Termination Of Employment

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

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

– dismisses or stops utilizing a worker, including where an employee is no longer employed due to the bankruptcy or insolvency of the company;

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

– lays a worker off for a period that is longer than a “short-lived layoff”.

In many cases, when an employer ends the work of a staff member who has been continuously utilized for 3 months, the employer needs to offer the employee with either composed notification of termination, termination pay or a combination (as long as the notice and the variety of weeks of termination pay together equal the length of notice the staff member is entitled to receive).

The ESA does not need an employer to give a worker a reason their work is being terminated. There are, however, some circumstances where an employer can not terminate an employee’s employment even if the employer is prepared to provide correct written notification or termination pay. For example, a company can not end somebody’s work, or penalize them in any other method, if any part of the reason for the termination of work is based upon the employee asking concerns 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 maximums, or taking a leave of absence defined in the ESA. Please see the chapter on reprisals.

Receiving termination notification or pay in lieu

Certain staff members are not entitled to see of termination or termination pay under the ESA. Examples include: workers who are guilty of wilful misconduct, disobedience, or wilful disregard of task that is not unimportant and has not been condoned by the company. Other examples include building and construction staff members, employment staff members on momentary layoff, employees who decline a deal of reasonable alternative employment and employees 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 likewise describe the special rule tool.

The termination-of-employment rules are entirely different from any entitlements a staff member might have to be paid severance pay under the ESA.

Constructive dismissal

A constructive termination might occur when an employer makes a considerable modification to an essential term or condition of a staff member’s employment without the worker’s real or implied permission.

For example, a staff member may be constructively dismissed if the employer makes modifications to the staff member’s conditions of employment that result in a considerable reduction in wage or a considerable negative modification in such things as the staff member’s work place, hours of work, authority, or position. Constructive dismissal might likewise consist of situations where an employer bothers or abuses a worker, or an employer offers a staff member a final notice to “give up or be fired” and the staff member resigns in reaction.

The staff member would have to resign in action to the change within a reasonable amount of time 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 subject. For more info on constructive dismissal, please call the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A worker is on momentary layoff when a company cuts down or stops the staff member’s work without ending their work (for example, laying someone off at times when there is not enough work to do). The simple fact that the employer does not define a recall date when laying the worker off does not always mean that the lay-off is not short-lived. Note, nevertheless, that a lay-off, even if meant to be temporary, might lead to positive termination if it is not enabled by the work contract.

For the purposes of the termination provisions of the ESA, a “week of layoff” is a week in which the staff member earned less than half of what they would normally earn (or earns usually) in a week.

A week of layoff does not consist of any week in which the staff member did not work for one or more days since the worker was unable or available to work, went through disciplinary suspension, or was not offered with work because of a strike or lockout at their location of employment or in other places.

Employers are not required under the ESA to offer staff members with a composed notification of a temporary layoff, nor do they have to supply a factor for the lay-off. (They may, however, be required to do these things under a cumulative arrangement or employment 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 consecutive weeks;
or

2. more than 13 weeks in any period of 20 successive weeks, but less than 35 weeks of layoff in any period of 52 consecutive weeks, employment where:- the worker continues to get substantial payments from the company;
or

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

– the staff member receives supplementary welfare;
or

– the employee would be entitled to get extra unemployment advantages however isn’t getting them since they are utilized elsewhere;
or

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

– the employer recalls the staff member 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 company remembers an employee who is represented by a trade union within the time set out in an agreement between the union and the employer.

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

Written notification of termination and termination pay

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

– the employer has actually provided the employee proper composed notification of termination and the notification duration has ended

– the company pays termination pay to the staff member where no written notification or less notification than is required is offered

Written notification of termination

A worker is entitled to discover of termination (or termination pay rather of notification) if they have actually been continually employed for at least three months. An individual is thought about “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 quantity of notification to which a worker is entitled depends on their “period of work”. An employee’s duration of work includes not just perpetuity while the worker is actively working but likewise whenever that they are not working however the employment relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a short-term lay-off, the staff member’s work is considered (or thought about) to have 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, although the staff member might still be used for purposes of the “constantly utilized for three months” certification

– if two different durations of work are separated by more than 13 weeks, just the most current duration counts for functions of notification of termination

It is possible, in some situations, for a person to have been “continually employed” for three months or more and yet have a period of employment of less than three months. In such circumstances, the employee would be entitled to discover because a worker who has actually been continually employed for a minimum of three months is entitled to discover, and the minimum notice privilege of one week uses to an employee with a duration of employment of any length less than one year.

The following chart defines the quantity of notice required:

Note: Special rules identify the amount of notice required in the case of mass terminations – where the employment of 50 or more employees is terminated at a company’s establishment within a four-week duration.

Requirements throughout the statutory notice duration

During the statutory notification duration, an employer needs to:

– not minimize the worker’s wage rate or modify any other term or condition of work;

– continue to make whatever contributions would be needed to keep the employee’s benefits strategies; and

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

Regular rate

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

Regular incomes

These are incomes aside from overtime pay, trip pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and severance pay and particular contractual entitlements.

Regular work week

For an employee who generally works the very same number of hours each week, a regular work week is a week of that many hours, not consisting of overtime hours.

Some staff members do not have a regular work week. That is, they do not work the same variety of hours weekly or they are paid on a basis aside from time. For these workers, the “regular wages” for a “routine work week” is the average amount of the regular incomes earned by the staff member in the weeks in which the worker worked throughout the period of 12 weeks right away preceding the date the notification was provided.

