Termination Of Employment

A variety of expressions are frequently utilized to describe situations when employment is terminated. These consist of “release,” “discharged,” “dismissed,” “fired” and “completely laid off.”

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

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

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

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

In most cases, when a company ends the employment of a worker who has actually been constantly employed for three months, the company must offer the employee with either composed notice of termination, termination pay or a combination (as long as the notification and the variety of weeks of termination pay together equal the length of notice the worker is entitled to get).

The ESA does not require a company to provide a worker a reason why their work is being ended. There are, however, some circumstances where a company can not end a even if the company is prepared to give correct written notice or termination pay. For instance, an employer can not end somebody’s employment, or penalize them in any other method, if any part of the reason for the termination of work is based on the employee asking questions about the ESA or exercising a right under the ESA, such as refusing 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 notice or pay in lieu

Certain employees are not entitled to see of termination or termination pay under the ESA. Examples consist of: workers who are guilty of wilful misbehavior, disobedience, or wilful neglect of duty that is not unimportant and has not been condoned by the company. Other examples include building and construction workers, workers on temporary layoff, workers who decline a deal of affordable alternative work and staff members who have actually been used less than 3 months.

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

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

Constructive dismissal

A positive termination might occur when an employer makes a considerable change to a fundamental term or condition of a worker’s work without the worker’s real or implied permission.

For instance, a staff member may be constructively dismissed if the company makes changes to the employee’s terms of employment that result in a substantial decrease in income or a considerable negative change in such things as the employee’s work area, hours of work, authority, or position. Constructive dismissal might also consist of circumstances where an employer bothers or abuses an employee, or a company gives an employee a warning to “give up or be fired” and the staff member resigns in response.

The employee would need to resign in action to the change within a sensible duration of time in order for the company’s actions to be considered a termination of employment for functions of the ESA.

Constructive termination is a complex and difficult topic. For more details on positive dismissal, please contact the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A worker is on momentary layoff when an employer cuts down or stops the staff member’s work without ending their work (for instance, laying somebody off at times when there is insufficient work to do). The simple truth that the employer does not define a recall date when laying the employee off does not necessarily indicate that the lay-off is not short-lived. Note, however, that a lay-off, even if meant to be momentary, might result in positive termination if it is not enabled by the employment contract.

For the purposes of the termination arrangements of the ESA, a “week of layoff” is a week in which the employee earned less than half of what they would generally earn (or makes typically) in a week.

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

Employers are not needed under the ESA to offer staff members with a written notification of a momentary layoff, nor do they have to supply a reason for the lay-off. (They may, nevertheless, be required to do these things under a cumulative agreement or a work contract.)

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 period of 20 consecutive weeks, but less than 35 weeks of layoff in any duration of 52 consecutive weeks, where:- the worker continues to receive significant payments from the company;
or

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

– the employee gets supplementary joblessness advantages;
or

– the employee would be entitled to get additional unemployment advantages but isn’t getting them because they are utilized in other places;
or

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

– the employer recalls the worker within the time frame set out in an agreement 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 an employee who is represented by a trade union within the time set out in an agreement between the union and the employer.

If a worker is laid off for a duration longer than a short-lived layoff as set out above, the company is thought about to have terminated the worker’s employment. Generally, the staff member will then be entitled to termination pay.

Written notification of termination and job termination pay

Under the ESA, a company can terminate the work of an employee who has actually been used continually for 3 months or more if either:

– the company has provided the worker correct composed notification of termination and the notice period has actually ended

– the company pays termination pay to the worker where no composed notice or less notification than is needed is provided

Written notice of termination

A staff member is entitled to discover of termination (or termination pay rather of notice) if they have actually been continually used for at least three months. An individual is considered “employed” not only while they are actively working, however likewise throughout at any time in which they are not working but the work relationship still exists (for instance, time in which the employee is off ill or on leave or on lay-off).

The amount of notification to which a staff member is entitled depends on their “period of work”. A staff member’s duration of employment consists of not only perpetuity 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 short-term lay-off, the staff member’s work is considered (or considered) to have been terminated on the very first day of the lay-off-any time after that does not count as part of the employee’s period of work, job despite the fact that the employee may still be employed for purposes of the “continually employed for 3 months” credentials

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

It is possible, in some situations, for an individual to have been “constantly employed” for three months or more and yet have a period of employment of less than 3 months. In such situations, the worker would be entitled to discover since an employee who has actually been continually employed for at least 3 months is entitled to discover, and the minimum notification entitlement of one week applies to a staff member 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 amount of notification required when it comes to mass terminations – where the work of 50 or more employees is terminated at an employer’s facility within a four-week duration.

Requirements throughout the statutory notice period

During the statutory notice duration, an employer must:

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

– continue to make whatever contributions would be needed to maintain the worker’s advantages strategies; and

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

Regular rate

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

Regular incomes

These are wages besides 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 particular contractual privileges.

Regular work week

For a worker who generally works the same variety 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 routine work week. That is, they do not work the same number of hours weekly or they are paid on a basis other than time. For these employees, the “routine salaries” for a “routine work week” is the typical amount of the routine wages made by the employee in the weeks in which the employee worked throughout the period of 12 weeks immediately preceding the date the notice was offered.

An employer is not enabled to schedule a worker’s holiday time during the statutory notice duration unless the employee-after receiving written notification of termination of employment-agrees to take their vacation time during the notification duration.

If a company supplies longer notice than is needed, the statutory part of the notification duration is the last part of the duration that ends on the date of termination.

How to supply written notification

In the majority of cases, composed notice of termination of work must be addressed to the worker. It can be provided personally or by mail, fax or email, as long as delivery can be confirmed.

