Termination Of Employment

A number of expressions are typically utilized to describe scenarios when work is ended. These include “release,” “released,” “dismissed,” “fired” and “completely laid off.”

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

– dismisses or stops employing a staff member, including where a staff member is no longer used due to the insolvency or insolvency of the company;

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

– lays an employee off for a period that is longer than a “momentary layoff”.

For the most part, when a company ends the employment of a worker who has been continually employed for three months, the company needs to 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 worker is entitled to receive).

The ESA does not need an employer to provide a staff member a reason their work is being ended. There are, however, some circumstances where an employer can not end a staff member’s employment even if the company is prepared to give appropriate composed notification or termination pay. For instance, an employer can not end someone’s work, or punish them in any other method, if any part of the reason for the termination of work is based on the employee asking questions 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 optimums, or taking a leave of absence specified in the ESA. Please see the chapter on reprisals.

Receiving termination notice or pay in lieu

Certain workers are not entitled to discover of termination or termination pay under the ESA. Examples include: employees who are guilty of wilful misconduct, disobedience, or wilful neglect of duty that is not trivial and has actually not been excused by the employer. Other examples include construction employees, workers on temporary layoff, workers who decline an offer of affordable alternative employment and staff members who have been utilized less than 3 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 refer to the special rule tool.

The termination-of-employment rules are entirely different from any entitlements an employee might need to be paid discontinuance wage under the ESA.

Constructive dismissal

A useful dismissal may happen when a company makes a substantial modification to an essential term or condition of a staff member’s employment without the worker’s real or implied consent.

For instance, a staff member might be constructively dismissed if the employer makes changes to the staff member’s terms and conditions of work that lead to a considerable decrease in wage or a considerable unfavorable change in such things as the worker’s work place, hours of work, authority, or position. Constructive termination might also include scenarios where a company harasses or abuses a worker, or an employer offers a staff member a demand to “quit or be fired” and the staff member resigns in reaction.

The employee would need to resign in response to the modification within an affordable duration of time in order for the employer’s actions to be considered a termination of work for functions of the ESA.

Constructive termination is a complex and difficult topic. For more information on positive dismissal, please get in touch with 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 worker’s work without ending their employment (for example, laying somebody off sometimes when there is not sufficient work to do). The mere fact that the company does not define a recall date when laying the worker off does not necessarily suggest that the lay-off is not momentary. Note, nevertheless, that a lay-off, even if meant to be short-lived, may result in constructive termination if it is not enabled by the employment agreement.

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

A week of layoff does not consist of any week in which the worker did not work for several days due to the fact that the staff member was not able or readily available to work, was subject to disciplinary suspension, or was not supplied with work due to the fact that of a strike or lockout at their place of employment or in other places.

Employers are not needed under the ESA to offer workers with a written notice of a short-term layoff, nor do they need to provide a reason 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-term layoff” can last:

1. not more than 13 weeks of layoff in any duration 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 duration of 52 successive weeks, where:- the employee continues to receive substantial payments from the employer;
or

– the employer continues to make payments for the benefit of the staff member under a legitimate group or staff member insurance coverage plan (such as a medical or drug insurance plan) or a legitimate retirement or pension plan;
or

– the employee gets extra unemployment benefits;
or

– the worker would be entitled to receive supplemental joblessness benefits but isn’t getting them due to the fact that they are utilized in other places;
or

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

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

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

If a staff member is laid off for a duration longer than a temporary layoff as set out above, the company is thought about to have ended the worker’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 actually been employed constantly for three months or more if either:

– the company has provided the staff member appropriate composed notification of termination and the notification period has ended

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

Written notice of termination

An employee is entitled to notice of termination (or termination pay instead of notification) if they have been continually employed for a minimum of three months. A person is thought about “employed” not just while they are actively working, but also throughout any time in which they are not working however the employment relationship still exists (for example, time in which the employee is off sick or on leave or on lay-off).

The amount of notification to which an employee is entitled depends on their “duration of employment”. An employee’s duration of employment includes not only all time while the worker is actively working but also at 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 temporary lay-off, the staff member’s work is deemed (or considered) to have been terminated on the first day of the lay-off-any time after that does not count as part of the worker’s period of work, even though the staff member might still be used for functions of the “constantly employed for 3 months” qualification

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

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

The following chart defines the amount 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 workers is ended at an employer’s facility within a four-week duration.

Requirements throughout the statutory notification duration

During the statutory notification period, a company should:

– not lower the employee’s wage rate or change any other term or condition of work;

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

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

Regular rate

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

Regular salaries

These are incomes other than overtime pay, getaway pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and discontinuance wage and specific contractual privileges.

Regular work week

For a worker who normally works the very same variety of hours each week, a regular work week is a week of that numerous hours, not consisting of overtime hours.

Some workers do not have a regular work week. That is, they do not work the same variety of hours each week or they are paid on a basis other than time. For these workers, the “regular earnings” for a “regular work week” is the average amount of the regular salaries made by the staff member in the weeks in which the employee worked throughout the period of 12 weeks immediately preceding the date the notice was offered.

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

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

How to offer written notice

In many cases, composed notice of termination of employment need to be dealt with to the employee. It can be provided personally or by mail, fax or e-mail, as long as shipment can be verified.

