Termination Of Employment

A variety of expressions are frequently used to describe scenarios when employment is terminated. These consist of “let go,” “released,” “dismissed,” “fired” and “completely laid off.”

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

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

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

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

Most of the times, when an employer ends the work of a worker who has actually been continuously employed for three months, the company should provide the employee with either written notice of termination, termination pay or a combination (as long as the notification and the number of weeks of termination pay together equal the length of notification the staff member is entitled to receive).

The ESA does not require an employer to provide an employee a factor why their work is being ended. There are, however, some scenarios where an employer can not terminate a staff member’s employment even if the employer is prepared to give correct written notice or termination pay. For instance, an employer can not end somebody’s work, or punish them in any other method, if any part of the reason for the termination of work is based upon the employee asking questions about the ESA or working out a right under the ESA, such as refusing to work in excess of the day-to-day or weekly hours of work optimums, or taking a leave of absence defined in the ESA. Please see the chapter on reprisals.

Receiving termination notification or pay in lieu

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

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

The termination-of-employment rules are completely different from any entitlements a worker may have to be paid severance pay under the ESA.

Constructive termination

A constructive termination might take place 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 consent.

For example, an employee might be constructively dismissed if the employer makes modifications to the employee’s terms and conditions of work that result in a considerable decrease in income or a significant negative change in such things as the worker’s work location, hours of work, authority, or position. Constructive termination might likewise consist of situations where an employer bothers or abuses a worker, or a company provides a staff member a final notice to “give up or be fired” and the employee resigns in action.

The worker would need 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 employment for purposes of the ESA.

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

Temporary layoff

A staff member is on momentary layoff when an employer cuts back or stops the staff member’s work without ending their employment (for instance, laying someone off at times when there is inadequate work to do). The simple truth that the employer does not specify a recall date when laying the employee off does not necessarily mean that the lay-off is not temporary. Note, however, that a lay-off, even if planned to be short-term, may result in useful termination if it is not permitted by the work agreement.

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

A week of layoff does not include any week in which the employee did not work for one or more days because the employee was not able or available to work, underwent disciplinary suspension, or was not provided with work since of a strike or lockout at their place of work or in other places.

Employers are not needed under the ESA to provide employees with a composed notice of a temporary layoff, nor do they need to offer a factor for the lay-off. (They may, nevertheless, be needed to do these things under a collective contract or an employment agreement.)

Under the ESA, a “short-lived 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 successive weeks, but less than 35 weeks of layoff in any duration of 52 successive weeks, where:- the staff member continues to receive considerable payments from the company;
or

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

– the staff member receives supplemental unemployment benefits;
or

– the staff member would be entitled to get supplementary welfare but isn’t getting them due to the fact that they are employed somewhere else;
or

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

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

3. a layoff longer than a layoff described in ‘B’ where the company recalls a staff member who is represented by a trade union within the time set out in an arrangement in between the union and the employer.

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

Written notice of termination and termination pay

Under the ESA, an employer can terminate the work of a worker who has been used continuously for three months or more if either:

– the employer has offered the worker proper composed notice of termination and the notification duration has expired

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

Written notice of termination

A worker is entitled to observe of termination (or termination pay instead of notice) if they have actually been continuously used for a minimum of three months. A person is considered “utilized” not only while they are actively working, however also during whenever in which they are not working but the work relationship still exists (for example, time in which the staff member is off sick or on leave or on lay-off).

The amount of notice to which an employee is entitled depends on their “duration of work”. An employee’s period of work includes not only all time while the staff member is actively working but also 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-lived lay-off, the employee’s work is considered (or thought about) to have been ended on the first day of the lay-off-any time after that does not count as part of the employee’s duration of employment, even though the staff member may still be used for purposes of the “continuously used for 3 months” qualification

– if two different periods of work are separated by more than 13 weeks, just the most current period counts for purposes of notification of termination

It is possible, in some situations, for a person to have actually been “continually utilized” for 3 months or more and yet have a period of employment of less than three months. In such situations, the staff member would be entitled to see due to the fact that an employee who has been constantly utilized for a minimum of three months is entitled to see, and the minimum notification entitlement of one week uses to a worker with a period of work of any length less than one year.

