Termination Of Employment

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

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

– dismisses or stops using a staff member, including where a staff member is no longer utilized due to the insolvency or insolvency of the employer;

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

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

In many cases, when an employer ends the work of a staff member who has actually been continually utilized for 3 months, the employer needs to offer the staff member with either composed notification 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 notification the worker is entitled to receive).

The ESA does not need an employer to provide an employee a reason their work is being terminated. There are, however, some circumstances where an employer can not end a worker’s employment even if the company is prepared to give proper written notification or termination pay. For instance, a company can not end somebody’s employment, or employment punish them in any other method, if any part of the factor for the termination of employment is based upon the worker asking questions about the ESA or working out a right under the ESA, such as refusing to work in excess of the daily or weekly hours of work optimums, or taking a leave of lack defined in the ESA. Please see the chapter on reprisals.

Qualifying for termination notice or pay in lieu

Certain employees are not entitled to see of termination or termination pay under the ESA. Examples consist of: employees who are guilty of wilful misconduct, disobedience, or wilful neglect of responsibility that is not minor and has actually not been excused by the company. Other examples include construction staff members, staff members on short-lived layoff, workers who decline a deal of affordable alternative work and employees who have actually been utilized less than three months.

There are a variety of other exemptions to the termination of employment arrangements of the ESA. See “Exemptions to see of termination or termination pay.” Please likewise refer to the unique rule tool.

The termination-of-employment rules are entirely different from any entitlements a worker may have to be paid discontinuance wage under the ESA.

Constructive termination

A constructive termination may happen when an employer makes a significant modification to a fundamental term or condition of a staff member’s employment without the employee’s real or implied authorization.

For example, an employee might be constructively dismissed if the employer makes changes to the staff member’s conditions of work that lead to a considerable reduction in wage or a substantial negative change in such things as the staff member’s work place, hours of work, authority, or position. Constructive termination might likewise include scenarios where a company harasses or abuses a worker, employment or a company offers a worker an ultimatum to “quit or be fired” and the worker resigns in action.

The employee would need to resign in response to the modification within a reasonable period of time in order for the company’s actions to be considered a termination of work for purposes of the ESA.

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

Temporary layoff

An employee is on short-lived 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 inadequate work to do). The simple reality that the employer does not define a recall date when laying the employee off does not necessarily imply that the lay-off is not temporary. Note, nevertheless, that a lay-off, even if planned to be short-lived, might lead to positive dismissal if it is not enabled by the work agreement.

For employment the functions 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 generally earn (or makes on average) in a week.

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

Employers are not required under the ESA to offer workers with a written notification of a momentary layoff, nor do they have to provide a factor for the lay-off. (They may, however, be required to do these things under a collective contract or an employment agreement.)

Under the ESA, a “short-lived layoff” can last:

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

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

– the staff member gets supplementary joblessness advantages;
or

– the employee would be entitled to receive extra welfare but isn’t getting them due to the fact that they are employed in other places;
or

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

– the employer remembers the worker within the time frame set out in an arrangement with a worker who is not represented by a trade union;
or

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

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

Written notification of termination and termination pay

Under the ESA, a company can terminate the employment of a worker who has been used continually for 3 months or more if either:

– the employer has actually given the staff member correct written notice of termination and the notice period has ended

– the company pays termination pay to the staff member where no composed notice or less notice than is needed is offered

Written notice of termination

An employee is entitled to notice of termination (or termination pay rather of notice) if they have been continuously utilized for at least 3 months. A person is thought about “used” not just while they are actively working, but also during at any time in which they are not working but the employment relationship still exists (for example, time in which the worker is off sick or on leave or on lay-off).

