Termination Of Employment

A variety of expressions are typically used to explain circumstances when work is terminated. These include “let go,” “released,” “dismissed,” “fired” and “completely laid off.”

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

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

– “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 employment of a staff member who has actually been continually employed for three months, the company needs to supply the employee with either composed notice of termination, termination pay or a combination (as long as the notification and the number of weeks of termination pay together equivalent the length of notification the employee is entitled to get).

The ESA does not require a company to offer a worker a reason their work is being terminated. There are, nevertheless, some situations where an employer can not terminate a staff member’s work even if the company is prepared to give proper written notice or termination pay. For example, a company can not end someone’s employment, or penalize them in any other way, if any part of the reason for the termination of employment is based on the staff member asking questions about the ESA or working out a right under the ESA, such as refusing to work in excess of the everyday or weekly hours of work maximums, or taking a leave of absence specified in the ESA. Please see the chapter on reprisals.

Receiving termination notice or pay in lieu

Certain staff members are not entitled to see of termination or termination pay under the ESA. Examples consist of: staff members who are guilty of wilful misconduct, disobedience, or wilful neglect of responsibility that is not insignificant and has actually not been condoned by the employer. Other examples consist of construction employees, workers on temporary layoff, employees who refuse an offer of reasonable alternative work and staff members who have actually been employed less than three months.

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

The termination-of-employment rules are entirely separate from any entitlements an employee may have to be paid discontinuance wage under the ESA.

Constructive dismissal

A constructive dismissal may occur when an employer makes a substantial change to an essential term or condition of an employee’s work without the worker’s real or implied consent.

For instance, an employee may be constructively dismissed if the employer makes modifications to the staff member’s terms and conditions of employment that lead to a considerable reduction in income or a significant negative change in such things as the worker’s work location, hours of work, authority, or position. Constructive dismissal might also consist of situations where a company bugs or abuses an employee, or a company provides a staff member a demand to “give up or be fired” and the worker resigns in reaction.

The staff member would have to resign in action to the modification within a sensible time period in order for the company’s actions to be thought about a termination of work for functions of the ESA.

Constructive termination is a complex and hard topic. To find out more on useful termination, please contact the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

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

For employment the functions of the termination arrangements of the ESA, a “week of layoff” is a week in which the employee made less than half of what they would ordinarily make (or makes usually) in a week.

A week of layoff does not include any week in which the staff member did not work for several days because the staff member was unable or available to work, underwent disciplinary suspension, or was not provided with work because of a strike or lockout at their location of employment or somewhere else.

Employers are not required under the ESA to supply staff members with a written notification of a short-lived layoff, nor do they need to provide a factor for the lay-off. (They may, however, be needed to do these things under a cumulative contract 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 consecutive weeks;
or

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

– the employer continues to pay for the benefit of the worker under a genuine group or worker insurance coverage strategy (such as a medical or drug insurance coverage strategy) or a genuine retirement or pension;
or

– the staff member receives additional joblessness benefits;
or

– the staff member would be entitled to receive additional joblessness benefits but isn’t getting them since they are employed in other places;
or

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

– the employer remembers the worker within the time frame set out in a contract with a worker who is not represented by a trade union;
or

3. a layoff longer than a layoff explained in ‘B’ where the 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 duration longer than a short-term layoff as set out above, the company is considered to have terminated the employee’s work. Generally, employment the staff member will then be entitled to termination pay.

Written notice of termination and termination pay

Under the ESA, a company can terminate the employment of a worker who has actually been utilized continuously for 3 months or more if either:

– the company has actually given the worker appropriate written notification of termination and the notice period has actually ended

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

Written notice of termination

A staff member is entitled to see of termination (or termination pay instead of notification) if they have been constantly used for employment at least three months. An individual is considered “employed” not only while they are actively working, however likewise during any time in which they are not working however the employment relationship still exists (for instance, time in which the worker is off sick or on leave or on lay-off).

The amount of notice to which a staff member is entitled depends on their “duration of employment”. An employee’s period of employment includes not only perpetuity while the employee is actively working but likewise at any time that they are not working however the employment relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a temporary lay-off, the staff member’s work is considered (or considered) to have been ended 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 employment, despite the fact that the staff member might still be utilized for purposes of the “continuously utilized for three months” qualification

– if 2 separate durations of work are separated by more than 13 weeks, only the most recent period counts for purposes of notification of termination

It is possible, in some circumstances, for a person to have actually been “continually utilized” for 3 months or more and yet have a period of employment of less than 3 months. In such situations, the worker would be to see because a worker who has been continually employed for at least 3 months is entitled to observe, and the minimum notification privilege of one week uses to a worker with a period of work of any length less than one year.

The following chart defines the quantity of notification required:

Note: employment Special rules identify the amount of notification needed when it comes to mass terminations – where the employment of 50 or more employees is terminated at an employer’s facility within a four-week period.

Requirements throughout the statutory notification period

During the statutory notice period, a company should:

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

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

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

Regular rate

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

Regular salaries

These are earnings besides overtime pay, trip pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of task pay, termination pay and discontinuance wage and particular legal privileges.

Regular work week

For an employee who usually works the same variety of hours every week, a routine work week is a week of that lots of hours, not consisting of overtime hours.

Some staff members do not have a regular work week. That is, they do not work the very same number of hours weekly or they are paid on a basis besides time. For these staff members, the “routine wages” for a “routine work week” is the average quantity of the routine wages earned by the staff member in the weeks in which the staff member worked throughout the period of 12 weeks instantly preceding the date the notice was given.

A company is not allowed to set up a staff member’s vacation time during the statutory notice period unless the employee-after receiving composed notice of termination of employment-agrees to take their holiday time throughout the notification period.