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

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

How to provide written notice

In many cases, written notice of termination of work should be addressed to the worker. It can be offered in individual or by mail, fax or e-mail, as long as shipment can be confirmed.

There are unique guidelines for providing notification of termination if an has a contract of work or a collective agreement that supplies seniority rights that enable a worker who is to be laid off or whose employment is to be ended to displace (” bump”) other workers.

In that case, the company should publish a notification in the workplace (where it will be seen by the staff members) setting out the names, seniority and job classification of those employees the company plans to end and the date of the proposed termination. The posting of the notification is considered to be notification of termination, as of the date of the publishing, to a staff member who is “bumped” by a worker named in the notice. However, this notice of termination must still meet the length requirements set out in the ESA.

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

Termination pay

A worker who does not receive the written notice required under the ESA must be given termination pay in lieu of notification. Termination pay is a lump amount payment equal to the routine incomes for a routine work week that a staff member would otherwise have actually been entitled to during the written notification duration. A worker earns getaway pay on their termination pay. Employers should likewise continue to make whatever contributions would be required to preserve the advantages 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 job has actually been eliminated and her work has actually been ended. Sarah was not given any composed notice of termination.

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

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

$ 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 trip pay on her termination pay is computed:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The employer must likewise guarantee continued protection for any advantage or pension that used to her for 3 weeks.

Example: No routine work week

Gerry has operated at an assisted living home for 4 years. He works every week, but 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 removed his position and did not offer Gerry any written notification of termination. Gerry was ill and off work for 2 of the 12 weeks immediately 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 each week 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 estimation of typical profits) = $180.00 a week

His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00

Then his trip pay on his termination pay is calculated:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company needs to also make sure continued protection for any advantage or pension that used to him for 4 weeks.

When to pay termination pay

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

Mass termination

Special guidelines for notice of termination might use in cases of mass termination (when an employer is terminating 50 or more employees at its establishment within a four-week duration).

Meaning of “facility”

An “establishment” is an area at which the company continues organization. Separate areas can be considered one establishment if either:

– they lie within the very same town, or

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

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

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

Note that where a staff member carries out work both from their home and from another location where the company continues business (for instance, an office), their home is not consisted of in the definition of “facility”. Instead, the employee is considered to have a connection to the workplace area and, for that reason, for the function of mass termination, the employee is included with regard to that office area.

Example: where multiple locations are thought about one “facility”

ABC Company has an office and a storage facility situated in London, ON. Sabrina resides in London and works for ABC Company solely from another location: she performs work for the company from home and does not operate at the office.

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

Employer obligations in a mass termination

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

– e-mail to esa_form1_notice@ontario.ca.

– fax to (416) 326-7061.

– individual shipment to the Director’s office on a day and at a time when it is open.

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

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

Any notice to the affected staff members is not considered to have been given up until the Form 1 is received by the Director; simply put, notice of mass termination is not efficient up until the Director receives the Form 1.

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

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

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

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

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

– 12 weeks observe if the work of 200 to 499 staff members is to be terminated

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

Exception to the mass termination rules

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

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

– none of the terminations are triggered by the long-term discontinuance of all or part of the company’s service at the establishment

Mass termination: resignation by a worker

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

Temporary work after termination date in notice

An employer can supply work to an employee who has been offered notice of termination on a short-lived 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 provide any more notification of termination to the employee when the momentary work ends.

If a worker works beyond the 13-week duration after the termination date and then has their employment terminated, the worker will be entitled to a new written notification of termination as if the previous notice had actually never been offered. The staff member’s period of work will then likewise include the period of short-term work.

Recall rights

A “recall right” is the right of a staff member on a layoff to be recalled to work by their employer under a term or condition of employment. This right is typically 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 severance pay, if they were entitled to discontinuance wage) at that time;
or

– provide up their recall rights and receive 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 same option for both.

If an employee who is not represented by a trade union chooses to keep their recall rights or employment stops working to decide, the employer should send the amount of the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.

If an employee who is represented by a trade union chooses to keep their recall rights or stops working to choose, the company and the trade union need to try to come to an arrangement to hold the termination pay (and discontinuance wage, if any) in trust for the employee. If they can not pertain to a plan, and the trade union advises the employer and the Director of Employment Standards in composing that efforts have failed, the employer must send the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If an employee chooses to quit their recall rights or if the recall rights end, the cash that is kept in trust should be sent 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 company.

Exemptions to observe of termination or termination pay

A lot of these exemptions are complex. Please contact the Employment Standards Information Centre, 1-800-531-5551, if you require more information. Please likewise describe the special rule tool.

The notice 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 not been excused by the company. Note: “wilful” includes when a staff member meant the resulting effect or acted recklessly if they understood or must have known the effects their conduct would have. Poor work conduct that is unintentional or unintended is typically ruled out wilful;

– was employed for a specific length of time or till the completion of a particular job. However, such an employee will be entitled to observe of termination or termination pay if:- the employment ends before the term expires or the task is finished; or

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

– the work continues for 3 months or more after the term ends or the task is finished;

See also: Employment Standards Self-Service Tool

Wrongful dismissal

Rights greater 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 typical law that are higher than the rights to see of termination (or termination pay) and severance pay under the ESA. A worker might desire to sue their previous company in court for “wrongful dismissal”. Employees ought to be aware that they can not take legal action against an employer for wrongful dismissal and sue for termination pay or severance pay with the ministry for the very same termination or severance of work. A staff member must pick one or the other. Employees may wish to acquire legal suggestions concerning their rights.