The quantity of notification to which an employee is entitled depends upon their “period of employment”. An employee’s period of work consists of not only perpetuity while the employee is actively working however likewise at any time that they are not working but the employment relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a momentary lay-off, employment the worker’s work is considered (or considered) to have been ended on the very first day of the lay-off-any time after that does not count as part of the worker’s duration of work, despite the fact that the employee may still be utilized for purposes of the “continually utilized for 3 months” qualification

– if 2 different 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 circumstances, for an individual to have actually been “continually used” for three months or more and yet have a duration of work of less than 3 months. In such scenarios, the worker would be entitled to see since a staff member who has actually been constantly used for at least three months is entitled to discover, and 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 needed:

Note: Special guidelines identify the quantity of notice required in the case of mass terminations – where the work of 50 or more employees is terminated at an employer’s facility within a four-week period.

Requirements during the statutory notification duration

During the statutory notification period, an employer must:

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

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

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

Regular rate

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

Regular wages

These are earnings other than 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 specific legal privileges.

Regular work week

For a staff member who normally works the same number of hours each week, a routine work week is a week of that lots of hours, not consisting of overtime hours.

Some workers do not have a routine work week. That is, they do not work the exact same number of hours every week or they are paid on a basis other than time. For these staff members, the “routine earnings” for a “routine work week” is the typical amount of the routine salaries made by the employee in the weeks in which the worker worked during the period of 12 weeks right away preceding the date the notice was provided.

An employer is not permitted to schedule 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 notification duration.

If a company offers longer notification than is needed, employment the statutory part of the notice period is the tail end of the duration that ends on the date of termination.

How to supply written notice

Most of the times, composed notification of termination of employment must be resolved to the employee. It can be offered personally or by mail, fax or email, as long as delivery can be verified.

There are unique guidelines for supplying notice of termination if a staff member has an agreement of work or a cumulative agreement that offers seniority rights that allow a staff member who is to be laid off or whose employment is to be terminated to displace (” bump”) other staff members.

In that case, the company should post a notice in the workplace (where it will be seen by the employees) setting out the names, seniority and job classification of those workers the company means to terminate 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 posting, to an employee who is “bumped” by an employee named in the notification. However, this notification of termination must still meet the length requirements set out in the ESA.

There are likewise special guidelines regarding how notice is offered when there is a mass termination.

Termination pay

A staff member who does not get the composed notice required under the ESA must be provided termination pay in lieu of notification. Termination pay is a lump sum payment equal to the regular wages for a regular work week that a worker would otherwise have been entitled to during the composed notification period. A staff member makes trip pay on their termination pay. Employers should also continue to make whatever contributions would be required to preserve the benefits the worker would have been entitled to had they continued to be utilized through the notice period.

Example: Regular work week

Sarah has actually worked for three and a half years. Now her task has been eliminated and her work has actually been terminated. Sarah was not provided any composed notice of termination.

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

Sarah’s routine 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 vacation pay on her termination pay is calculated:

4% of $2,400.00 = $96.00

Finally, her getaway 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 also guarantee ongoing protection for any benefit or pension that used to her for three weeks.

Example: No regular work week

Gerry has actually 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 trip pay.

Gerry’s employer eliminated his position and did not give Gerry any written notice of termination. Gerry was ill and off work for two of the 12 weeks right away preceding the day his work was ended. Gerry earned $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 earnings per week are calculated:

$ 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 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 holiday pay is added to his termination pay:

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company should also ensure continued coverage for any benefit or pension that used to him for four weeks.

When to pay termination pay

Termination pay must be paid to a staff member either seven days after the staff member’s work is ended or on the staff member’s next regular pay date, whichever is later.

Mass termination

Special rules for notification of termination may use in cases of mass termination (when an employer is ending 50 or more staff members at its establishment within a four-week period).

Meaning of “facility”

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

– they are located within the very same town, or

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

Effective October 26, 2023, in cases of mass termination, the term “establishment” includes a staff member’s home, however just if the employee works from home and does not work at any other area where the employer brings on service.

This will require that workers who work specifically from another location be considered for inclusion in the count when identifying whether 50 or more workers have actually been ended.

