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Termination Of Employment

A variety of expressions are frequently used to explain situations when employment is ended. These include “let go,” “discharged,” “dismissed,” “fired” and “completely laid off.”

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

– dismisses or stops using a staff member, including where an employee is no longer employed due to the bankruptcy or insolvency of the employer;

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

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

For the most part, when a company ends the work of an employee who has been constantly utilized for three months, the company needs to offer the staff member with either composed notification of termination, termination pay or a mix (as long as the notification and the number of weeks of termination pay together equivalent the length of notice the worker is entitled to get).

The ESA does not need an employer to offer an employee a reason their work is being ended. There are, nevertheless, some situations where an employer can not end an employee’s work even if the employer is prepared to offer correct composed notification or termination pay. For instance, an employer 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 on the worker asking concerns about the ESA or working out 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 lack defined in the ESA. Please see the chapter on reprisals.

Getting approved for termination notice or pay in lieu

Certain workers are not entitled to observe of termination or termination pay under the ESA. Examples consist of: workers who are guilty of wilful misbehavior, disobedience, or wilful neglect of responsibility that is not insignificant and has actually not been condoned by the employer. Other examples include building employees, workers on short-lived layoff, employees who decline a deal of reasonable 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 arrangements of the ESA. See “Exemptions to see of termination or termination pay.” Please likewise describe the unique guideline tool.

The termination-of-employment rules are entirely different from any privileges a worker might need to be paid severance pay under the ESA.

Constructive dismissal

A positive dismissal may take place when an employer makes a substantial change to a fundamental term or condition of a staff member’s work without the staff member’s real or implied permission.

For instance, an employee may be constructively dismissed if the company makes modifications to the worker’s terms and conditions of work 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 termination may likewise consist of circumstances where an employer harasses or abuses a staff member, or an employer gives a worker a final notice to “stop or be fired” and the employee resigns in action.

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

Constructive dismissal is a complex and challenging subject. To find out more on constructive dismissal, please get in touch with the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

An employee is on short-term layoff when an employer cuts back or employment stops the worker’s work without ending their work (for example, laying somebody off sometimes when there is insufficient work to do). The mere truth that the employer does not specify a recall date when laying the worker off does not necessarily suggest that the lay-off is not momentary. Note, nevertheless, that a lay-off, even if planned to be short-lived, may lead to useful dismissal if it is not permitted by the employment agreement.

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

A week of layoff does not include any week in which the staff member did not work for several days since the staff member was not able or readily available to work, was subject to disciplinary suspension, or was not supplied with work because of a strike or lockout at their location of employment or elsewhere.

Employers are not needed under the ESA to provide employees with a written notification of a temporary layoff, nor do they need to provide a reason for the lay-off. (They may, nevertheless, be needed to do these things under a cumulative arrangement or an employment agreement.)

Under the ESA, a “short-term 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 duration of 20 consecutive weeks, however less than 35 weeks of layoff in any period of 52 successive weeks, where:- the employee continues to get significant payments from the company;
or

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

– the staff member gets extra unemployment advantages;
or

– the employee would be entitled to get supplemental welfare but isn’t getting them due to the fact that they are utilized in other places;
or

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

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

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

If a worker is laid off for a period longer than a momentary layoff as set out above, the company is thought about to have ended the worker’s employment. Generally, the employee will then be entitled to termination pay.

Written notification of termination and termination pay

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

– the company has actually offered the worker proper written notification of termination and the notification period has actually expired

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

Written notice of termination

An employee is entitled to notice of termination (or termination pay instead of notification) if they have actually been continuously employed for a minimum of three months. An individual is thought about “employed” not just while they are actively working, however likewise during 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 notification to which an employee is entitled depends upon their “period of work”. A worker’s duration of employment includes not just all time while the worker is actively working however also at any time that they are not working but the work relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a short-term lay-off, the employee’s work is deemed (or thought about) to have actually been ended on the first day of the lay-off-any time after that does not count as part of the staff member’s duration of work, despite the fact that the employee may still be utilized for functions of the “continually employed for 3 months” certification

– if two different periods of work are separated by more than 13 weeks, just the most recent duration counts for functions of notice of termination

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

Requirements throughout the statutory notification duration

During the statutory notice period, an employer should:

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

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

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

Regular rate

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

Regular salaries

These are earnings besides overtime pay, getaway pay, public holiday pay, employment premium pay, domestic or sexual violence leave pay, termination of task pay, termination pay and severance pay and certain contractual privileges.