The following chart specifies the amount of notice required:

Note: Special guidelines figure out the amount of notification needed when it comes to mass terminations – where the work of 50 or more staff members is ended at a company’s facility within a four-week duration.

Requirements during the statutory notice duration

During the statutory notice period, a company needs to:

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

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

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

Regular rate

This is a worker’s rate of pay for each non-overtime hour of operate in the worker’s work week.

Regular incomes

These are incomes other than overtime pay, vacation pay, public holiday 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 a staff member who usually works the same variety of hours each week, a routine work week is a week of that lots of hours, not including overtime hours.

Some staff members do not have a routine 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 staff members, the “regular earnings” for a “regular work week” is the typical amount of the regular wages made by the employee in the weeks in which the staff member worked during the duration of 12 weeks right away preceding the date the notice was provided.

An employer is not permitted to schedule an employee’s trip time throughout the statutory notice duration unless the employee-after getting written notice of termination of employment-agrees to take their trip time during the notification duration.

If an employer offers longer notification than is needed, the statutory part of the notification period is the tail end 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 worker. It can be offered personally or by mail, fax or email, as long as shipment can be validated.

There are special guidelines for providing notice of termination if a staff member has an agreement of work or a collective arrangement that provides seniority rights that allow a worker who is to be laid off or whose work is to be terminated to displace (” bump”) other employees.

Because case, the company should post a notice in the work environment (where it will be seen by the staff members) setting out the names, seniority and task category of those workers the company intends to terminate and the date of the proposed termination. The publishing of the notice is considered to be notice of termination, as of the date of the publishing, to a worker who is “bumped” by a staff member called in the notification. However, this notification of termination must still meet the length requirements set out in the ESA.

There are also special rules relating to how notification is provided when there is a mass termination.

Termination pay

An employee who does not receive the written notice needed under the ESA should be given termination pay in lieu of notice. Termination pay is a swelling amount payment equal to the regular salaries for a routine work week that a staff member would otherwise have been entitled to during the composed notice duration. A staff member makes trip pay on their termination pay. Employers need to also continue to make whatever contributions would be needed to preserve the benefits the employee would have been entitled to had they continued to be employed through the notification period.

Example: Regular work week

Sarah has worked for three and a half years. Now her job has actually been removed and her work has been terminated. Sarah was not provided any written notification of termination.

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

Sarah’s regular earnings 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 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 also ensure continued coverage for any benefit or pension strategies that used to her for three weeks.

Example: No routine work week

Gerry has operated at a nursing home for four years. He works weekly, however his hours vary 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 composed notice of termination. Gerry was ill and off work for two of the 12 weeks immediately preceding the day his employment was ended. 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 profits weekly are determined:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for two weeks therefore these weeks are not consisted of in the calculation of average revenues) = $180.00 a week

His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00

Then his getaway pay on his termination pay is computed:

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 employer needs to also make sure continued protection for any benefit or pension strategies that used to him for four weeks.

When to pay termination pay

Termination pay need to be paid to a worker either seven days after the worker’s work is terminated or on the employee’s next regular pay date, whichever is later on.

Mass termination

Special rules for of termination may apply in cases of mass termination (when an employer is terminating 50 or more employees at its establishment within a four-week period).

Meaning of “establishment”

An “facility” is an area at which the employer continues service. Separate areas can be considered one facility if either:

– they lie within the exact same town, or

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

Effective October 26, 2023, in cases of mass termination, the term “facility” consists of an employee’s home, however just if the employee works from home and does not work at any other place where the company brings on organization.

This will require that workers who work solely remotely be thought about for addition in the count when determining whether 50 or more employees have actually been ended.

Note that where an employee performs work both from their home and from another location where the employer continues business (for example, a workplace), their home is not included in the meaning of “establishment”. Instead, the worker is thought about to have a connection to the office area and, for that reason, for the function of mass termination, the worker is consisted of with respect to that office place.

