Termination Of Employment

A variety of expressions are typically used to explain circumstances when work is terminated. These consist of ”release,” ”discharged,” ”dismissed,” ”fired” and ”permanently laid off.”

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

– dismisses or stops using a staff member, consisting of where a staff member is no longer utilized due to the bankruptcy or insolvency of the company;

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

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

For employment the most part, when an employer ends the work of a worker who has actually been continuously employed for three months, the employer needs to offer the employee with either written notification of termination, employment 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 staff member is entitled to get).

The ESA does not require an employer to offer an employee a reason their employment is being ended. There are, however, some situations where a company can not terminate an employee’s employment even if the employer is prepared to provide proper written notification or termination pay. For example, a company can not end somebody’s work, or punish them in any other way, if any part of the factor for the termination of employment is based upon the staff member asking questions about the ESA or exercising 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 specified in the ESA. Please see the chapter on reprisals.

Receiving termination notification or pay in lieu

Certain employees are not entitled to observe of termination or termination pay under the ESA. Examples include: workers who are guilty of wilful misconduct, disobedience, or wilful disregard of duty that is not trivial and has not been condoned by the employer. Other examples consist of construction staff members, staff members on temporary layoff, staff members who refuse an offer of affordable alternative work and staff members who have actually been utilized less than three months.

There are a number of other exemptions to the termination of employment provisions 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 different from any privileges an employee might have to be paid severance pay under the ESA.

Constructive dismissal

A positive dismissal may occur when an employer makes a considerable modification to an essential term or condition of a staff member’s work without the employee’s real or implied authorization.

For instance, an employee might be constructively dismissed if the company makes changes to the employee’s terms and conditions of work that result in a significant reduction in salary or a considerable negative change in such things as the worker’s work location, hours of work, authority, or position. Constructive termination might likewise consist of scenarios where a company bothers or abuses a worker, or an employer provides a staff member a demand to ”stop or be fired” and the staff member resigns in reaction.

The worker would have to resign in reaction to the change within a sensible period of time in order for the company’s actions to be considered a termination of work for functions of the ESA.

Constructive termination is a complex and challenging subject. To learn more on useful dismissal, please contact the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

An employee is on short-term layoff when a company cuts down or stops the worker’s work without ending their work (for employment instance, laying somebody off at times when there is inadequate work to do). The mere fact that the company does not define a recall date when laying the worker off does not necessarily mean that the lay-off is not temporary. Note, however, that a lay-off, even if planned to be momentary, might lead to positive termination if it is not allowed by the work contract.

For employment the purposes of the termination provisions of the ESA, a ”week of layoff” is a week in which the employee earned less than half of what they would normally 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 several days because the employee was not able or readily available to work, was subject to disciplinary suspension, or was not provided with work due to the fact that of a strike or lockout at their place of work or elsewhere.

Employers are not needed under the ESA to provide workers with a composed notification of a short-term layoff, nor do they need to provide a factor for the lay-off. (They may, nevertheless, be required to do these things under a cumulative agreement or an employment agreement.)

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

1. not more than 13 weeks of layoff in any period of 20 successive 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 significant payments from the employer;
or

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

– the staff member gets supplemental unemployment benefits;
or

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

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

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

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

Written notification of termination and termination pay

Under the ESA, an employer can end the work of an employee who has actually been employed continuously for three months or more if either:

– the employer has actually offered the employee correct composed notice of termination and the notice duration has expired

– the employer pays termination pay to the staff member where no composed notice or less notice than is needed is provided

Written notice of termination

A staff member is entitled to notice of termination (or termination pay rather of notification) if they have been continuously employed for a minimum of three months. An individual is considered ”employed” not only while they are actively working, however also during whenever in which they are not working however the employment relationship still exists (for instance, time in which the worker is off ill or on leave or on lay-off).

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

– if a lay-off goes on longer than a momentary lay-off, the worker’s work is deemed (or thought about) to have actually been terminated on the very first day of the lay-off-any time after that does not count as part of the staff member’s duration of work, even though the worker may still be used for functions of the ”continually utilized for three months” certification

– if 2 separate durations of employment are separated by more than 13 weeks, just the most recent duration counts for functions of notification of termination

It is possible, in some situations, for employment an individual to have been ”continuously employed” for 3 months or more and yet have a period of work of less than three months. In such situations, the employee would be entitled to notice since an employee who has actually been continuously utilized for employment a minimum of 3 months is entitled to observe, and the minimum notice privilege of one week uses to a staff member with a duration of work of any length less than one year.

The following chart specifies the amount of notification needed:

Note: Special guidelines figure out the quantity of notification required when it comes to mass terminations – where the employment of 50 or more workers is ended at an employer’s facility within a four-week period.

Requirements during the statutory notice duration

During the statutory notification duration, an employer must:

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

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

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

Regular rate

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

Regular salaries

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

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 staff members do not have a regular work week. That is, they do not work the exact same number of hours every week or they are paid on a basis besides time. For these workers, the ”regular salaries” for a ”routine work week” is the average amount of the regular wages made by the worker in the weeks in which the staff member worked during the period of 12 weeks immediately preceding the date the notice was offered.

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

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

How to offer written notice

In many cases, composed notification of termination of employment must be resolved to the employee. It can be supplied in individual or by mail, fax or email, as long as shipment can be validated.

