Termination Of Employment

A number of expressions are used to explain scenarios when work is ended. These consist of «let go,» «released,» «dismissed,» «fired» and «permanently laid off.»

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

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

– «constructively» dismisses a worker and the worker resigns, in reaction, within a reasonable time;

– lays a staff member off for a period that is longer than a «momentary layoff».

Most of the times, when an employer ends the employment of a worker who has actually been continually employed for 3 months, the company should offer the staff member with either written notice of termination, termination pay or a mix (as long as the notice and the variety of weeks of termination pay together equivalent the length of notice the staff member is entitled to receive).

The ESA does not need a company to offer a worker a reason why their work is being ended. There are, however, some scenarios where an employer can not terminate a worker’s employment even if the employer is prepared to offer correct written notification or termination pay. For example, a company can not end someone’s work, or penalize them in any other method, if any part of the factor for the termination of work 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 optimums, or taking a leave of lack defined in the ESA. Please see the chapter on reprisals.

Receiving termination notice or pay in lieu

Certain staff members are not entitled to discover of termination or termination pay under the ESA. Examples consist of: employees who are guilty of wilful misbehavior, disobedience, or wilful disregard of task that is not trivial and has not been excused by the company. Other examples include building and construction staff members, staff members on temporary layoff, workers who decline a deal of affordable alternative work and workers who have been employed less than three months.

There are a variety of other exemptions to the termination of work provisions of the ESA. See «Exemptions to see of termination or termination pay.» Please also describe the special rule tool.

The termination-of-employment rules are entirely separate from any entitlements a worker may need to be paid severance pay under the ESA.

Constructive termination

A positive dismissal might occur when an employer makes a substantial modification to a fundamental term or condition of an employee’s work without the staff member’s real or implied permission.

For instance, an employee may be constructively dismissed if the employer makes modifications to the worker’s terms of work that lead to a substantial decrease in salary or a substantial unfavorable modification in such things as the employee’s work place, hours of work, authority, or position. Constructive dismissal might also consist of situations where an employer bothers or abuses an employee, or a company gives an employee a demand to «quit or be fired» and the staff member resigns in response.

The staff member would need to resign in response to the change within an affordable time period in order for the company’s actions to be considered a termination of employment for functions of the ESA.

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

Temporary layoff

A worker is on short-lived layoff when a company cuts back or stops the staff member’s work without ending their employment (for example, laying someone off at times when there is insufficient work to do). The mere truth that the employer does not specify a recall date when laying the staff member off does not always indicate that the lay-off is not temporary. Note, nevertheless, that a lay-off, even if intended to be temporary, may lead to positive dismissal if it is not allowed by the employment agreement.

For 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 earn (or earns on average) in a week.

A week of layoff does not include any week in which the worker did not work for several days since the worker was not able or offered to work, was subject to disciplinary suspension, or was not offered with work due to the fact that of a strike or lockout at their location of work or in other places.

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

Under the ESA, a «momentary layoff» can last:

1. not more than 13 weeks of layoff in any duration of 20 successive weeks;
or

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

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

– the staff member receives supplemental welfare;
or

– the staff member would be entitled to receive additional unemployment advantages however isn’t receiving them since they are used in other places;
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 agreement with a worker who is not represented by a trade union;
or

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

If a staff member is laid off for a duration longer than a short-lived layoff as set out above, the employer is considered to have actually terminated the staff member’s employment. Generally, the worker will then be entitled to termination pay.

Written notice of termination and termination pay

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

– the employer has provided the worker correct written notification of termination and the notice period has actually ended

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

Written notification of termination

An employee is entitled to see of termination (or termination pay instead of notice) if they have been constantly utilized for a minimum of 3 months. An individual is considered «utilized» not just while they are actively working, however also during whenever in which they are not working however the work relationship still exists (for example, time in which the employee is off ill or on leave or on lay-off).

