Termination Of Employment

A number of expressions are typically used to describe scenarios when work is terminated. These consist of “release,” “released,” “dismissed,” “fired” and “permanently laid off.”

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

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

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

– lays a staff member off for a duration that is longer than a “temporary layoff”.

For the most part, when an employer ends the employment of a worker who has actually been continually employed for 3 months, the employer must offer the staff member with either written notification of termination, termination pay or a combination (as long as the notification and the number of weeks of termination pay together equivalent the length of notice the employee is entitled to receive).

The ESA does not require an employer to give an employee a reason that their employment is being terminated. There are, however, some situations where a company can not terminate a worker’s employment even if the employer is prepared to offer correct written notice or termination pay. For instance, an employer can not end someone’s work, or penalize them in any other method, if any part of the reason for the termination of employment is based on the employee asking concerns about the ESA or working out a right under the ESA, such as declining to work in excess of the everyday or weekly hours of work maximums, or taking a leave of absence defined in the ESA. Please see the chapter on reprisals.

Receiving termination notification or pay in lieu

Certain employees are not entitled to observe of termination or termination pay under the ESA. Examples include: staff members who are guilty of wilful misbehavior, disobedience, or wilful overlook of task that is not insignificant and has not been condoned by the employer. Other examples include construction workers, employees on short-term layoff, employees who decline an offer of sensible alternative employment and staff members who have 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 notice of termination or termination pay.” Please also describe the special rule tool.

The termination-of-employment rules are completely separate from any privileges an employee might need to be paid discontinuance wage under the ESA.

Constructive dismissal

A useful termination might occur when a company makes a significant modification to a fundamental term or condition of a worker’s work without the employee’s real or implied approval.

For instance, a staff member might be constructively dismissed if the company makes modifications to the staff member’s terms and conditions of work that lead to a substantial reduction in income or a considerable negative modification in such things as the staff member’s work location, hours of work, authority, or position. Constructive dismissal might also include situations where an employer harasses or abuses an employee, or a company offers a staff member an ultimatum to “stop or be fired” and the staff member resigns in action.

The worker would need to resign in action to the change within a sensible amount of time in order for the company’s actions to be thought about a termination of employment for functions of the ESA.

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

Temporary layoff

An employee is on temporary layoff when a company cuts down or stops the employee’s work without ending their employment (for instance, laying somebody off sometimes when there is not adequate work to do). The mere fact that the employer does not specify a recall date when laying the worker off does not necessarily indicate that the lay-off is not short-term. Note, nevertheless, that a lay-off, even if meant to be momentary, might result in positive dismissal if it is not permitted by the employment agreement.

For the functions of the termination provisions of the ESA, a “week of layoff” is a week in which the employee made less than half of what they would generally make (or makes usually) in a week.

A week of layoff does not include any week in which the employee did not work for several days because the staff member was not able or offered to work, underwent disciplinary suspension, or was not supplied with work because of a strike or lockout at their place of work or somewhere else.

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

Under the ESA, a “momentary layoff” can last:

1. not more than 13 weeks of layoff in any period of 20 consecutive weeks;
or

2. more than 13 weeks in any duration of 20 successive weeks, but less than 35 weeks of layoff in any period of 52 successive weeks, where:- the staff member continues to get significant payments from the employer;
or

– the employer continues to pay for the benefit of the worker under a genuine group or employee insurance coverage strategy (such as a medical or drug insurance strategy) or a genuine retirement or pension plan;
or

– the staff member gets supplemental joblessness advantages;
or

– the employee would be entitled to receive additional unemployment benefits but isn’t getting them due to the fact that they are employed somewhere else;
or

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

– the company recalls the worker 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 remembers a worker who is represented by a trade union within the time set out in a contract between the union and the employer.

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

Written notice of termination and termination pay

Under the ESA, an employer can terminate the employment of a worker who has been employed continually for 3 months or more if either:

– the company has offered the employee correct written notification of termination and the notice period has actually ended

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

Written notification of termination

A staff member is entitled to see of termination (or termination pay rather of notice) if they have been constantly for a minimum of 3 months. A person is thought about “used” not only while they are actively working, however also throughout at any time in which they are not working but the work relationship still exists (for example, time in which the worker is off sick or on leave or on lay-off).