Regular work week

For a staff member who normally works the very same variety of hours weekly, a regular work week is a week of that many hours, not including overtime hours.

Some staff members do not have a regular work week. That is, they do not work the same variety of hours every week or they are paid on a basis besides time. For these staff members, the “regular salaries” for a “routine work week” is the average amount of the routine earnings made by the staff member in the weeks in which the employee worked throughout the period of 12 weeks immediately preceding the date the notification was given.

A company is not allowed to schedule an employee’s holiday time during the statutory notice period unless the employee-after receiving written notification of termination of employment-agrees to take their getaway time during the notification duration.

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

How to provide written notice

In a lot of cases, written notice of termination of employment must be resolved to the employee. It can be supplied face to face or by mail, fax or email, as long as shipment can be confirmed.

There are special guidelines for offering notice of termination if a staff member has an agreement of employment or a collective contract that provides seniority rights that permit an employee who is to be laid off or whose employment is to be terminated to displace (” bump”) other workers.

Because case, the employer should publish 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 employees the company 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 publishing, to an employee who is “bumped” by a staff member named in the notification. However, this notice of termination must still meet the length requirements set out in the ESA.

There are likewise special guidelines relating to how notification is provided when there is a mass termination.

Termination pay

An employee who does not get the composed notice required under the ESA should be given termination pay in lieu of notification. Termination pay is a lump sum payment equal to the routine incomes for a work week that a staff member would otherwise have actually been entitled to throughout the written notification duration. An employee earns holiday pay on their termination pay. Employers should also continue to make whatever contributions would be required to preserve the advantages the employee would have been entitled to had they continued to be used through the notification period.

Example: Regular work week

Sarah has actually worked for three and a half years. Now her job has been removed and her work has actually 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 likewise got 4 percent vacation pay. Because she worked for more than three years but less than four years, she is entitled to three weeks’ pay in lieu of notice.

Sarah’s routine wages for a regular work week are determined:

$ 20.00 an hour X 40 hours a week = $800.00 a week

Her termination pay is computed:

$ 800.00 X 3 weeks = $2,400.00

Then her getaway pay on her termination pay is determined:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The company needs to likewise guarantee ongoing protection for any benefit or pension strategies that applied to her for three weeks.

Example: No regular work week

Gerry has actually 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 vacation pay.

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

Gerry is entitled to 4 weeks of termination pay.

Gerry’s typical revenues weekly are determined:

$ 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 estimation of average profits) = $180.00 a week

His termination pay is computed:

$ 180.00 × 4 weeks = $720.00

Then his getaway pay on his termination pay is determined:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer should likewise ensure continued protection for employment any advantage or pension plans that used to him for four weeks.

When to pay termination pay

Termination pay must be paid to an employee either 7 days after the worker’s employment is terminated or on the employee’s next routine pay date, whichever is later on.

Mass termination

Special guidelines for notice of termination may use in cases of mass termination (when a company is terminating 50 or more staff members at its facility within a four-week duration).

Meaning of “facility”

An “establishment” is a location at which the company continues company. Separate places can be considered one establishment if either:

– they lie within the very same town, or

– a worker at one place has contractual seniority rights that reach the other area, permitting the employee to displace another worker (also called “bumping rights”).

Effective October 26, 2023, in cases of mass termination, the term “establishment” includes a worker’s home, however just if the employee works from home and does not operate at any other place where the company carries on organization.

This will need that staff members who work exclusively remotely be thought about for inclusion in the count when figuring out whether 50 or more employees have actually been terminated.