The quantity of notification to which a staff member is entitled depends upon their «period of work». A worker’s duration of work consists of not just all time while the employee is actively working but also whenever that they are not working however the work relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a short-lived lay-off, the worker’s employment is deemed (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 period of employment, despite the fact that the worker might still be utilized for functions of the «continuously utilized for 3 months» certification

– if 2 separate periods of work are separated by more than 13 weeks, only the most recent duration counts for functions of notice of termination

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

The following chart defines the quantity of notice required:

Note: Special rules figure out the amount of notification needed in the case of mass terminations – where the employment of 50 or more workers is terminated at an employer’s facility within a four-week period.

Requirements during the statutory notification duration

During the statutory notification period, a company needs to:

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

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

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

Regular rate

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

Regular salaries

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

Regular work week

For a staff member who typically works the very same number of hours every week, a routine work week is a week of that lots of hours, not including overtime hours.

Some employees do not have a regular work week. That is, they do not work the exact same variety of hours each week or they are paid on a basis other than time. For these workers, the «routine incomes» for a «regular work week» is the average amount of the regular earnings earned by the worker in the weeks in which the staff member worked during the period of 12 weeks instantly preceding the date the notice was given.

An employer is not enabled to arrange an employee’s holiday time throughout the statutory notice period unless the employee-after receiving composed notice of termination of employment-agrees to take their trip time during the notification period.

If an employer supplies longer notice than is required, the statutory part of the notification duration is the tail end of the duration that ends on the date of termination.

How to offer written notice

In many cases, composed notification of termination of work should be addressed to the staff member. It can be provided in person or by mail, fax or e-mail, as long as shipment can be confirmed.

There are special rules for supplying notification of termination if an employee has an agreement of employment or a collective agreement that provides seniority rights that enable an employee who is to be laid off or whose work is to be ended to displace (» bump») other workers.

Because case, the employer should publish a notification in the work environment (where it will be seen by the workers) setting out the names, seniority and job classification of those staff members the employer plans to end and the date of the proposed termination. The publishing 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 staff member named in the notification. However, this notification of termination must still fulfill the length requirements set out in the ESA.

There are likewise unique guidelines concerning how notification is provided when there is a mass termination.

Termination pay

A staff member who does not receive the composed notice needed under the ESA should be offered termination pay in lieu of notice. Termination pay is a swelling amount payment equal to the routine wages for a routine work week that an employee would otherwise have actually been entitled to throughout the composed notification duration. A staff member earns getaway pay on their termination pay. Employers need to also continue to make whatever contributions would be required to keep the advantages the staff member would have been entitled to had they continued to be employed through the notice duration.

Example: Regular work week

Sarah has worked for three and a half years. Now her job has been gotten rid of and her employment has actually been terminated. Sarah was not given any written notice of termination.

Sarah worked 40 hours a week every week and was paid $20.00 an hour. She likewise received four percent holiday pay. Because she worked for more than three years however less than 4 years, she is entitled to 3 weeks’ pay in lieu of notification.

Sarah’s regular wages 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 getaway pay on her termination pay is computed:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

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

Example: No regular work week

Gerry has worked at an assisted living home for 4 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 percent trip pay.

Gerry’s employer eliminated his position and did not offer Gerry any composed 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 average profits weekly are computed:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off sick for 2 weeks therefore these weeks are not included in the calculation of typical incomes) = $180.00 a week

His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00

Then his holiday 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 company should likewise guarantee continued protection for any benefit or pension that applied to him for 4 weeks.

When to pay termination pay

Termination pay should be paid to a worker either seven days after the worker’s employment is ended or on the worker’s next regular pay date, whichever is later.

Mass termination

Special rules for notification of termination may use in cases of mass termination (when a company is terminating 50 or more workers at its establishment within a four-week period).

Meaning of «facility»

An «establishment» is a place at which the company brings on company. Separate places can be thought about one facility if either:

– they are situated within the exact same municipality, or

– a staff member at one area has legal seniority rights that encompass the other area, enabling the employee to displace another worker (also called «bumping rights»).

Effective October 26, 2023, in cases of mass termination, the term «facility» consists of a staff member’s home, however just if the staff member works from home and does not operate at any other area where the company carries on company.

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

Note that where a worker carries out work both from their home and from another place where the employer brings on company (for instance, a workplace), their home is not consisted of in the definition of «establishment». Instead, the staff member is thought about to have a connection to the workplace place and, for that reason, for the function of mass termination, the staff member is consisted of with regard to that workplace place.