The quantity of notice to which an employee is entitled depends upon their “duration of work”. A staff member’s duration of employment consists of not only perpetuity while the worker is actively working but likewise 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 temporary lay-off, the staff member’s employment is considered (or considered) to have been ended on the very first day of the lay-off-any time after that does not count as part of the employee’s period of employment, despite the fact that the employee might still be used for functions of the “constantly used for three months” qualification

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

It is possible, in some circumstances, for an individual to have actually been “continually used” for 3 months or more and yet have a duration of employment of less than three months. In such circumstances, the worker would be entitled to notice due to the fact that an employee who has been constantly used for a minimum of 3 months is entitled to observe, and the minimum notification privilege of one week uses to a staff member with a duration of work of any length less than one year.

The following chart defines the quantity of notice required:

Note: Special rules identify the quantity of notice needed in the case of mass terminations – where the work of 50 or more employees is ended at a company’s facility within a four-week period.

Requirements throughout the statutory notification period

During the statutory notice period, a company needs to:

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

– continue to make whatever contributions would be required to maintain the staff member’s benefits plans; and

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

Regular rate

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

Regular earnings

These are wages besides overtime pay, getaway pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of task pay, termination pay and discontinuance wage and specific legal entitlements.

Regular work week

For a staff member who normally works the exact same number of hours every week, a regular work week is a week of that lots of hours, not including 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 staff members, the “regular incomes” for a “regular work week” is the typical amount of the routine earnings earned by the worker in the weeks in which the worker worked throughout the duration of 12 weeks instantly preceding the date the notification was provided.

An employer is not allowed to set up a staff member’s trip time during the statutory notice period unless the employee-after getting composed notice of termination of employment-agrees to take their holiday time during the notice duration.

If a company provides longer notice than is needed, the statutory part of the notice period is the tail end of the period that ends on the date of termination.

How to supply written notice

In many cases, composed notice of termination of work should be dealt with to the worker. It can be supplied personally or by mail, fax or email, as long as delivery can be validated.

There are unique guidelines for offering notice of termination if a worker has an agreement of work or a collective arrangement that provides seniority rights that enable a staff member who is to be laid off or whose employment is to be ended to displace (” bump”) other workers.

Because case, the company must publish a notification in the work environment (where it will be seen by the staff members) setting out the names, seniority and task category of those staff members the employer intends to terminate and the date of the proposed termination. The posting of the notice is thought about to be notification of termination, since the date of the publishing, to a worker who is “bumped” by an employee called in the notice. However, this notice of termination must still satisfy the length requirements set out in the ESA.

There are also unique rules relating to how notification is offered when there is a mass termination.

Termination pay

A staff member who does not receive the written notice required under the ESA must be given termination pay in lieu of notice. Termination pay is a lump amount payment equal to the routine wages for a routine work week that a staff member would otherwise have been entitled to throughout the written notification period. An employee makes vacation pay on their termination pay. Employers must 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 employed through the notification period.

Example: Regular work week

Sarah has actually worked for three and a half years. Now her job has actually been eliminated and referall.us her employment has actually been terminated. Sarah was not given any written notice of termination.

Sarah worked 40 hours a week weekly and was paid $20.00 an hour. She likewise received 4 per cent vacation 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 routine wages for a routine work week are determined:

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

Her termination pay is determined:

$ 800.00 X 3 weeks = $2,400.00

Then her vacation pay on her termination pay is computed:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

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

Example: No routine work week

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

Gerry’s employer removed his position and did not provide Gerry any composed notification of termination. Gerry was ill and off work for two of the 12 weeks instantly preceding the day his employment was terminated. Gerry earned $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 average profits weekly are computed:

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

His termination pay is determined:

$ 180.00 × 4 weeks = $720.00

Then his getaway pay on his termination pay is calculated:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company should likewise make sure continued coverage for any benefit or pension that used to him for 4 weeks.

When to pay termination pay

Termination pay need to be paid to a staff member either seven days after the staff member’s work is ended or on the employee’s next regular pay date, whichever is later on.

