Termination Of Employment

A number of expressions are frequently utilized to describe situations when employment is ended. These consist of “let go,” “discharged,” “dismissed,” “fired” and “permanently laid off.”

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

– dismisses or stops using an employee, employment consisting of where an employee is no longer employed due to the personal bankruptcy or insolvency of the company;

– “constructively” dismisses a worker and the worker resigns, in reaction, within a reasonable time;

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

In the majority of cases, when an employer ends the employment of a staff member who has been constantly utilized for 3 months, the company must supply the employee with either written notification of termination, termination pay or a mix (as long as the notice and the number of weeks of termination pay together equal the length of notice the staff member is entitled to receive).

The ESA does not require an employer to offer an employee a reason why their employment is being ended. There are, nevertheless, some scenarios where a company can not end a staff member’s work even if the company is prepared to provide proper written notification or termination pay. For instance, a company can not end somebody’s work, or punish them in any other way, employment if any part of the reason for the termination of employment is based upon the employee asking concerns about the ESA or exercising a right under the ESA, such as declining to work in excess of the day-to-day or weekly hours of work optimums, or taking a leave of lack specified in the ESA. Please see the chapter on reprisals.

Getting approved for termination notification or pay in lieu

Certain staff members are not entitled to observe of termination or termination pay under the ESA. Examples include: employees who are guilty of wilful misbehavior, disobedience, or wilful disregard of duty that is not insignificant and has not been excused by the company. Other examples consist of construction staff members, workers on short-lived layoff, staff members who refuse an offer of reasonable alternative work and workers who have been utilized less than 3 months.

There are a variety of other exemptions to the termination of work provisions of the ESA. See “Exemptions to discover of termination or termination pay.” Please likewise describe the unique rule tool.

The termination-of-employment guidelines are totally separate from any privileges a worker may have to be paid severance pay under the ESA.

Constructive dismissal

A useful termination might take place when an employer makes a significant modification to a fundamental term or condition of an employee’s work without the staff member’s real or implied approval.

For instance, a worker might be constructively dismissed if the company makes modifications to the employee’s terms and conditions of employment that lead to a significant decrease in salary or a significant negative change in such things as the staff member’s work place, hours of work, authority, or position. Constructive dismissal might also consist of scenarios where a company bothers or abuses an employee, or a company offers a worker a demand to “quit or be fired” and the employee resigns in reaction.

The worker would have to resign in reaction to the modification within a reasonable duration of time in order for the employer’s actions to be thought about a termination of employment for purposes of the ESA.

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

Temporary layoff

A worker is on short-lived layoff when an employer cuts down or stops the staff member’s work without ending their employment (for example, laying someone off sometimes when there is not adequate work to do). The mere truth that the company does not define a recall date when laying the employee off does not always imply that the lay-off is not momentary. Note, nevertheless, that a lay-off, even if intended to be momentary, might lead to useful dismissal if it is not enabled by the work contract.

For the functions of the termination provisions of the ESA, a “week of layoff” is a week in which the worker made less than half of what they would generally make (or earns typically) 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 due to the fact that the staff member was not able or available to work, was subject to disciplinary suspension, or was not supplied with work because of a strike or lockout at their location of work or elsewhere.

Employers are not needed under the ESA to offer workers with a composed notification of a temporary layoff, nor do they have to supply a reason for the lay-off. (They may, however, be needed to do these things under a collective arrangement or a work 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 consecutive weeks, but less than 35 weeks of layoff in any period of 52 successive weeks, where:- the worker continues to receive considerable payments from the employer;
or

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

– the employee receives supplementary welfare;
or

– the staff member would be entitled to get additional welfare however isn’t getting them due to the fact that they are employed somewhere else;
or

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

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

3. a layoff longer than a layoff described in ‘B’ where the employer remembers an employee 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 period longer than a temporary layoff as set out above, the company is thought about to have terminated the staff member’s work. Generally, employment the employee 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 staff member who has actually been employed continuously for 3 months or more if either:

– the company has actually provided the employee proper written notice of termination and the notice period has actually ended

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

Written notice of termination

A worker is entitled to see of termination (or termination pay rather of notice) if they have actually been continuously used for a minimum of three months. A person is considered “utilized” not only while they are actively working, however also during whenever in which they are not working but the work relationship still exists (for instance, time in which the worker is off ill or on leave or on lay-off).

