Termination Of Employment

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

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

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

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

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

In many cases, when a company ends the work of an employee who has actually been continuously employed for 3 months, the company must offer the staff member with either composed 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 notice the staff member is entitled to get).

The ESA does not require an employer to provide an employee a reason their work is being terminated. There are, however, some situations where an employer can not end a worker’s work even if the employer is prepared to provide correct composed notification or termination pay. For referall.us example, an employer can not end somebody’s work, or punish them in any other way, if any part of the reason for the termination of work 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 absence specified in the ESA. Please see the chapter on reprisals.

Getting approved for termination notice or pay in lieu

Certain employees are not entitled to see of termination or termination pay under the ESA. Examples include: workers who are guilty of wilful misbehavior, disobedience, or wilful disregard of duty that is not trivial and has actually not been excused by the employer. Other examples include construction employees, staff members on short-lived layoff, employees who refuse an offer of affordable alternative employment and staff members who have actually been used less than three months.

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

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

Constructive termination

A useful termination might occur when a company makes a substantial change to a basic term or condition of a staff member’s employment without the staff member’s real or implied approval.

For instance, a staff member may be constructively dismissed if the company makes changes to the employee’s terms and conditions of employment that result in a significant decrease in salary or a significant negative change in such things as the employee’s work location, hours of work, authority, or position. Constructive dismissal may also include situations where an employer bugs or abuses an employee, or a company provides an employee an ultimatum to “quit or be fired” and the staff member resigns in response.

The staff member would have to resign in action to the change within an affordable duration of time in order for the employer’s actions to be thought about a termination of work for purposes of the ESA.

Constructive termination is a complex and tough subject. For more details 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 back or stops the worker’s work without ending their employment (for instance, laying someone off sometimes when there is inadequate work to do). The mere reality that the company does not define a recall date when laying the employee off does not always mean that the lay-off is not temporary. Note, nevertheless, that a lay-off, even if meant to be temporary, may result in positive termination if it is not permitted by the employment contract.

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

A week of layoff does not include any week in which the worker did not work for several days since the employee was unable or available to work, was subject to disciplinary suspension, or was not supplied with work due to the fact that of a strike or lockout at their location of work or in other places.

Employers are not required under the ESA to offer employees with a written notice of a temporary layoff, nor do they need to provide a factor for the lay-off. (They may, however, be required 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 duration of 20 successive weeks;
or

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

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

– the employee gets supplemental unemployment benefits;
or

– the staff member would be entitled to get extra joblessness advantages however isn’t receiving them since they are utilized somewhere else;
or

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

– the employer remembers the staff member 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 employer 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 staff member is laid off for a period longer than a short-lived layoff as set out above, the employer is thought about to have ended the staff member’s work. Generally, the worker will then be entitled to termination pay.

Written notification of termination and termination pay

Under the ESA, an employer can terminate the employment of a staff member who has been utilized continuously for 3 months or more if either:

– the company has given the staff member appropriate composed notice of termination and the notice period has actually ended

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

Written notification of termination

A worker is entitled to discover of termination (or termination pay rather of notification) if they have been constantly used for at least three months. An individual is thought about “employed” not just while they are actively working, however also throughout at any time in which they are not working however the employment relationship still exists (for instance, time in which the employee is off sick or on leave or on lay-off).

The amount of notice to which a staff member is entitled depends upon their “duration of work”. An employee’s period of employment consists of not just perpetuity while the staff member is actively working however likewise whenever that they are not working however the work relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a momentary lay-off, the worker’s employment is considered (or thought about) 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 work, although the employee may still be used for purposes of the “constantly employed for three months” credentials

– if two separate periods of employment are separated by more than 13 weeks, just the most current period counts for functions of notice of termination

It is possible, in some scenarios, for a person to have actually been “constantly utilized” for three months or more and yet have a period of employment of less than 3 months. In such circumstances, the employee would be entitled to notice because a staff member who has actually been continually employed for at least three months is entitled to discover, and the minimum notice privilege of one week applies to an employee with a duration of employment of any length less than one year.

The following chart defines the quantity of notification needed:

Note: Special guidelines determine the quantity of notice needed when it comes to mass terminations – where the employment of 50 or more employees is ended at an employer’s establishment within a four-week period.

Requirements during the statutory notification duration

During the statutory notice period, a company must:

– not reduce the employee’s wage rate or alter any other term or condition of employment;

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

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

Regular rate

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

Regular incomes

These are salaries other than overtime pay, holiday pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and discontinuance wage and particular contractual privileges.

Regular work week

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

Some workers do not have a routine work week. That is, they do not work the exact same number of hours weekly or they are paid on a basis other than time. For these staff members, the “routine salaries” for a “regular work week” is the typical amount of the routine wages made by the employee in the weeks in which the worker worked throughout the period of 12 weeks instantly preceding the date the notice was offered.

A company is not permitted to set up an employee’s vacation time during the statutory notice period unless the employee-after getting written notice of termination of employment-agrees to take their trip time during the notification period.

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

How to offer written notice

In many cases, written notice of termination of employment must be resolved to the worker. It can be provided in person or by mail, fax or e-mail, as long as delivery can be validated.

There are unique rules for providing notification of termination if a staff member has an agreement of work or a cumulative contract that provides seniority rights that enable a worker who is to be laid off or whose work is to be terminated to displace (” bump”) other employees.