Example: where multiple locations are considered one “establishment”

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

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

Employer commitments in a mass termination

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

– email 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, if the delivery can be verified.

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 impacted workers is ruled out to have actually been offered till the Form 1 is received by the Director; to put it simply, notice of mass termination is not efficient till the Director receives the Form 1.

In addition to providing employees with individual notifications of termination, the company must, on the first day of the notice period:

– post a copy of the Form 1 supplied to the Director in the work environment where it will come to the attention of the impacted employees.

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

The amount of notification employees need to receive in a mass termination is not based upon the staff members’ length of employment, but on the variety of staff members who have actually been ended. An employer must give:

– 8 weeks notice if the work of 50 to 199 workers is to be terminated

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

– 16 weeks see if the work of 500 or more employees is to be terminated

Exception to the mass termination rules

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

– the variety of workers whose work is being terminated represents not more than 10 per cent of the workers who have actually been used for at least 3 months at the establishment

– none of the terminations are brought on by the irreversible discontinuance of all or part of the company’s organization at the establishment

Mass termination: resignation by a worker

A worker who has actually gotten termination notice under the mass termination guidelines who wishes to resign before the termination date offered in the employer’s notification should give the company at least one week’s written notice of resignation if the employee has been used for less than two years. If the employment duration has been 2 years or more, the worker needs to provide a minimum of 2 weeks’ composed notification of resignation. However, the staff member does not need to provide notice of resignation if the company constructively dismisses the employee or breaches a term of the contract.

Temporary work after termination date in notice

A company can supply work to an employee who has actually been provided notification of termination on a temporary basis in the 13-week period after the termination date set out in the notice without impacting the initial date of the termination and without being required to provide any further notification of termination to the employee when the short-lived work ends.

If a worker works beyond the 13-week duration after the termination date and after that has their employment ended, the employee will be entitled to a brand-new written notification of termination as if the previous notification had actually never been given. The employee’s duration of work will then likewise consist of the duration of momentary work.

Recall rights

A “recall right” is the right of a staff member on a layoff to be called back to work by their company under a term or condition of employment. This right is typically discovered in collective agreements.

An employee who has recall rights and who is entitled to termination pay since of a layoff of 35 weeks or more may 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

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

If a staff member is entitled to both termination pay and discontinuance wage, they should make the exact same option for both.

If a worker who is not represented by a trade union chooses to keep their recall rights or fails to decide, the employer should send the quantity of the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If an employee who is represented by a trade union chooses to keep their recall rights or fails to decide, the company and the trade union should attempt to come to an arrangement to hold the termination pay (and severance pay, if any) in trust for the staff member. If they can not concern a plan, and the trade union recommends the company and the Director of Employment Standards in composing that efforts have actually stopped working, the company 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 picks to quit their recall rights or referall.us if the recall rights expire, the cash that is kept in trust should be sent to the worker.

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

Exemptions to notice of termination or termination pay

Many of these exemptions are complex. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you require more info. Please likewise describe the unique rule tool.

The notice of termination and termination pay requirements of the ESA do not apply to a worker who:

– is guilty of wilful misbehavior, disobedience or wilful overlook of responsibility that is not unimportant and has actually not been excused by the employer. Note: “wilful” includes when an employee intended the resulting repercussion or acted recklessly if they understood or ought to have known the results their conduct would have. Poor work conduct that is accidental or unintended is usually not considered wilful;

– was worked with for a specific length of time or till the conclusion of a particular job. However, such a staff member will be entitled to notice of termination or termination pay if:- the work ends before the term expires or the task is finished; or

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

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

See also: Employment Standards Self-Service Tool

Wrongful dismissal

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

The rules under the ESA about termination and severance of work are minimum requirements. Some staff members may have rights under the common law that are greater than the rights to notice of termination (or termination pay) and discontinuance wage under the ESA. A worker might wish to sue their former company in court for “wrongful dismissal”. Employees ought to understand that they can not take legal action against an employer for wrongful termination and sue for termination pay or severance pay with the ministry for the very same termination or severance of employment. A staff member should select one or the other. Employees might wish to get legal guidance worrying their rights.