The amount of notice to which a worker is entitled depends upon their “duration of employment“. An employee’s period of work includes not just perpetuity while the employee 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 short-lived lay-off, the worker’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 employee’s period of work, although the employee may still be employed for purposes of the “constantly employed for 3 months” credentials

– if two separate durations of work are separated by more than 13 weeks, only the most current period counts for purposes of notice of termination

It is possible, in some circumstances, for a person to have been “continually used” for 3 months or more and yet have a period of work of less than 3 months. In such situations, the staff member would be entitled to see since a worker who has been continually utilized for at least three months is entitled to see, and the minimum notification privilege of one week uses to a staff member with a period of employment of any length less than one year.

The following chart specifies the quantity of notice needed:

Note: Special guidelines determine the amount of notification required when it comes to mass terminations – where the employment of 50 or more workers is terminated at an employer’s establishment within a four-week duration.

Requirements throughout the statutory notice duration

During the statutory notice duration, an employer must:

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

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

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

Regular rate

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

Regular earnings

These are wages aside from overtime pay, getaway pay, employment public holiday 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 typically works the very same number of hours weekly, a routine work week is a week of that many hours, not consisting of overtime hours.

Some workers do not have a routine work week. That is, they do not work the very same number of hours weekly or they are paid on a basis other than time. For these staff members, the “routine wages” for a “routine work week” is the typical amount of the routine wages earned by the employee in the weeks in which the employee worked throughout the period of 12 weeks immediately preceding the date the notice was offered.

An employer is not permitted to arrange a staff member’s vacation time during the statutory notification period unless the employee-after getting composed notice of termination of employment-agrees to take their getaway time throughout the notification period.

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

How to supply written notification

For the most part, written notice of termination of employment must be addressed to the worker. It can be provided face to face or by mail, fax or email, as long as shipment can be confirmed.

There are unique rules for providing notice of termination if a worker has an agreement of work or a cumulative arrangement that supplies seniority rights that enable an employee who is to be laid off or whose employment is to be ended to displace (” bump”) other employees.

In that case, the employer should post a notice in the office (where it will be seen by the employees) setting out the names, seniority and job category of those employees the employer means to end and the date of the proposed termination. The publishing of the notification is considered to be notice of termination, as of the date of the posting, to a staff member who is “bumped” by a staff member called in the notification. However, this notification of termination need to still fulfill the length requirements set out in the ESA.

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

Termination pay

An employee who does not get the composed notice needed under the ESA must be given termination pay in lieu of notification. Termination pay is a lump amount payment equivalent to the routine wages for a regular work week that a worker would otherwise have actually been entitled to during the composed notice period. An employee earns vacation pay on their termination pay. Employers should also continue to make whatever contributions would be required to maintain 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 task has been eliminated and her work has been ended. Sarah was not offered any composed notification of termination.

Sarah worked 40 hours a week every week and was paid $20.00 an hour. She also got 4 per cent holiday pay. Because she worked for more than 3 years but 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 determined:

$ 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 vacation pay on her termination pay is determined:

4% of $2,400.00 = $96.00

Finally, her vacation pay is included 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 coverage for any benefit or pension strategies that applied to her for three weeks.

Example: No routine work week

Gerry has operated at a retirement home for employment four years. He works each week, 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 company eliminated 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 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 incomes each week are determined:

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

His termination pay is computed:

$ 180.00 × 4 weeks = $720.00

Then his holiday pay on his termination pay is determined:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company needs to also ensure ongoing protection for any advantage or pension plans that applied to him for 4 weeks.

When to pay termination pay

Termination pay must be paid to a worker either 7 days after the staff member’s work is terminated or on the staff member’s next regular pay date, whichever is later on.

Mass termination

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

Meaning of “establishment”

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

– they lie within the very same town, or

– a worker at one area has contractual seniority rights that reach the other location, enabling the staff member to displace another worker (likewise called “bumping rights”).