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

How to offer written notification

Most of the times, written notice of termination of work need to be addressed to the staff member. It can be provided face to face or by mail, fax or e-mail, as long as delivery can be verified.

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

In that case, the company must publish a notice in the office (where it will be seen by the staff members) setting out the names, seniority and task classification of those employees the company intends to end and the date of the proposed termination. The publishing of the notification is considered to be notification of termination, since the date of the publishing, to a worker who is “bumped” by a worker called in the notice. However, this notice of termination must still satisfy 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

A staff member who does not receive the written notification needed under the ESA needs to be provided termination pay in lieu of notice. Termination pay is a lump amount payment equivalent to the routine incomes for a regular work week that an employee would otherwise have actually been entitled to throughout the composed notification duration. A worker makes holiday pay on their termination pay. Employers need to also continue to make whatever contributions would be needed to keep the benefits the staff member would have been entitled to had they continued to be utilized through the notification period.

Example: Regular work week

Sarah has worked for 3 and a half years. Now her task 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 4 per cent trip pay. Because she worked for more than 3 years however less than four years, she is entitled to 3 weeks’ pay in lieu of notice.

Sarah’s regular incomes 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 holiday pay on her termination pay is computed:

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 make sure ongoing protection for any advantage or pension that applied to her for 3 weeks.

Example: No regular work week

Gerry has actually worked at a retirement home for 4 years. He works each week, but his hours vary 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 give Gerry any composed notification of termination. Gerry was ill and off work for 2 of the 12 weeks instantly preceding the day his work was terminated. Gerry made $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 typical incomes each week are determined:

$ 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 computation of typical incomes) = $180.00 a week

His termination pay is determined:

$ 180.00 × 4 weeks = $720.00

Then his getaway pay on his termination pay is computed:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company must likewise make sure ongoing coverage for any benefit or pension that applied to him for 4 weeks.

When to pay termination pay

Termination pay need to be paid to a worker either 7 days after the worker’s work is terminated or on the staff member’s next regular 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 terminating 50 or more employees at its establishment within a four-week period).

Meaning of “establishment”

An “establishment” is a place at which the company continues business. Separate places can be thought about one establishment if either:

– they are situated within the same municipality, or

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

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

This will need that staff members who work exclusively remotely be considered for inclusion in the count when identifying whether 50 or more workers have been ended.

Note that where a worker carries out work both from their home and from another location where the employer continues company (for instance, a workplace), their home is not included in the definition of “establishment”. Instead, the employee is considered to have a connection to the office place and, for that reason, for the function of mass termination, the worker is included with respect to that office area.

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

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

For the purpose of mass termination, the business’s London workplace, London warehouse and Sabrina’s London home are considered one “facility.”

Employer obligations in a mass termination

When a mass termination occurs, the employer 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 shipment to the Director’s office on a day and at a time when it is open.

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

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

Any notice to the impacted staff members is not thought about to have been given till the Form 1 is received by the Director; simply put, notification of mass termination is not reliable until the Director receives the Form 1.

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

– post a copy of the Form 1 supplied to the Director in the workplace where it will come to the attention of the impacted workers.

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

The amount of notification employees need to get in a mass termination is not based upon the staff members’ length of work, however on the number of employees who have actually been ended. A company needs to offer:

– 8 weeks see if the employment of 50 to 199 staff members is to be ended

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

– 16 weeks discover if the work of 500 or more workers is to be ended

Exception to the mass termination rules

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

– the number of staff members whose work is being ended represents not more than 10 per cent of the employees who have been utilized for at least 3 months at the establishment

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

Mass termination: resignation by an employee

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

Temporary work after termination date in notice

A company can provide work to a staff member 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 original date of the termination and without being required to supply any additional notification 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 after that has their work terminated, the worker will be entitled to a new composed notification of termination as if the previous notice had never been offered. The worker’s period of work will then likewise consist of the period of short-lived work.

Recall rights

A “recall right” is the right of a worker on a layoff to be called back 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 choose 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 severance pay).

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

If a staff member who is not represented by a trade union elects to keep their recall rights or stops working to choose, 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 chooses to keep their recall rights or fails to decide, the company and the trade union need to try to come to an arrangement to hold the termination pay (and severance pay, if any) in trust for the worker. If they can not pertain to an arrangement, and the trade union encourages the company and the Director of Employment Standards in composing that efforts have stopped working, the employer needs to send the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the money in trust.

If a staff member picks to quit their recall rights or if the recall rights end, the cash that is kept in trust should be sent to the staff member.

If the worker accepts a recall back to work, the money that is kept in trust will be gone back to the employer.

Exemptions to discover of termination or termination pay

A lot of these exemptions are complicated. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you need more details. Please also describe 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 overlook of responsibility that is not unimportant and has actually not been condoned by the employer. Note: “wilful” consists of when an employee planned the resulting consequence or acted recklessly if they understood or should have understood the effects their conduct would have. Poor work conduct that is accidental or unintentional is usually ruled out wilful;

– was hired for a particular length of time or until the completion of a particular 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 task is completed; or

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

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

See likewise: Employment Standards Self-Service Tool

Wrongful termination

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

The rules under the ESA about termination and severance of work are minimum requirements. Some workers might have rights under the common law that are greater than the rights to see of termination (or termination pay) and discontinuance wage under the ESA. A staff member might wish to sue their previous employer in court for “wrongful dismissal”. Employees must be conscious that they can not sue a company for wrongful termination and sue for termination pay or severance pay with the ministry for the exact same termination or severance of work. A staff member should select one or the other. Employees might wish to acquire legal guidance concerning their rights.