Termination Of Employment

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

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

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

– “constructively” dismisses a staff member and the staff member resigns, in reaction, within an affordable time;

– lays an employee off for a duration that is longer than a “momentary layoff”.

Most of the times, when a company ends the employment of an employee who has been constantly used for three months, the employer needs to provide the staff member with either written notification of termination, termination pay or a mix (as long as the notice 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 offer a worker a reason why their employment is being terminated. There are, however, some situations where an employer can not end a staff member’s work even if the company is prepared to provide correct written notification or termination pay. For example, an employer can not end someone’s employment, or penalize them in any other method, if any part of the reason for the termination of employment is based upon 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 lack defined in the ESA. Please see the chapter on reprisals.

Getting approved for termination notification or pay in lieu

Certain workers are not entitled to observe of termination or termination pay under the ESA. Examples include: staff members who are guilty of wilful misconduct, disobedience, or wilful neglect of duty that is not minor and has not been condoned by the company. Other examples include construction workers, staff members on temporary layoff, staff members who refuse a deal of sensible alternative work and workers who have been utilized less than three months.

There are a variety of other exemptions to the termination of employment arrangements of the ESA. See “Exemptions to observe of termination or termination pay.” Please also refer to the special rule tool.

The termination-of-employment guidelines are completely separate from any privileges a staff member may have to be paid severance pay under the ESA.

Constructive dismissal

A useful dismissal may occur when a company makes a significant change to an essential term or condition of a worker’s employment without the staff member’s real or implied consent.

For instance, an employee may be constructively dismissed if the company makes changes to the worker’s terms and conditions of employment that lead to a substantial reduction in wage or a significant unfavorable change in such things as the staff member’s work area, hours of work, authority, or position. Constructive dismissal may also consist of situations where a company bugs or abuses an employee, or an employer provides a worker a warning to “quit or be fired” and the employee resigns in response.

The employee would need to resign in action to the change within a reasonable period 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 challenging subject. For more details on constructive termination, please contact the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A staff member is on short-term layoff when a company cuts back or stops the staff member’s work without ending their employment (for example, laying somebody off sometimes when there is not enough work to do). The simple truth that the employer does not specify a recall date when laying the staff member off does not necessarily suggest that the lay-off is not temporary. Note, nevertheless, that a lay-off, even if planned to be temporary, may lead to useful termination if it is not enabled by the work contract.

For the purposes of the termination arrangements of the ESA, a “week of layoff” is a week in which the staff member earned less than half of what they would ordinarily make (or earns typically) in a week.

A week of layoff does not consist of any week in which the employee did not work for one or more days due to the fact that the staff member was not able or available to work, went through disciplinary suspension, or was not offered with work due to the fact that of a strike or lockout at their place of employment or elsewhere.

Employers are not needed under the ESA to offer employees with a written notification of a short-lived layoff, nor do they have to provide a factor for the lay-off. (They may, nevertheless, be required to do these things under a cumulative contract or a work contract.)

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 successive weeks, however less than 35 weeks of layoff in any duration of 52 consecutive weeks, where:- the worker continues to get substantial payments from the employer;
or

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

– the worker receives supplementary unemployment advantages;
or

– the employee would be entitled to receive additional unemployment benefits but isn’t receiving them since they are employed elsewhere;
or

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

– the company remembers the worker within the time frame set out in a contract 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 arrangement in 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 employer is considered to have actually terminated the employee’s employment. Generally, the employee will then be entitled to termination pay.

Written notice of termination and termination pay

Under the ESA, a company can terminate the work of a staff member who has been employed continually for three months or more if either:

– the employer has actually offered the staff member proper composed notice of termination and the notification duration has actually ended

– the company pays termination pay to the staff member where no written notice or less notification than is needed is provided

Written notification of termination

A staff member is entitled to see of termination (or termination pay rather of notification) if they have actually been continually employed for at least 3 months. A person is thought about “used” not just while they are actively working, however likewise during at any time in which they are not working however the work relationship still exists (for example, time in which the worker is off ill or on leave or on lay-off).

The quantity of notification to which a staff member is entitled depends upon their “duration of work”. An employee’s period of employment consists of not only all time while the employee is actively working but 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 momentary lay-off, the employee’s employment is deemed (or considered) to have actually been ended on the very first day of the lay-off-any time after that does not count as part of the worker’s period of employment, although the employee might still be employed for functions of the “constantly utilized for 3 months” qualification

– if 2 separate durations of work are separated by more than 13 weeks, only the most current duration counts for purposes of notice of termination

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

The following chart defines the quantity of notification required:

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

Requirements throughout the statutory notification period

During the statutory notice duration, an employer must:

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

– continue to make whatever contributions would be required to preserve the worker’s benefits strategies; and

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

Regular rate

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

Regular wages

These are salaries besides overtime pay, vacation pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and severance pay and particular contractual entitlements.

Regular work week

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

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

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

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

How to offer written notice

In many cases, composed notification of termination of employment must be dealt with to the staff member. It can be provided personally or by mail, fax or e-mail, as long as delivery can be verified.

There are special rules for providing notice of termination if a worker has a contract of work or job a collective contract that provides seniority rights that permit a worker who is to be laid off or whose work is to be terminated to displace (” bump”) other workers.

