Termination Of Employment

A variety of expressions are frequently utilized to explain scenarios when employment is ended. These consist of “release,” “released,” “dismissed,” “fired” and “permanently laid off.”

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

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

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

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

Most of the times, when an employer ends the work of an employee who has been continuously used for 3 months, the employer needs to supply 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 staff member is entitled to receive).

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

Qualifying for 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 neglect of responsibility that is not insignificant and has actually not been excused by the employer. Other examples consist of building and construction staff members, staff members on short-lived layoff, workers who refuse a deal of affordable alternative employment and workers who have been employed less than three months.

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

The termination-of-employment guidelines are entirely separate from any entitlements a worker may need to be paid discontinuance wage under the ESA.

Constructive termination

A constructive termination may take place when an employer makes a substantial change to a fundamental term or condition of a worker’s employment without the employee’s real or implied permission.

For instance, a staff member may be constructively dismissed if the employer makes changes to the employee’s conditions of work that lead to a substantial decrease in wage or a significant unfavorable modification in such things as the worker’s work location, hours of work, authority, or position. Constructive termination may also consist of circumstances where an employer bugs or abuses a worker, or an employer provides a worker an ultimatum to “give up or be fired” and the worker resigns in reaction.

The employee would have to resign in response to the modification within a reasonable amount of time in order for the employer’s actions to be considered a termination of work for purposes of the ESA.

Constructive dismissal is a complex and hard topic. For additional information on constructive termination, please contact the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A worker is on momentary layoff when a company cuts back or stops the employee’s work without ending their employment (for instance, laying somebody off sometimes when there is not enough work to do). The simple reality that the company does not define a recall date when laying the worker off does not necessarily imply that the lay-off is not momentary. Note, however, that a lay-off, even if intended to be temporary, might result in constructive termination if it is not permitted by the employment agreement.

For the purposes of the termination arrangements of the ESA, a “week of layoff” is a week in which the staff member made less than half of what they would normally make (or makes usually) in a week.

A week of layoff does not include any week in which the staff member did not work for one or more days because the worker was unable or offered 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 somewhere else.

Employers are not required under the ESA to provide workers with a composed notice of a temporary layoff, nor do they need to offer a reason for the lay-off. (They may, however, be needed to do these things under a collective contract 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 consecutive weeks;
or

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

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

– the worker gets supplemental welfare;
or

– the employee would be entitled to receive supplementary unemployment benefits but isn’t receiving them since they are utilized somewhere else;
or

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

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

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

If an employee is laid off for a period longer than a momentary layoff as set out above, the company is thought about to have actually ended the employee’s work. 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 work of a worker who has actually been utilized continuously for 3 months or more if either:

– the employer has actually offered the staff member proper written notice of termination and the notice duration has expired

– the company pays termination pay to the employee where no composed notice or less notification than is required is offered

Written notification of termination

An employee is entitled to observe of termination (or termination pay instead of notice) if they have actually been continuously utilized for at least three months. A person is thought about “utilized” not only while they are actively working, however likewise throughout any time in which they are not working but 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 upon their “period of work”. A worker’s period of employment includes not just perpetuity while the employee is actively working however also any time 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-term lay-off, the worker’s employment is considered (or considered) to have actually been terminated on the first day of the lay-off-any time after that does not count as part of the employee’s duration of work, even though the staff member might still be utilized for functions of the “constantly used for three months” certification

– if two separate durations of work are separated by more than 13 weeks, just the most current period counts for purposes of notice of termination

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

The following chart specifies the quantity of notice required:

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

Requirements during the statutory notification duration

During the statutory notification duration, an employer needs to:

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

– continue to make whatever contributions would be required to keep the staff member’s advantages strategies; and

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

Regular rate

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

Regular salaries

These are wages other than overtime pay, getaway pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and severance pay and certain legal privileges.

Regular work week

For a worker who typically works the same variety of hours every week, a routine 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 very same number of hours every week or they are paid on a basis other than time. For these employees, the “routine wages” for a “routine work week” is the average amount of the regular salaries earned by the staff member in the weeks in which the staff member worked during the period of 12 weeks instantly preceding the date the notification was provided.

An employer is not permitted to schedule a staff member’s trip time throughout the statutory notification duration unless the employee-after receiving written notification of termination of employment-agrees to take their trip time during the notification period.

If an employer supplies 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 employment should be resolved to the staff member. It can be offered personally or by mail, fax or email, as long as shipment can be verified.

There are special guidelines for providing notification of termination if a staff member has a contract of work or a cumulative contract that supplies seniority rights that permit an employee who is to be laid off or whose work is to be terminated to displace (” bump”) other employees.

Because case, the employer must post a notification in the office (where it will be seen by the staff members) setting out the names, seniority and job category of those employees the employer plans to terminate 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 publishing, to a worker who is “bumped” by a staff member named in the notice. However, this notification of termination need to still satisfy the length requirements set out in the ESA.

There are likewise special rules relating to how notice is supplied when there is a mass termination.