There are unique rules for providing notice of termination if an employee has an agreement of employment or a collective contract that offers seniority rights that enable a staff member who is to be laid off or whose work is to be terminated to displace (” bump”) other staff members.

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

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

Termination pay

A staff member who does not get the composed notification required under the ESA must be provided termination pay in lieu of notice. Termination pay is a lump amount payment equal to the regular salaries for a routine work week that a staff member would otherwise have been entitled to during the written notification duration. A worker makes vacation pay on their termination pay. Employers should likewise 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 employed through the notice duration.

Example: Regular work week

Sarah has worked for three and a half years. Now her job has actually been eliminated and her employment has been ended. Sarah was not provided any written notification of termination.

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

Sarah’s regular incomes for a routine work week are computed:

$ 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 trip pay on her termination pay is determined:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The employer should also make sure ongoing coverage for any benefit or pension plans that applied to her for 3 weeks.

Example: No routine work week

Gerry has operated at a nursing 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 percent holiday pay.

Gerry’s employer eliminated his position and did not give Gerry any composed notification of termination. Gerry was ill and off work for two of the 12 weeks right away preceding the day his employment was terminated. 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 average revenues weekly are calculated:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off sick for two weeks for that reason these weeks are not consisted of in the estimation of average profits) = $180.00 a week

His termination pay is determined:

$ 180.00 × 4 weeks = $720.00

Then his trip pay on his termination pay is determined:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company should likewise guarantee ongoing coverage for any advantage or pension that used to him for 4 weeks.

When to pay termination pay

Termination pay need to be paid to an employee either 7 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 notice of termination might apply in cases of mass termination (when an employer is ending 50 or more employees at its facility within a four-week duration).

Meaning of ”establishment”

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

– they are located within the same town, or

– an employee at one place has legal seniority rights that extend to the other location, allowing the employee to displace another worker (also called ”bumping rights”).

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

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

Note that where an employee performs work both from their home and from another place where the employer continues company (for example, a workplace), their home is not consisted of in the meaning of ”facility”. Instead, the worker is thought about to have a connection to the workplace area and, therefore, for employment the function of mass termination, the staff member is consisted of with regard to that office area.

Example: where multiple areas are considered one ”facility”

ABC Company has a workplace and a storage facility located in London, ON. Sabrina resides in London and works for ABC Company specifically remotely: 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 obligations in a mass termination

When a mass termination takes place, the employer must complete and deliver 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 delivery to the Director’s office on a day and at a time when it is open.

– mail delivery 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 notification to the affected workers is not considered to have been provided until the Form 1 is gotten by the Director; in other words, notice of mass termination is not effective until the Director gets the Form 1.

In addition to providing staff members with specific notifications of termination, the employer 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 impacted workers.

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

The amount of notice staff members should receive in a mass termination is not based on the workers’ length of work, but on the number of workers who have been ended. A company must provide:

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

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

– 16 weeks observe if the work of 500 or more staff members is to be ended

Exception to the mass termination guidelines

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

– the variety of staff members whose employment is being terminated represents not more than 10 per cent of the workers who have actually been utilized for a minimum of 3 months at the establishment

– none of the terminations are triggered by the irreversible discontinuance of all or part of the company’s service at the facility

Mass termination: resignation by a staff member

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

Temporary work after termination date in notification

An employer can supply work to an employee who has actually been notified of termination on a short-term basis in the 13-week duration after the termination date set out in the notification without impacting the initial date of the termination and without being needed to provide any more notice of termination to the employee when the momentary work ends.

If an employee works beyond the 13-week period after the termination date and then has their work ended, the staff member will be entitled to a brand-new composed notice of termination as if the previous notice had never ever been given. The worker’s duration of employment will then also include the duration of temporary 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 discovered in collective arrangements.

A worker who has recall rights and who is entitled to termination pay because of a layoff of 35 weeks or more may pick to:

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

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

If an employee is entitled to both termination pay and discontinuance wage, they need to make the exact same choice for both.

If an employee who is not represented by a trade union chooses to keep their recall rights or fails to make a choice, the company must 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 elects to keep their recall rights or fails to choose, the company and the trade union should attempt to come to an arrangement to hold the termination pay (and discontinuance wage, if any) in trust for the worker. If they can not concern a plan, and the trade union recommends the company and the Director of Employment Standards in writing that efforts have failed, the employer should 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 quit their recall rights or if the recall rights expire, 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 kept in trust will be returned to the company.

Exemptions to notice of termination or termination pay

A lot of these exemptions are complicated. Please call 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 apply to a worker who:

– is guilty of wilful misconduct, disobedience or wilful disregard of task that is not insignificant and has not been excused by the employer. Note: ”wilful” consists of when a worker planned the resulting consequence or acted recklessly if they understood or must have understood the effects their conduct would have. Poor work conduct that is unintentional or unintended is normally not considered wilful;

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

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

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

See likewise: Employment Standards Self-Service Tool

Wrongful dismissal

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

The rules under the ESA about termination and severance of employment are minimum requirements. Some employees might have rights under the typical law that are higher than the rights to see of termination (or termination pay) and severance pay under the ESA. A staff member may want to sue their former employer in court for ”wrongful termination”. Employees ought to be aware that they can not sue a company for wrongful termination and sue for termination pay or severance pay with the ministry for the same termination or severance of employment. An employee needs to select one or the other. Employees might want to obtain legal recommendations worrying their rights.