Note that where a worker performs work both from their home and from another area where the employer continues service (for instance, an office), their home is not consisted of in the definition of “facility”. Instead, the employee is thought about to have a connection to the office area and, therefore, for the purpose of mass termination, the staff member is included with respect to that workplace location.

Example: where multiple places are considered one “establishment”

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

For the function of mass termination, the company’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 takes place, the company needs to finish 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.

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

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

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

Any notice to the affected employees is ruled out to have been offered up until the Form 1 is gotten by the Director; simply put, notification of mass termination is not efficient till the Director receives the Form 1.

In addition to supplying staff members with private notifications of termination, the company must, on the first day of the notice duration:

– post a copy of the Form 1 offered to the Director in the office where it will pertain to the attention of the impacted workers.

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

The quantity of notification staff members should get in a mass termination is not based upon the workers’ length of employment, however on the number of employees who have actually been ended. A company must offer:

– 8 weeks observe if the work of 50 to 199 workers is to be ended

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

– 16 weeks discover if the employment of 500 or more workers is to be terminated

Exception to the mass termination guidelines

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

– the number of employees whose employment is being terminated represents not more than 10 per cent of the workers who have actually been used for a minimum of three months at the establishment

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

Mass termination: resignation by a worker

A worker who has actually received termination notification under the mass termination rules who wants to resign before the termination date supplied in the company’s notice must give the company a minimum of one week’s composed notification of resignation if the employee has actually been utilized for less than two years. If the work duration has actually been two years or more, the staff member must provide at least 2 weeks’ written notification of resignation. However, the employee does not have to provide notification of resignation if the company constructively dismisses the employee or breaches a term of the agreement.

Temporary work after termination date in notification

A company can provide work to an employee who has been notified of termination on a temporary basis in the 13-week duration after the termination date set out in the notice without impacting the initial date of the termination and without being required to supply any more notice of termination to the worker when the temporary work ends.

If an employee works beyond the 13-week period after the termination date and after that has their work ended, the employee will be entitled to a new written notice of termination as if the previous notice had never ever been given. The worker’s period of employment will then likewise include 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 employment. This right is typically discovered in cumulative arrangements.

A staff member 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 pick to:

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

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

If an employee is entitled to both termination pay and severance pay, they should 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 stops working to choose, the company must send the quantity of the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the money in trust.

If an employee who is represented by a trade union chooses to keep their recall rights or fails to make an option, the employer and the trade union need to attempt to come to a plan to hold the termination pay (and discontinuance wage, if any) in trust for the employee. If they can not come to an arrangement, and the trade union encourages the employer and the Director of Employment Standards in writing that efforts have actually stopped working, the employer needs to send out the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the money in trust.

If an employee chooses to give up their recall rights or if the recall rights end, employment the cash that is held in trust should be sent out to the employee.

If the staff member accepts a recall back to work, the cash that is held in trust will be returned to the employer.

Exemptions to discover of termination or termination pay

Much of these exemptions are complicated. Please contact the Employment Standards Information Centre, 1-800-531-5551, if you need more information. Please also describe the unique rule tool.

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

– is guilty of wilful misconduct, disobedience or wilful neglect of duty that is not insignificant and has actually not been condoned by the employer. Note: “wilful” consists of when an employee meant the resulting consequence or acted recklessly if they understood or should have known the impacts their conduct would have. Poor work conduct that is unexpected or unintentional is usually not thought about wilful;

– was employed for a particular length of time or up until the completion of a particular job. However, such a staff member will be entitled to discover of termination or termination pay if:- the employment ends before the term ends or the job is completed; or

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

– the employment continues for 3 months or more after the term ends or the job is finished;

See also: employment Employment Standards Self-Service Tool

Wrongful termination

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

The guidelines under the ESA about termination and severance of employment are minimum requirements. Some staff members may have rights under the typical law that are greater than the rights to observe 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 need to know that they can not take legal action against a company for wrongful termination and sue for termination pay or discontinuance wage with the ministry for the very same termination or severance of employment. An employee must select one or the other. Employees might wish to acquire legal advice worrying their rights.