There are special guidelines for offering notification of termination if an employee has an agreement of employment or a cumulative agreement that offers seniority rights that allow an employee who is to be laid off or whose employment is to be ended to displace (” bump”) other employees.

In that case, the employer should post a notification in the work environment (where it will be seen by the staff members) setting out the names, seniority and job 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 notice of termination, as of the date of the posting, to an employee who is “bumped” by a worker called in the notification. However, this notice of termination must still fulfill the length requirements set out in the ESA.

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

Termination pay

An employee who does not receive the written notification required under the ESA must be offered termination pay in lieu of notice. Termination pay is a lump sum payment equivalent to the regular incomes for a routine work week that an employee would otherwise have been entitled to throughout the written notification period. An employee makes trip pay on their termination pay. Employers should also continue to make whatever contributions would be required to keep the benefits the staff member would have been entitled to had they continued to be used through the notification duration.

Example: Regular work week

Sarah has actually worked for three and a half years. Now her job has been removed and her employment has been ended. Sarah was not offered any written notice of termination.

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

Sarah’s routine salaries for a routine work week are determined:

$ 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 trip pay on her termination pay is determined:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The company needs to likewise ensure ongoing protection for any advantage or pension strategies that used to her for 3 weeks.

Example: No routine work week

Gerry has actually worked at an assisted living home for 4 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 employer removed his position and did not provide Gerry any composed notice of termination. Gerry was ill and off work for 2 of the 12 weeks immediately preceding the day his work was ended. Gerry earned $1,800.00 in the 12 weeks before the day on which his employment ended.

Gerry is entitled to 4 weeks of termination pay.

Gerry’s typical revenues 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 computation of average incomes) = $180.00 a week

His termination pay is determined:

$ 180.00 × 4 weeks = $720.00

Then his trip pay on his termination pay is computed:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer should also ensure ongoing coverage for any benefit or pension that applied to him for four weeks.

When to pay termination pay

Termination pay must be paid to a staff member either 7 days after the employee’s work is ended or on the employee’s next regular pay date, whichever is later on.

Mass termination

Special guidelines for notification of termination may apply in cases of mass termination (when a company is ending 50 or more staff members at its establishment within a four-week period).

Meaning of “facility”

An “establishment” is a place at which the company carries on company. Separate locations can be thought about one establishment if either:

– they lie within the exact same municipality, or

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

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

This will need that employees who work specifically from another location be considered for addition in the count when identifying whether 50 or more workers have been terminated.

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

Example: job where several places are considered one “facility”

ABC Company has a workplace and a storage facility located in London, ON. Sabrina lives in London and job works for ABC Company solely from another location: she performs work for the company from home and does not operate at the workplace.

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

Employer commitments in a mass termination

When a mass termination occurs, the company needs to complete and deliver the Form 1 (Notice of termination of employment) to the Director of Employment Standards (Director) by:

– e-mail 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 shipment can be verified.

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

Any notice to the impacted workers is ruled out to have actually been given till the Form 1 is gotten by the Director; to put it simply, notification of mass termination is ineffective until the Director gets the Form 1.

In addition to offering employees with private notifications of termination, the employer must, on the very first day of the notification duration:

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

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

The quantity of notification staff members need to receive in a mass termination is not based on the workers’ length of employment, however on the number of employees who have been ended. An employer needs to offer:

– 8 weeks observe if the employment of 50 to 199 employees is to be terminated

– 12 weeks see if the employment of 200 to 499 workers is to be ended

– 16 weeks discover if the employment 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 workers whose work is being terminated represents not more than 10 percent of the employees who have actually been employed 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 company at the facility

Mass termination: resignation by a staff member

A worker who has gotten termination notification under the mass termination rules who desires to resign before the termination date provided in the employer’s notification need to give the employer a minimum of one week’s composed notice of resignation if the worker has actually been used for job less than two years. If the work duration has actually been two years or more, the worker should give at least two weeks’ composed notice of resignation. However, the worker does not need to give notice of resignation if the employer constructively dismisses the worker or breaches a term of the agreement.

Temporary work after termination date in notification

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

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

Recall rights

A “recall right” is the right of an employee on a layoff to be recalled to work by their company under a term or condition of employment. This right is typically found in collective contracts.

A staff member who has recall rights and who is entitled to termination pay because 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 discontinuance wage) at that time;
or

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

If a staff member is entitled to both termination pay and severance pay, they must make the very same option 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 the amount of the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.

If an employee who is represented by a trade union elects to keep their recall rights or stops working to make a choice, the employer and the trade union must try to come to an arrangement to hold the termination pay (and discontinuance wage, if any) in trust for the worker. If they can not concern an arrangement, and the trade union encourages the company and the Director of Employment Standards in writing that efforts have actually failed, the employer needs to send the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.

If an employee selects to give up their recall rights or if the recall rights expire, the money that is held in trust must be sent out to the employee.

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

Exemptions to observe 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, if you require more details. Please also refer to the special rule tool.

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

– is guilty of wilful misconduct, disobedience or job wilful overlook of task that is not minor and has actually not been condoned by the employer. Note: “wilful” consists of when an employee planned the resulting effect or acted recklessly if they knew or must have known the impacts their conduct would have. Poor work conduct that is unintentional or unintentional is usually ruled out wilful;

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

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

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

See likewise: Employment Standards Self-Service Tool

Wrongful dismissal

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

The guidelines under the ESA about termination and severance of employment are minimum requirements. Some employees may have rights under the typical law that are higher than the rights to discover of termination (or termination pay) and severance pay under the ESA. A staff member might wish to sue their previous company in court for “wrongful dismissal”. Employees should be aware that they can not sue an employer for wrongful termination and sue for termination pay or severance pay with the ministry for the same termination or severance of work. An employee needs to select one or the other. Employees might wish to acquire legal advice concerning their rights.