Mass termination

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

Meaning of “facility”

An “facility” is a location at which the employer continues company. Separate areas can be considered one establishment if either:

– they are situated within the very same municipality, or

– a staff member at one area has legal seniority rights that encompass the other place, permitting the worker to displace another worker (likewise called “bumping rights”).

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

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

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

Example: where multiple places are thought about one “facility”

ABC Company has an office and a storage facility situated in London, ON. Sabrina resides in London and works for ABC Company exclusively from another location: she carries out work for the company from home and does not work at the workplace.

For the purpose of mass termination, the company’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 happens, the company should complete and provide the Form 1 (Notice of termination of work) to the Director of Employment Standards (Director) by:

– e-mail 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 shipment 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 notification to the impacted staff members is ruled out to have actually been offered till the Form 1 is received by the Director; to put it simply, notification of mass termination is ineffective until the Director receives the Form 1.

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

– post a copy of the Form 1 provided to the Director in the workplace where it will concern the attention of the impacted staff members.

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

The quantity of notice workers must get in a mass termination is not based upon the staff members’ length of employment, but on the variety of staff members who have actually been ended. A company should give:

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

– 12 weeks notice if the work of 200 to 499 workers is to be terminated

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

Exception to the mass termination guidelines

The mass termination rules do not use if these 2 things apply:

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

– none of the terminations are brought on by the irreversible discontinuance of all or part of the employer’s business at the establishment

Mass termination: resignation by an employee

A staff member who has gotten termination notification under the mass termination rules who wishes to resign before the termination date supplied in the employer’s notification need to give the company at least one week’s written notification of resignation if the employee has actually been used for less than 2 years. If the employment period has been 2 years or more, the staff member must offer at least two weeks’ composed notice of resignation. However, the staff member does not have to notify of resignation if the employer constructively dismisses the worker or breaches a regard to the agreement.

Temporary work after termination date in notice

A company can offer work to an employee 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 needed to offer any further notification of termination to the employee when the temporary work ends.

If an employee works beyond the 13-week duration after the termination date and after that has their employment terminated, the staff member will be entitled to a new composed notification of termination as if the previous notice had actually never been offered. The worker’s duration of employment will then likewise consist of the period of short-lived work.

Recall rights

A “recall right” is the right of a worker on a layoff to be recalled to work by their employer under a term or condition of work. This right is commonly found in collective 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 severance pay) at that time;
or

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

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

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

If a staff member who is represented by a trade union elects to keep their recall rights or stops working to decide, the company and the trade union need to 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 pertain to an arrangement, and the trade union advises the company and the Director of Employment Standards in composing that efforts have failed, the company must send out the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the money in trust.

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

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

Exemptions to discover of termination or termination pay

Many of these exemptions are complicated. Please contact the Employment Standards Information Centre, 1-800-531-5551, if you require more information. Please likewise describe the special guideline tool.

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

– is guilty of wilful misbehavior, disobedience or wilful disregard of duty that is not trivial and has actually not been condoned by the company. Note: “wilful” includes when a staff member intended the resulting effect or acted recklessly if they knew or ought to have understood the results their conduct would have. Poor work conduct that is accidental or unintentional is typically ruled out wilful;

– was hired for a particular length of time or till the completion of a specific task. However, such an employee will be entitled to discover of termination or termination pay if:- the work ends before the term expires or the task is finished; or

– the term ends or the job is not completed more than 12 months after the work started; or

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

See also: Employment Standards Self-Service Tool

Wrongful termination

Rights higher than ESA notice of termination, termination pay, discontinuance wage

The guidelines under the ESA about termination and severance of employment are minimum requirements. Some staff members may have rights under the typical law that are higher than the rights to see of termination (or termination pay) and discontinuance wage under the ESA. A worker may wish to sue their previous company in court for “wrongful termination”. Employees ought to understand that they can not take legal action against an employer for wrongful dismissal and sue for termination pay or severance pay with the ministry for the exact same termination or severance of employment. A staff member needs to choose one or the other. Employees might want to obtain legal suggestions worrying their rights.