Termination Of Employment

A number of expressions are commonly used to explain situations when work is ended. These include “release,” “discharged,” “dismissed,” “fired” and “permanently laid off.”

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

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

– “constructively” dismisses a worker and the worker resigns, in action, within an affordable time;

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

Most of the times, when an employer ends the employment of a worker who has actually been continuously used for 3 months, the employer needs to provide the employee with either composed notice of termination, termination pay or a combination (as long as the notification and the variety of weeks of termination pay together equivalent the length of notice the staff member is entitled to get).

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

Qualifying for termination notice or pay in lieu

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

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

The termination-of-employment rules are totally different from any privileges an employee may have to be paid discontinuance wage under the ESA.

Constructive termination

A useful termination may happen when a company makes a significant modification to a fundamental term or condition of a staff member’s employment without the employee’s actual or implied consent.

For example, a worker might be constructively dismissed if the employer makes modifications to the employee’s terms of employment that lead to a significant decrease in salary or a considerable unfavorable modification in such things as the employee’s work area, hours of work, authority, or position. Constructive dismissal might likewise include circumstances where a company bugs or abuses a worker, or a company gives a staff member a demand to “give up or be fired” and the employee resigns in reaction.

The worker would have to resign in response to the modification within a reasonable amount of time in order for the company’s actions to be thought about a termination of employment for functions of the ESA.

Constructive termination is a complex and tough topic. For more details on positive dismissal, please call the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

An employee is on short-lived layoff when an employer cuts down or stops the staff member’s work without ending their employment (for example, laying somebody off at times when there is not enough work to do). The simple reality that the company does not define a recall date when laying the employee off does not always imply that the lay-off is not temporary. Note, however, that a lay-off, even if intended to be short-term, might lead to positive termination if it is not permitted by the employment 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 normally make (or makes typically) in a week.

A week of layoff does not include any week in which the employee did not work for one or more days due to the fact that the staff member was unable or offered to work, was subject to disciplinary suspension, or was not offered with work since of a strike or lockout at their location of employment or elsewhere.

Employers are not required under the ESA to provide staff members with a written notice of a short-term layoff, nor do they have to supply a factor employment for the lay-off. (They may, nevertheless, be required to do these things under a collective arrangement or an employment agreement.)

Under the ESA, a “temporary 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 period of 20 successive weeks, however less than 35 weeks of layoff in any period of 52 consecutive weeks, where:- the staff member continues to receive significant payments from the company;
or

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

– the employee gets additional unemployment advantages;
or

– the staff member would be entitled to get supplementary welfare but isn’t receiving them since they are employed in other places;
or

– the employer remembers the staff member to work within the time frame approved by the Director of Employment Standards;
or

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

3. a layoff longer than a layoff explained in ‘B’ where the company recalls an employee who is represented by a trade union within the time set out in a contract in between the union and the company.

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

Written notification of termination and termination pay

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

– the employer has provided the employee correct written notification of termination and the notification duration has actually ended

– the company pays termination pay to the worker where no written notification or less notice than is needed is given

Written notice of termination

A worker is entitled to see of termination (or termination pay rather of notification) if they have actually been continuously employed for at least three months. A person is thought about “utilized” not only while they are actively working, but likewise during at any time in which they are not working but the work relationship still exists (for example, time in which the employee is off sick or on leave or on lay-off).

The quantity of notification to which a staff member is entitled depends upon their “duration of employment”. A worker’s period of employment includes not only all time while the worker is actively working but also whenever that they are not working but the work relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a temporary lay-off, the worker’s employment is deemed (or thought about) to have actually been terminated on the very first day of the lay-off-any time after that does not count as part of the worker’s period of work, although the employee might still be used for purposes of the “continually employed for three months” credentials

– if 2 different periods of work are separated by more than 13 weeks, only the most current period counts for employment functions of notification of termination

It is possible, in some circumstances, for an individual to have actually been “continually used” for 3 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 an employee who has actually been continuously utilized for at least 3 months is entitled to observe, and the minimum notification entitlement of one week applies to a worker with a duration of work of any length less than one year.

The following chart defines the amount of notice required:

Note: Special rules identify the quantity of notice needed when it comes to mass terminations – where the work of 50 or more workers is ended at an within a four-week period.

Requirements during the statutory notification duration

During the statutory notification duration, a company should:

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

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

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

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 salaries besides overtime pay, getaway pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of task pay, termination pay and severance pay and employment particular contractual entitlements.

Regular work week

For an employee who typically works the exact same number of hours every week, a regular work week is a week of that numerous hours, not including overtime hours.

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

A company is not enabled to arrange an employee’s holiday time throughout the statutory notification duration unless the employee-after getting composed notification of termination of employment-agrees to take their vacation time throughout the notification duration.

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

How to provide written notification

In many cases, written notification of termination of employment should be addressed to the employee. It can be provided face to face or by mail, fax or email, as long as delivery can be validated.

There are special guidelines for supplying notification of termination if a worker has a contract of work or a collective contract that provides seniority rights that enable a worker who is to be laid off or whose employment is to be ended to displace (” bump”) other staff members.

Because case, the company must post a notification in the office (where it will be seen by the workers) setting out the names, seniority and job classification of those workers the employer intends to terminate and the date of the proposed termination. The publishing of the notice is thought about to be notice of termination, as of the date of the posting, to an employee who is “bumped” by an employee called in the notification. However, this notice of termination need to still meet the length requirements set out in the ESA.

There are also unique guidelines regarding how notification is provided when there is a mass termination.

