “continually used” for 3 months or more and yet have a duration of work of less than 3 months. In such scenarios, the staff member would be entitled to see since a worker who has actually been continuously utilized for at least 3 months is entitled to notice, and the minimum notice entitlement of one week uses to an employee with a period of work of any length less than one year.

The following chart specifies the quantity of notice required:

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

Requirements throughout the statutory notification period

During the statutory notification duration, a company needs to:

– not lower the staff member’s wage rate or modify any other term or condition of employment;

– continue to make whatever contributions would be required to maintain the worker’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 regular work week weekly.

Regular rate

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

Regular earnings

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

Regular work week

For a staff member who generally works the same variety of hours each week, a routine work week is a week of that many hours, not consisting of overtime hours.

Some employees do not have a routine work week. That is, they do not work the same number of hours weekly or they are paid on a basis other than time. For these staff members, the “regular salaries” for a “regular work week” is the typical quantity of the regular salaries earned by the employee in the weeks in which the employee worked throughout the duration of 12 weeks right away preceding the date the notification was given.

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

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

How to offer written notice

In many cases, written notification of termination of employment need to be dealt with to the staff member. It can be supplied personally or by mail, fax or email, as long as delivery can be validated.

There are unique guidelines for supplying notice of termination if an employee has an agreement of employment or a collective agreement that provides seniority rights that enable an employee who is to be laid off or whose employment is to be terminated to displace (” bump”) other employees.

Because case, the employer must post a notice in the work environment (where it will be seen by the employees) setting out the names, seniority and job category of those employees the employer means to end and the date of the proposed termination. The posting of the notification is considered to be notification of termination, as of the date of the posting, to an employee who is “bumped” by a staff member named in the notification. However, this notice of termination should still meet the length requirements set out in the ESA.

There are likewise unique rules regarding how notice is supplied when there is a mass termination.

Termination pay

An employee who does not get the composed notice needed under the ESA needs to be offered termination pay in lieu of notice. Termination pay is a swelling sum payment equal to the regular salaries for a regular work week that an employee would otherwise have been entitled to during the written notice duration. A staff member makes holiday pay on their termination pay. Employers must likewise continue to make whatever contributions would be needed to keep the advantages the employee would have been entitled to had they continued to be utilized through the notice duration.

Example: Regular work week

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

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

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

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

Her termination pay is calculated:

$ 800.00 X 3 weeks = $2,400.00

Then her getaway pay on her termination pay is determined:

4% of $2,400.00 = $96.00

Finally, her trip pay is added to her termination pay:

$ 2400.00 + $96.00 = $2,496.00

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

Example: No regular work week

Gerry has actually worked at a nursing 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 per cent trip pay.

Gerry’s company removed his position and did not offer Gerry any composed notification of termination. Gerry was ill and off work for 2 of the 12 weeks right away preceding the day his work was ended. Gerry earned $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 average earnings weekly are determined:

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

His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00

Then his getaway pay on his termination pay is computed:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company needs to also guarantee continued protection for any benefit or pension strategies that applied to him for four weeks.

When to pay termination pay

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

Mass termination

Special rules for notification of termination might use in cases of mass termination (when an employer is terminating 50 or more workers at its facility within a four-week duration).

Meaning of “establishment”

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

– they are located within the same town, or

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

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

This will require that employees who work exclusively from another location be thought about for inclusion in the count when figuring out whether 50 or more staff members have actually been ended.

Note that where a worker performs work both from their home and from another area where the employer carries on organization (for example, a workplace), their home is not included in the meaning of “facility”. Instead, the worker is thought about to have a connection to the workplace place and, therefore, for the function of mass termination, the worker is included with regard to that office place.

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

ABC Company has a workplace and a storage facility located in London, ON. Sabrina resides in London and works for ABC Company exclusively 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 considered one “establishment.”

Employer responsibilities in a mass termination

When a mass termination occurs, the company needs to finish and deliver 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 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 delivery can be confirmed.

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

Any notice to the affected employees is ruled out to have been offered till the Form 1 is gotten by the Director; to put it simply, notification of mass termination is not reliable up until the Director receives the Form 1.

In addition to providing employees with individual notifications of termination, the employer must, on the first day of the notification duration:

– post a copy of the Form 1 supplied to the Director in the workplace where it will come to the attention of the affected workers.

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

The quantity of notice workers must receive in a mass termination is not based on the employees’ length of work, however on the variety of workers who have actually been terminated. A company should provide:

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

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

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

Exception to the mass termination rules

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

– the variety of employees whose work is being terminated represents not more than 10 percent of the workers who have been used for a minimum of three months at the establishment

– none of the terminations are triggered by the permanent discontinuance of all or part of the employer’s business at the facility

Mass termination: resignation by a worker

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

Temporary work after termination date in notification

An employer can offer work to a staff member who has actually been notified of termination on a short-term basis in the 13-week period after the termination date set out in the notification without impacting the original date of the termination and without being required to supply any additional notice of termination to the staff member when the short-term work ends.

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

Recall rights

A “recall right” is the right of a staff member on a layoff to be called back to work by their company under a term or condition of work. This right is frequently discovered in cumulative agreements.

A worker who has recall rights and who is entitled to termination pay because of a layoff of 35 weeks or more might select 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 discontinuance wage).

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

If a staff member who is not represented by a trade union chooses to keep their recall rights or stops working to decide, the employer must send the amount of the termination pay (and severance pay, 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 must attempt to come to an arrangement to hold the termination pay (and discontinuance wage, if any) in trust for the employee. If they can not come to a plan, and the trade union recommends the employer and the Director of Employment Standards in composing that efforts have actually 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 staff member picks to quit their recall rights or if the recall rights expire, the money that is held in trust must be sent to the worker.

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

Exemptions to discover of termination or termination pay

A lot of these exemptions are complex. Please call the Employment Standards Information Centre, 1-800-531-5551, if you need more info. Please likewise describe the unique guideline tool.

The notification of termination and termination pay requirements of the ESA do not apply to an employee who:

– is guilty of wilful misconduct, disobedience or wilful overlook of responsibility that is not unimportant and has not been condoned by the employer. Note: “wilful” consists of when a staff member planned the resulting consequence or acted recklessly if they understood or ought to have understood the results their conduct would have. Poor work conduct that is accidental or unintentional is generally not thought about wilful;

– was worked with for a specific length of time or up until the completion of a specific task. However, such a worker will be entitled to see of termination or termination pay if:- the employment ends before the term expires or the task is completed; or

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

– the employment continues for three months or more after the term ends or the task is completed;

See likewise: Employment Standards Self-Service Tool

Wrongful termination

Rights greater than ESA notification of termination, termination pay, severance pay

The guidelines under the ESA about termination and severance of work are minimum requirements. Some workers might have rights under the common law that are greater than the rights to notice of termination (or termination pay) and severance pay under the ESA. An employee might wish to sue their previous employer in court for “wrongful termination”. Employees need to be mindful that they can not sue an employer for wrongful termination and sue for termination pay or severance pay with the ministry for the very same termination or severance of employment. An employee should select one or the other. Employees may want to acquire legal advice worrying their rights.