Example: where numerous areas are considered one «facility»

ABC Company has an office and a storage facility located in London, ON. Sabrina lives in London and works for ABC Company specifically from another location: she performs work for the company from home and does not work at the workplace.

For the function of mass termination, the business’s London office, London storage facility and Sabrina’s London home are considered one «facility.»

Employer responsibilities in a mass termination

When a mass termination happens, the company should finish and provide 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 delivery to the Director’s office 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 office of the Director of Employment Standards is located on the 9th floor, 400 University Avenue, Toronto ON M7A 1T7.

Any notification to the impacted employees is ruled out to have actually been given till the Form 1 is received by the Director; to put it simply, notice of mass termination is not effective up until the Director gets the Form 1.

In addition to supplying employees with individual notices of termination, the company must, on the first day of the notice duration:

– publish a copy of the Form 1 supplied to the Director in the office where it will concern the attention of the impacted staff members.

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

The quantity of notification employees must receive in a mass termination is not based on the employees’ length of work, however on the number of workers who have actually been ended. A company needs to give:

– 8 weeks observe if the employment of 50 to 199 employees is to be terminated

– 12 weeks notice if the employment of 200 to 499 employees is to be ended

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

Exception to the mass termination guidelines

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

– the number of workers whose employment is being terminated represents not more than 10 percent of the employees who have actually been utilized for a minimum of 3 months at the establishment

– none of the terminations are triggered by the permanent discontinuance of all or part of the employer’s company at the establishment

Mass termination: resignation by an employee

An employee who has received termination notice under the mass termination rules who wants to resign before the termination date provided in the company’s notice must give the company at least one week’s composed notice of resignation if the staff member has been utilized for less than 2 years. If the work period has actually been 2 years or more, the staff member needs to provide a minimum of two weeks’ composed notification of resignation. However, the employee does not need to notify of resignation if the employer constructively dismisses the staff member or breaches a regard to the agreement.

Temporary work after termination date in notice

An employer can offer work to a worker who has actually been given notice of termination on a short-term basis in the 13-week duration after the termination date set out in the notification without affecting the initial date of the termination and without being required to offer any additional notification of termination to the worker when the short-lived work ends.

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

Recall rights

A «recall right» is the right of an employee on a layoff to be recalled to work by their employer under a term or condition of employment. This right is typically found in cumulative agreements.

A worker who has recall rights and who is entitled to termination pay since of a layoff of 35 weeks or more may select 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 severance pay).

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

If an employee who is not represented by a trade union elects to keep their recall rights or stops working to make an option, the employer must send the amount 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 make an option, the employer 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 pertain to a plan, and the trade union recommends 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 cash in trust.

If a worker picks to quit their recall rights or if the recall rights expire, the cash that is kept in trust must be sent out to the employee.

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

Exemptions to notice of termination or termination pay

Many of these exemptions are intricate. Please call the Employment Standards Information Centre, 1-800-531-5551, if you need more details. Please also refer to the special guideline tool.

The notice of termination and termination pay requirements of the ESA do not apply to an employee who:

– is guilty of wilful misbehavior, disobedience or wilful disregard of responsibility that is not unimportant and has not been condoned by the company. Note: «wilful» consists of when an employee intended the resulting consequence or acted recklessly if they understood or must have known the impacts their conduct would have. Poor work conduct that is unexpected or unintended is generally ruled out wilful;

– was employed for a particular length of time or till the conclusion of a particular task. However, such a worker will be entitled to notice of termination or termination pay if:- the employment ends before the term ends or the job is finished; or

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

– the work continues for 3 months or more after the term expires 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 guidelines under the ESA about termination and severance of employment are minimum requirements. Some staff members might have rights under the common law that are higher than the rights to observe of termination (or termination pay) and severance pay under the ESA. A worker may wish to sue their former company in court for «wrongful dismissal». Employees should be mindful that they can not take legal action against a company for wrongful dismissal and file a claim for termination pay or discontinuance wage with the ministry for the very same termination or severance of employment. A worker should pick one or the other. Employees might wish to obtain legal guidance worrying their rights.