There are special rules for supplying notice of termination if a worker has a contract of work or a cumulative arrangement that offers seniority rights that enable a staff member who is to be laid off or whose employment is to be ended to displace (” bump”) other employees.

In that case, the employer must post a notice in the work environment (where it will be seen by the workers) setting out the names, seniority and task category of those staff members the company plans to end and the date of the proposed termination. The publishing of the notification is thought about to be notice of termination, as of the date of the posting, to an employee who is “bumped” by a staff member called in the notice. However, this notice of termination should still fulfill the length requirements set out in the ESA.

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

Termination pay

An employee 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 sum payment equal to the routine earnings for a routine work week that an employee would otherwise have actually been entitled to during the composed notification duration. A worker makes trip pay on their termination pay. Employers must also continue to make whatever contributions would be required to keep the benefits the staff member would have been entitled to had they continued to be used through the notice period.

Example: Regular work week

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

Sarah worked 40 hours a week every week and was paid $20.00 an hour. She also received four percent 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 salaries for a regular work week are computed:

$ 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 determined:

4% of $2,400.00 = $96.00

Finally, her vacation pay is included to her pay:

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The company needs to likewise guarantee ongoing protection for any benefit or pension plans that used to her for 3 weeks.

Example: No routine work week

Gerry has operated at a nursing home for 4 years. He works weekly, but his hours vary 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 provide Gerry any written notification of termination. Gerry was ill and off work for two of the 12 weeks instantly preceding the day his work 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 earnings per week are computed:

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

His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00

Then his vacation pay on his termination pay is computed:

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 likewise make sure ongoing protection for any advantage or pension that applied to him for four weeks.

When to pay termination pay

Termination pay should be paid to a worker either 7 days after the worker’s employment is terminated or on the employee’s next regular pay date, whichever is later on.

Mass termination

Special guidelines for notice of termination might apply in cases of mass termination (when a company is terminating 50 or more staff members at its facility within a four-week period).

Meaning of “facility”

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

– they lie within the exact same town, or

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

Effective October 26, 2023, in cases of mass termination, the term “establishment” consists of a worker’s home, referall.us but just if the staff member works from home and does not operate at any other area where the employer brings on business.

This will need that employees who work exclusively from another location be thought about for inclusion in the count when identifying whether 50 or more workers have actually been ended.

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

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

ABC Company has a workplace and a storage facility 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 work at the workplace.

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

Employer responsibilities in a mass termination

When a mass termination occurs, the company needs to complete and provide 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.

– personal shipment to the Director’s workplace 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 located on the 9th flooring, 400 University Avenue, Toronto ON M7A 1T7.

Any notice to the affected staff members is ruled out to have actually been offered until the Form 1 is received by the Director; in other words, notification of mass termination is not effective up until the Director gets the Form 1.

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

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

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

The quantity of notice staff members need to get in a mass termination is not based upon the workers’ length of work, but on the number of employees who have been ended. An employer needs to give:

– 8 weeks discover if the employment of 50 to 199 employees is to be ended

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

– 16 weeks see if the employment of 500 or more workers is to be ended

Exception to the mass termination rules

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

– the variety of staff members whose work is being ended represents not more than 10 per cent of the employees who have been utilized for a minimum of three months at the establishment

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

Mass termination: resignation by a staff member

A staff member who has received termination notice under the mass termination guidelines who wishes to resign before the termination date supplied in the employer’s notification should offer the company at least one week’s written notification of resignation if the staff member has been utilized for less than two years. If the work duration has been two years or more, the worker must provide at least 2 weeks’ composed notification of resignation. However, the worker does not have to notify of resignation if the company constructively dismisses the worker or breaches a regard to the contract.

Temporary work after termination date in notice

A company can supply work to a worker who has been offered notice of termination on a momentary basis in the 13-week period after the termination date set out in the notification without impacting the initial date of the termination and without being required to offer any additional notice of termination to the staff member when the short-lived work ends.

If an employee works beyond the 13-week period after the termination date and after that has their employment ended, the worker will be entitled to a new written notice of termination as if the previous notice had actually never been provided. The staff member’s period of work will then also consist of the period of momentary work.

Recall rights

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

A worker 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 discontinuance wage, if they were entitled to discontinuance wage) at that time;
or

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

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

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

If an employee chooses to quit their recall rights or if the recall rights expire, the money that is held in trust needs to be sent to the worker.

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

Exemptions to observe 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 also describe the unique rule tool.

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

– is guilty of wilful misconduct, disobedience or wilful neglect of task that is not insignificant and has not been condoned by the company. Note: “wilful” consists of when a worker planned the resulting consequence or acted recklessly if they knew or ought to have known the effects their conduct would have. Poor work conduct that is accidental or unintentional is normally ruled out wilful;

– was hired for a particular length of time or up until the completion of a specific job. However, such a worker will be entitled to see of termination or termination pay if:- the work ends before the term ends or the task is finished; or

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

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

See likewise: Employment Standards Self-Service Tool

Wrongful termination

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

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 see of termination (or termination pay) and discontinuance wage under the ESA. An employee may want to sue their previous employer in court for “wrongful dismissal”. Employees need to be aware that they can not take legal action against an employer for wrongful dismissal and submit a claim for termination pay or discontinuance wage with the ministry for the exact same termination or severance of work. A worker must select one or the other. Employees might want to get legal guidance concerning their rights.