Termination pay

An employee who does not receive the composed notice needed under the ESA needs to be offered termination pay in lieu of notice. Termination pay is a lump sum payment equivalent to the regular earnings for a regular work week that a worker would otherwise have been entitled to during the written notice duration. A worker makes trip pay on their termination pay. Employers must likewise continue to make whatever contributions would be needed to preserve the benefits the employee would have been entitled to had they continued to be utilized through the notice duration.

Example: Regular work week

Sarah has worked for three and a half years. Now her task has been eliminated and her work has actually been terminated. Sarah was not provided any written notice of termination.

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

Sarah’s routine earnings 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 holiday pay on her termination pay is calculated:

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 needs to likewise make sure ongoing coverage for any benefit or pension that applied to her for 3 weeks.

Example: No regular work week

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

Gerry’s employer removed his position and did not give Gerry any written notice of termination. Gerry was ill and off work for 2 of the 12 weeks right away preceding the day his employment was ended. Gerry earned $1,800.00 in the 12 weeks before the day on which his work ended.

Gerry is entitled to 4 weeks of termination pay.

Gerry’s average revenues weekly are determined:

$ 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 average profits) = $180.00 a week

His termination pay is computed:

$ 180.00 × 4 weeks = $720.00

Then his trip pay on his termination pay is calculated:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company must also guarantee ongoing coverage for any advantage or pension that used 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 work is terminated or on the staff member’s next routine pay date, whichever is later on.

Mass termination

Special guidelines for notification 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 duration).

Meaning of “establishment”

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

– they are located within the very same town, or

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

Effective October 26, 2023, in cases of mass termination, the term “establishment” includes a staff member’s home, however just if the worker works from home and does not work at any other area where the company brings on company.

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

Note that where a worker carries out work both from their home and from another place where the employer brings on service (for instance, an office), their home is not included in the meaning of “establishment”. Instead, the worker is considered to have a connection to the office location and, therefore, for the function of mass termination, the worker is consisted of with regard to that office location.

Example: where numerous areas are considered one “establishment”

ABC Company has an office and a storage facility located in London, ON. Sabrina lives in London and works for ABC Company solely from another location: she carries out work for the business from home and does not work at the workplace.

For the purpose of mass termination, the company’s London workplace, London warehouse and Sabrina’s London home are considered one “establishment.”

Employer responsibilities in a mass termination

When a mass termination occurs, the company must 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.

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

– mail shipment to the Director’s office, if the delivery can be verified.

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 impacted employees is not thought about to have been given up until the Form 1 is gotten by the Director; simply put, notice of mass termination is ineffective till the Director receives the Form 1.

In addition to offering staff members with individual notifications of termination, the company must, on the very first day of the notification duration:

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

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

The amount of notice employees must get in a mass termination is not based on the workers’ length of employment, however on the variety of workers who have actually been ended. An employer needs to give:

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

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

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

Exception to the mass termination rules

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

– the number of staff members whose work is being terminated represents not more than 10 per cent of the workers who have actually been employed 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 employer’s company at the establishment

Mass termination: resignation by a staff member

A worker who has actually gotten termination notice under the mass termination guidelines who wishes to resign before the termination date provided in the employer’s notification should give the employer 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 been two years or more, the employee needs to offer a minimum of 2 weeks’ composed notification of resignation. However, the staff member does not need to offer notification of resignation if the employer constructively dismisses the worker or breaches a term of 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 notice without impacting the original date of the termination and without being required to offer any additional notification of termination to the staff member when the short-term work ends.

If an employee works beyond the 13-week duration after the termination date and after that has their employment ended, the staff member will be entitled to a new written notification of termination as if the previous notification had never been offered. The staff member’s period of work will then also include the duration of short-term work.

Recall rights

A “recall right” is the right of a worker on a layoff to be recalled to work by their company 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 since of a layoff of 35 weeks or more might 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 receive termination pay (and severance pay, 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 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, the employer needs to send out the quantity of the termination pay (and severance pay, 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 choose, the company and the trade union need to attempt to come to an arrangement to hold the termination pay (and severance pay, if any) in trust for the worker. 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 stopped working, 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 an employee chooses to quit their recall rights or if the recall rights expire, the cash that is kept 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 to the employer.

Exemptions to discover of termination or termination pay

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

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

– is guilty of wilful misconduct, disobedience or wilful neglect of responsibility that is not minor and has not been excused by the company. Note: “wilful” consists of when a staff member intended the resulting effect or acted recklessly if they understood or need to have understood the effects their conduct would have. Poor work conduct that is accidental or unintended is normally not thought about wilful;

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

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

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

See also: Employment Standards Self-Service Tool

Wrongful dismissal

Rights greater than ESA notification of termination, termination pay, discontinuance wage

The rules under the ESA about termination and severance of employment are minimum requirements. Some staff members might have rights under the common law that are higher than the rights to see of termination (or termination pay) and referall.us discontinuance wage under the ESA. An employee might desire to sue their former employer in court for “wrongful termination”. Employees should know that they can not take legal action against a company for wrongful termination and sue for termination pay or discontinuance wage with the ministry for the same termination or severance of work. A worker needs to select one or the other. Employees might want to obtain legal advice concerning their rights.