Effective October 26, 2023, in cases of mass termination, the term “facility” consists of an employee’s home, however only if the employee works from home and does not operate at any other place where the company continues company.

This will require that staff members who work exclusively remotely be considered for inclusion in the count when determining whether 50 or more workers have actually been ended.

Note that where an employee performs work both from their home and from another place where the company continues service (for example, an office), their home is not consisted of in the definition of “establishment”. Instead, the worker is thought about to have a connection to the office place and, for that reason, for the function of mass termination, the worker is consisted of with regard to that office area.

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

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

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

Employer responsibilities in a mass termination

When a mass termination happens, the company needs to complete 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.

– personal delivery 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 office of the Director of Employment Standards is found on the 9th floor, 400 University Avenue, Toronto ON M7A 1T7.

Any notification to the impacted staff members is not considered to have actually been offered up until the Form 1 is gotten by the Director; in other words, notice of mass termination is ineffective up until the Director receives the Form 1.

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

– publish a copy of the Form 1 supplied to the Director in the workplace where it will to the attention of the impacted employees.

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

The amount of notice employees should get in a mass termination is not based on the employees’ length of work, however on the number of employees who have actually been ended. An employer must provide:

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

– 12 weeks observe 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 terminated

Exception to the mass termination guidelines

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

– the number of staff members whose employment is being ended represents not more than 10 percent of the employees who have been utilized for at least 3 months at the establishment

– none of the terminations are triggered by the long-term discontinuance of all or part of the employer’s organization at the facility

Mass termination: resignation by a worker

A staff member who has received termination notification under the mass termination guidelines who desires to resign before the termination date provided in the employer’s notification need to give the company at least one week’s written notice of resignation if the worker has actually been employed for less than two years. If the employment period has actually been 2 years or more, the staff member needs to offer a minimum of 2 weeks’ written notice of resignation. However, the employee does not need to notify of resignation if the company constructively dismisses the staff member or breaches a term of the agreement.

Temporary work after termination date in notification

An employer can provide work to a staff member who has been given notice of termination on a momentary basis in the 13-week period after the termination date set out in the notification without affecting the original date of the termination and without being required to offer any further notice of termination to the worker when the short-term work ends.

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

Recall rights

A “recall right” is the right of a staff member on a layoff to be recalled to work by their company under a term or condition of work. This right is typically found in cumulative contracts.

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

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

If a worker 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 elects to keep their recall rights or stops working to decide, the company should send the quantity of the termination pay (and severance pay, 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 fails to choose, the employer and the trade union should attempt to come to a plan to hold the termination pay (and discontinuance wage, if any) in trust for the employee. If they can not come to a plan, and the trade union encourages the company and the Director of Employment Standards in writing that efforts have actually failed, the employer should 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 held in trust should be sent out to the employee.

If the staff member accepts a recall back to work, the cash that is kept in trust will be returned to the employer.

Exemptions to see of termination or termination pay

A lot of these exemptions are intricate. Please contact the Employment Standards Information Centre, 1-800-531-5551, if you require more info. Please also describe the unique guideline tool.

The notification of termination and termination pay requirements of the ESA do not use to an employee who:

– is guilty of wilful misbehavior, disobedience or wilful disregard of task that is not trivial and has actually not been excused by the company. Note: “wilful” consists of when an employee meant the resulting effect or acted recklessly if they knew or need to have understood the effects their conduct would have. Poor work conduct that is accidental or unintentional is usually not considered wilful;

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

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

– the work continues for three months or more after the term ends or the job is completed;

See likewise: Employment Standards Self-Service Tool

Wrongful termination

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

The guidelines under the ESA about termination and severance of work are minimum requirements. Some staff members might have rights under the common law that are higher than the rights to notice of termination (or termination pay) and severance pay under the ESA. An employee might wish to sue their previous company in court for “wrongful termination”. Employees ought to understand that they can not sue a company for wrongful termination and sue for termination pay or discontinuance wage with the ministry for the exact same termination or severance of employment. A worker must pick one or the other. Employees might wish to acquire legal suggestions worrying their rights.