Note that where a staff member performs work both from their home and from another area where the employer continues service (for example, a workplace), their home is not included in the definition of “facility”. Instead, the employee is thought about to have a connection to the office area and, therefore, for the function of mass termination, the staff member is included with regard to that workplace place.

Example: where numerous places are considered one “facility”

ABC Company has an office and a storage facility situated in London, ON. Sabrina lives 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 business’s London office, London warehouse and Sabrina’s London home are thought about one “establishment.”

Employer obligations in a mass termination

When a mass termination takes place, the employer needs to finish 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 shipment can be validated.

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

Any notice to the impacted staff members is not thought about to have been given till the Form 1 is received by the Director; simply put, notice of mass termination is ineffective till the Director receives the Form 1.

In addition to supplying employees with private notices of termination, the employer must, on the first day of the notification duration:

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

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

The quantity of notice employees must receive in a mass termination is not based on the workers’ length of employment, but on the variety of employees who have actually been ended. An employer needs to offer:

– 8 weeks observe if the work of 50 to 199 workers is to be ended

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

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

Exception to the mass termination rules

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

– the variety of staff members whose work is being terminated represents not more than 10 percent of the employees who have actually been employed for at least 3 months at the facility

– none of the terminations are triggered by the irreversible discontinuance of all or part of the employer’s service at the facility

Mass termination: resignation by a worker

A worker who has gotten termination notice under the mass termination guidelines who wants to resign before the termination date supplied in the employer’s notification must offer the company at least one week’s written notification of resignation if the employee has actually been utilized for less than two years. If the employment period has actually been 2 years or more, the employee needs to provide a minimum of two weeks’ composed notice of resignation. However, the employee does not have to offer notification of resignation if the company constructively dismisses the worker or breaches a regard to the agreement.

Temporary work after termination date in notice

A company can provide work to a worker who has actually been notified of termination on a short-term basis in the 13-week duration after the termination date set out in the notice without impacting the original date of the termination and without being required to provide any further notification of termination to the employee when the momentary work ends.

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

Recall rights

A “recall right” is the right of a worker on a layoff to be recalled to work by their employer under a term or condition of employment. This right is commonly discovered in cumulative arrangements.

A staff member who has recall rights and who is entitled to termination pay because of a layoff of 35 weeks or more may choose to:

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

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

If a staff member is entitled to both termination pay and discontinuance wage, 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 stops working to decide, the employer needs to send out the amount 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 chooses to keep their recall rights or stops working to choose, the employer 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 worker. If they can not concern an arrangement, and the trade union advises the company and the Director of Employment Standards in writing that efforts have stopped working, the company needs to send the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the money in trust.

If a staff member selects to quit their recall rights or if the recall rights expire, the cash that is kept in trust must be sent out to the staff member.

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 number of these exemptions are intricate. Please contact the Employment Standards Information Centre, 1-800-531-5551, if you require more information. Please also refer to the unique guideline tool.

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

– is guilty of wilful misbehavior, disobedience or wilful disregard of task that is not and has actually not been condoned by the employer. Note: “wilful” consists of when a worker intended the resulting repercussion or acted recklessly if they knew or ought to have understood the impacts their conduct would have. Poor work conduct that is accidental or unintended is usually ruled out wilful;

– was worked with for a particular length of time or till the completion of a particular job. However, such an employee will be entitled to see of termination or termination pay if:- the employment ends before the term ends or the job is completed; or

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

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

See likewise: Employment Standards Self-Service Tool

Wrongful termination

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

The guidelines under the ESA about termination and severance of employment are minimum requirements. Some staff members may have rights under the common law that are higher than the rights to discover of termination (or termination pay) and severance pay under the ESA. An employee might want to sue their previous company in court for “wrongful termination”. Employees should understand that they can not sue a company for wrongful dismissal and file a claim for termination pay or severance pay with the ministry for the very same termination or severance of work. A staff member should choose one or the other. Employees might want to obtain legal advice concerning their rights.