Termination pay

An employee who does not receive the composed notification needed under the ESA needs to be given termination pay in lieu of notification. Termination pay is a swelling amount payment equal to the regular incomes for a regular work week that an employee would otherwise have actually been entitled to during the composed notice period. A worker earns holiday pay on their termination pay. Employers need to also continue to make whatever contributions would be required to preserve the benefits the staff member would have been entitled to had they continued to be utilized through the notice duration.

Example: Regular work week

Sarah has actually worked for 3 and a half years. Now her job has actually been gotten rid of and her work has been terminated. Sarah was not provided any composed notification of termination.

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

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

$ 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 trip pay is contributed to her termination pay:

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The company should likewise make sure continued protection for any benefit or pension strategies that applied to her for three weeks.

Example: No regular work week

Gerry has actually worked at a nursing home for 4 years. He works each week, but his hours vary from week to week. His rate of pay is $25.00 an hour, and he is paid 6 percent getaway pay.

Gerry’s employer eliminated his position and did not provide Gerry any composed notice of termination. Gerry was ill and off work for 2 of the 12 weeks instantly preceding the day his work was ended. 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 average profits per week are computed:

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

His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00

Then his vacation 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 must also make sure ongoing protection for any benefit or pension that applied to him for 4 weeks.

When to pay termination pay

Termination pay need to be paid to an employee either 7 days after the worker’s work is ended or on the worker’s next regular pay date, whichever is later.

Mass termination

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

Meaning of “facility”

An “facility” is a place at which the employer continues business. Separate locations can be thought about one facility if either:

– they are situated within the same municipality, or

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

Effective October 26, 2023, in cases of mass termination, the term “establishment” includes an employee’s home, however only if the employee works from home and does not work at any other area where the employer continues organization.

This will require that staff members who work exclusively from another location be considered for inclusion in the count when figuring out whether 50 or more workers have actually been ended.

Note that where a worker carries out work both from their home and from another area where the company brings on organization (for example, a workplace), their home is not consisted of in the meaning of “establishment”. Instead, the worker is considered to have a connection to the workplace place and, therefore, for the purpose of mass termination, the employee is included with regard to that workplace place.

Example: where several locations are thought about one “establishment”

ABC Company has a workplace and a warehouse situated in London, ON. Sabrina lives in London and works for ABC Company solely from another location: she performs work for the company from home and employment does not work at the workplace.

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

Employer responsibilities in a mass termination

When a mass termination occurs, the company must complete and deliver the Form 1 (Notice of termination of work) to the Director of Employment Standards (Director) by:

– email 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 delivery to the Director’s workplace, if the shipment can be confirmed.

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

Any notification to the impacted employees is ruled out to have actually been provided till the Form 1 is gotten by the Director; simply put, notification of mass termination is ineffective until the Director receives the Form 1.

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

– post a copy of the Form 1 provided to the Director in the office where it will pertain to the attention of the impacted staff members.

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

The amount of notification staff members need to receive in a mass termination is not based on the workers’ length of work, however on the variety of employees who have actually been terminated. A company should give:

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

– 12 weeks see if the employment of 200 to 499 workers is to be terminated

– 16 weeks notice if the employment of 500 or more employees is to be ended

Exception to the mass termination rules

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

– the variety of employees whose employment is being ended represents not more than 10 per cent of the workers who have actually been employed for at least three months at the facility

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

Mass termination: resignation by a worker

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

Temporary work after termination date in notice

A company can offer work to a worker who has actually been offered notification of termination on a temporary basis in the 13-week period after the termination date set out in the notice without affecting the original date of the termination and without being needed to supply any more notice of termination to the staff member when the temporary work ends.

If a staff member works beyond the 13-week period after the termination date and then has their work ended, the employee will be entitled to a new written notice of termination as if the previous notice had never been given. The worker’s period of work will then also include the duration of short-lived work.

Recall rights

A “recall right” is the right of an employee on a layoff to be recalled to work by their company under a term or condition of work. This right is frequently 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 might choose to:

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

– give 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 discontinuance wage, they must make the exact same choice for both.

If a staff member who is not represented by a trade union chooses to keep their recall rights or stops working to make a choice, the employer needs to send the quantity of the termination pay (and severance pay, if any) to the Director of Employment Standards, employment 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 employer and the trade union should 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 an arrangement, and the trade union recommends the employer and the Director of Employment Standards in writing that efforts have stopped working, the employer needs to send out the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, employment who holds the cash in trust.

If a worker selects to quit their recall rights or if the recall rights end, the cash that is held in trust needs to be sent to the worker.

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

Exemptions to discover 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 need more info. Please also refer to the unique guideline tool.

The notification of termination and termination pay requirements of the ESA do not apply to a staff member who:

– is guilty of wilful misconduct, disobedience or wilful overlook of duty that is not insignificant and has not been condoned by the employer. Note: “wilful” includes when an employee intended the resulting effect or acted recklessly if they knew or must have understood the results their conduct would have. Poor work conduct that is unexpected or unintentional is normally ruled out wilful;

– was hired for a particular length of time or up until the conclusion of a specific 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 expires or the job is not completed more than 12 months after the employment began; or

– the employment continues for 3 months or more after the term expires or the job is completed;

See also: Employment Standards Self-Service Tool

Wrongful dismissal

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

The rules under the ESA about termination and severance of employment 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 discontinuance wage under the ESA. A worker might wish to sue their former company in court for “wrongful dismissal”. Employees should know that they can not sue a company for wrongful dismissal and sue for termination pay or discontinuance wage with the ministry for the exact same termination or severance of work. A staff member should choose one or the other. Employees may want to acquire legal advice worrying their rights.