Because case, the employer needs to publish a notice in the office (where it will be seen by the employees) setting out the names, seniority and task category of those employees the company means to end and the date of the proposed termination. The posting of the notification is considered to be notification of termination, since the date of the posting, to a worker who is “bumped” by a staff member named in the notification. However, this notification of termination need to still satisfy the length requirements set out in the ESA.

There are likewise special rules concerning how notification is supplied when there is a mass termination.

Termination pay

A worker who does not get the written notice required under the ESA should be provided termination pay in lieu of notice. Termination pay is a lump sum payment equivalent to the regular incomes for a regular work week that a staff member would otherwise have been entitled to during the written notice duration. A staff member makes vacation pay on their termination pay. Employers should likewise continue to make whatever contributions would be required to maintain the benefits the worker would have been entitled to had they continued to be used through the notification duration.

Example: Regular work week

Sarah has worked for three and a half years. Now her job has been gotten rid of and her work has 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 likewise received four percent holiday pay. Because she worked for more than three years however less than 4 years, she is entitled to three weeks’ pay in lieu of notice.

Sarah’s routine incomes for a routine 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 computed:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The company must likewise make sure ongoing protection for any benefit or pension that used to her for three weeks.

Example: No regular work week

Gerry has actually worked at an assisted living home for four years. He works every week, however his hours differ from week to week. His rate of pay is $25.00 an hour, and he is paid 6 per cent holiday pay.

Gerry’s company removed his position and did not give Gerry any composed notice of termination. Gerry was ill and off work for 2 of the 12 weeks immediately 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 four weeks of termination pay.

Gerry’s average earnings each week are computed:

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

His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00

Then his getaway pay on his termination pay is calculated:

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 must also guarantee ongoing coverage for any benefit or pension strategies that used to him for 4 weeks.

When to pay termination pay

Termination pay should be paid to a staff member either 7 days after the employee’s employment is ended or on the employee’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 a company is terminating 50 or more employees at its facility within a four-week duration).

Meaning of “facility”

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

– they are located within the exact same town, or

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

Effective October 26, 2023, in cases of mass termination, the term “facility” consists of an employee’s home, but just if the staff member works from home and does not operate at any other location where the employer brings on business.

This will require that employees who work specifically from another location be considered for addition in the count when figuring out whether 50 or more workers have actually been ended.

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

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

ABC Company has a workplace and a warehouse situated in London, ON. Sabrina resides in London and works for ABC Company specifically from another location: she performs work for the business from home and does not operate at the workplace.

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

Employer commitments in a mass termination

When a mass termination happens, the company should complete 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 office on a day and at a time when it is open.

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

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

Any notification to the affected staff members is not considered to have been provided up until the Form 1 is gotten by the Director; simply put, notice of mass termination is not effective up until the Director receives the Form 1.

In addition to providing employees with private notices of termination, the company must, on the first day of the notification duration:

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

– offer a copy of the Form 1 to each impacted worker.

The amount of notification staff members must receive in a mass termination is not based on the staff members’ length of employment, however on the number of employees who have been terminated. An employer needs to provide:

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

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

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

Exception to the mass termination guidelines

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

– the variety of employees whose work is being terminated represents not more than 10 per cent of the employees who have actually been used for at least three months at the establishment

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

Mass termination: resignation by a staff member

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

Temporary work after termination date in notification

An employer can provide work to an employee who has actually been provided notification of termination on a temporary basis in the 13-week duration after the termination date set out in the notice without affecting the initial date of the termination and without being required to offer any further notice of termination to the employee when the short-term work ends.

If a staff member works beyond the 13-week period after the termination date and then has their employment ended, the worker will be entitled to a new written notification of termination as if the previous notice had actually never ever been given. The employee’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 company 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 due to the fact that of a layoff of 35 weeks or more may select to:

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

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

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

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

If a staff member chooses to offer up their recall rights or if the recall rights expire, the money that is held in trust needs to be sent out 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 company.

Exemptions to notice of termination or termination pay

Much of these exemptions are intricate. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, job if you require more details. Please likewise describe the unique guideline tool.

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

– is guilty of wilful misbehavior, disobedience or wilful overlook of responsibility that is not unimportant and has not been excused by the company. Note: “wilful” consists of when a worker meant the resulting effect or acted recklessly if they knew or need to have understood the impacts their conduct would have. Poor work conduct that is accidental or unintentional is usually not thought about wilful;

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

– the term expires or the job is not completed more than 12 months after the work began; or

– the employment continues for 3 months or more after the term expires or the job is completed;

See likewise: Employment Standards Self-Service Tool

Wrongful dismissal

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

The rules under the ESA about termination and severance of employment are minimum requirements. Some workers may have rights under the common law that are greater than the rights to see of termination (or termination pay) and severance pay under the ESA. A staff member might wish to sue their former employer in court for “wrongful termination”. Employees ought to be conscious that they can not sue a company for wrongful dismissal and file a claim for termination pay or job severance pay with the ministry for the same termination or severance of work. An employee should select one or the other. Employees may wish to get legal recommendations concerning their rights.