Because case, the employer needs to post a notice in the work environment (where it will be seen by the workers) setting out the names, seniority and job classification of those employees the employer plans to terminate and the date of the proposed termination. The posting of the notice is considered to be notice of termination, as of the date of the posting, to a staff member who is “bumped” by a staff member named in the notification. However, this notification of termination must still satisfy 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

A staff member who does not get the composed notice needed under the ESA needs to be provided termination pay in lieu of notice. Termination pay is a swelling amount payment equivalent to the regular wages for a routine work week that a worker would otherwise have been entitled to during the written notification period. A staff member earns holiday pay on their termination pay. Employers must also continue to make whatever contributions would be required to maintain the advantages the employee would have been entitled to had they continued to be utilized through the notification period.

Example: Regular work week

Sarah has worked for three and a half years. Now her task has been gotten rid of and her work has been terminated. Sarah was not given any composed notice of termination.

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

Sarah’s regular salaries for a routine work week are calculated:

$ 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 computed:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The company must likewise ensure continued coverage for any advantage or pension strategies that used to her for three weeks.

Example: No routine work week

Gerry has worked at a nursing home for 4 years. He works each 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 trip pay.

Gerry’s employer removed his position and did not offer Gerry any written notification of termination. Gerry was ill and off work for two of the 12 weeks instantly preceding the day his work 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 earnings weekly are calculated:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off sick for 2 weeks for that reason these weeks are not included in the calculation of typical profits) = $180.00 a week

His termination pay is determined:

$ 180.00 × 4 weeks = $720.00

Then his holiday pay on his termination pay is determined:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer must also make sure continued protection for any benefit or pension plans that applied to him for four weeks.

When to pay termination pay

Termination pay must be paid to a staff member either seven days after the worker’s work is terminated or on the staff member’s next routine pay date, whichever is later on.

Mass termination

Special rules for notification of termination may use in cases of mass termination (when a company is ending 50 or more workers at its establishment within a four-week duration).

Meaning of “establishment”

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

– they lie within the same municipality, or

– an employee at one area has legal seniority rights that reach the other place, enabling the employee to displace another employee (likewise called “bumping rights”).

Effective October 26, 2023, in cases of mass termination, the term “establishment” consists of a worker’s home, but just if the staff member works from home and does not operate at any other place where the employer brings on service.

This will require that workers who work solely from another location be thought about for inclusion in the count when determining whether 50 or more workers have actually been ended.

Note that where a worker carries out work both from their home and from another place where the company brings on organization (for instance, an office), their home is not included in the meaning of “facility”. Instead, the staff member is thought about to have a connection to the workplace place and, for that reason, for the function of mass termination, the employee is consisted of with regard to that workplace place.

Example: where numerous locations are considered one “facility”

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

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

Employer responsibilities in a mass termination

When a mass termination takes place, 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 office on a day and at a time when it is open.

– mail shipment to the Director’s workplace, if the shipment can be validated.

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 impacted employees is not thought about to have actually been provided until the Form 1 is gotten by the Director; in other words, notice of mass termination is not efficient until the Director receives the Form 1.

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

– publish a copy of the Form 1 provided to the Director in the office where it will pertain to the attention of the impacted employees.

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

The amount of notification workers should get in a mass termination is not based upon the employees’ length of work, however on the variety of employees who have actually been terminated. A company must give:

– 8 weeks discover if the employment of 50 to 199 workers is to be ended

– 12 weeks discover if the work of 200 to 499 staff members is to be ended

– 16 weeks notice if the employment of 500 or more employees is to be ended

Exception to the mass termination guidelines

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

– the variety of staff members whose employment is being ended represents not more than 10 per cent of the workers who have been employed for a minimum of 3 months at the facility

– none of the terminations are triggered by the long-term discontinuance of all or part of the company’s company at the facility

Mass termination: resignation by a worker

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

Temporary work after termination date in notice

A company can provide work to an employee who has actually been notified of termination on a short-lived 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 needed to provide any additional notification of termination to the worker when the short-lived work ends.

If a worker works beyond the 13-week period after the termination date and after that has their employment terminated, the employee will be entitled to a new written notification of termination as if the previous notice had actually never been given. The employee’s duration of work will then also include the duration of momentary 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 employment. This right is commonly discovered in collective agreements.

An employee who has recall rights and who is entitled to termination pay since 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 severance pay) at that time;
or

– quit their recall rights and receive 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 very same option for both.

If an employee who is not represented by a trade union elects to keep their recall rights or fails to make a choice, the employer needs to 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 a worker who is represented by a trade union elects to keep their recall rights or stops working to decide, the company and the trade union must attempt to come to an arrangement to hold the termination pay (and severance pay, if any) in trust for the staff member. If they can not pertain to a plan, and the trade union encourages the company and the Director of Employment Standards in composing that efforts have actually failed, the company should 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 chooses to offer up their recall rights or if the recall rights end, the cash that is held in trust must be sent to the worker.

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

Exemptions to notice 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 require more info. Please also refer to the unique rule tool.

The notice of termination and termination pay requirements of the ESA do not use to an employee who:

– is guilty of wilful misconduct, disobedience or wilful neglect of responsibility that is not trivial and has actually not been excused by the company. Note: “wilful” consists of when an employee intended the resulting effect or acted recklessly if they understood or need to have known the results their conduct would have. Poor work conduct that is accidental or unintended is generally ruled out wilful;

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

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

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

See also: Employment Standards Self-Service Tool

Wrongful termination

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

The rules under the ESA about termination and severance of work are minimum requirements. Some workers might have rights under the typical law that are greater than the rights to see of termination (or termination pay) and severance pay under the ESA. A worker might wish to sue their former company in court for “wrongful dismissal”. Employees must understand that they can not sue an employer for wrongful termination and sue for termination pay or discontinuance wage with the ministry for the very same termination or severance of employment. A staff member must select one or the other. Employees might want to obtain legal suggestions worrying their rights.