Termination Of Employment

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

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

– dismisses or stops using a staff member, consisting of where a staff member is no longer utilized due to the personal bankruptcy or insolvency of the company;

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

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

In most cases, employment when a company ends the employment of a staff member who has actually been continuously utilized for 3 months, the company should provide the staff member with either written notice of termination, termination pay or a combination (as long as the notice and the variety of weeks of termination pay together equivalent the length of notice the staff member is entitled to receive).

The ESA does not require an employer to give an employee a reason their employment is being terminated. There are, however, some scenarios where an employer can not end an employee’s employment even if the employer is prepared to offer appropriate composed notification or termination pay. For example, a company can not end someone’s employment, or penalize them in any other way, if any part of the factor for the termination of employment is based upon the staff member asking questions about the ESA or working out a right under the ESA, such as declining to work in excess of the day-to-day or weekly hours of work maximums, or taking a leave of absence defined in the ESA. Please see the chapter on reprisals.

Getting approved for termination notice or pay in lieu

Certain staff members are not entitled to observe of termination or termination pay under the ESA. Examples consist of: workers who are guilty of wilful misconduct, disobedience, or wilful overlook of task that is not insignificant and has actually not been condoned by the employer. Other examples include building and construction workers, workers on temporary layoff, employees who decline an offer of reasonable alternative work and employees who have been used 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 entitlements a worker may need to be paid discontinuance wage under the ESA.

Constructive termination

A constructive termination might happen when an employer makes a considerable modification to an essential term or condition of a worker’s employment without the employee’s actual or implied permission.

For instance, a worker might be constructively dismissed if the employer makes modifications to the staff member’s terms and conditions of work that lead to a significant decrease in income or a significant negative change in such things as the employee’s work location, hours of work, authority, or position. Constructive termination might likewise consist of situations where an employer bothers or abuses a worker, or an employer provides a staff member a demand to “quit or be fired” and the staff member resigns in response.

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

Constructive termination is a complex and challenging subject. To learn more on positive dismissal, please call the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A worker is on temporary layoff when an employer cuts back or stops the worker’s work without ending their employment (for example, laying somebody off at times when there is not sufficient work to do). The mere fact that the employer does not define a recall date when laying the employee off does not always indicate that the lay-off is not short-term. Note, however, that a lay-off, even if planned to be temporary, may lead to positive dismissal if it is not enabled by the work contract.

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

A week of layoff does not consist of any week in which the employee did not work for several days due to the fact that the staff member was not able or offered to work, underwent disciplinary suspension, or was not provided with work due to the fact that of a strike or lockout at their location of employment or elsewhere.

Employers are not required under the ESA to supply workers with a composed notification of a short-term layoff, nor do they need to offer a reason for the lay-off. (They may, however, be needed to do these things under a collective contract or a work agreement.)

Under the ESA, a “temporary 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, however less than 35 weeks of layoff in any duration of 52 successive weeks, where:- the employee continues to receive considerable payments from the employer;
or

– the employer continues to pay for the advantage of the worker under a legitimate group or staff member insurance strategy (such as a medical or drug insurance strategy) or employment a legitimate retirement or pension;
or

– the staff member receives additional unemployment benefits;
or

– the staff member would be entitled to get supplemental joblessness benefits however isn’t getting them due to the fact that they are utilized elsewhere;
or

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

– the company recalls the worker 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 described in ‘B’ where the company remembers an employee who is represented by a trade union within the time set out in a contract in between the union and the employer.

If a staff member is laid off for a duration longer than a temporary layoff as set out above, the company is considered to have ended the worker’s work. Generally, the staff member will then be entitled to termination pay.

Written notice of termination and termination pay

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

– the company has actually offered the employee correct composed notice of termination and the notice duration has ended

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

Written notification of termination

An employee is entitled to discover of termination (or termination pay instead of notification) if they have actually been continually utilized for at least three months. A person is considered “used” not only while they are actively working, but likewise during any time in which they are not working however the employment relationship still exists (for instance, time in which the worker is off ill or on leave or on lay-off).

The quantity of notification to which a worker is entitled depends on their “period of work”. An employee’s period of employment includes not just all time while the employee is working but likewise any time that they are not working however the work relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a short-term lay-off, the employee’s employment is considered (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, despite the fact that the staff member may still be used for functions of the “constantly used for three months” certification

– if 2 different durations of work are separated by more than 13 weeks, just the most recent period counts for purposes of notice of termination

It is possible, in some situations, for a person to have actually been “continuously utilized” for 3 months or more and yet have a period of work of less than three months. In such scenarios, the staff member would be entitled to observe because an employee who has actually been constantly employed for a minimum of three months is entitled to see, and the minimum notification privilege of one week applies to an employee with a period of work of any length less than one year.

The following chart defines the amount of notice required:

Note: Special rules figure out the amount of notification needed in the case of mass terminations – where the work of 50 or more staff members is ended at an employer’s facility within a four-week duration.

Requirements throughout the statutory notice period

During the statutory notification duration, a company must:

– not minimize the staff member’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 advantages plans; and

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

Regular rate

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

Regular earnings

These are wages other than overtime pay, trip pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and employment severance pay and certain contractual entitlements.

Regular work week

For an employee who typically works the very same variety of hours each week, a regular work week is a week of that many hours, not consisting of overtime hours.

Some staff members do not have a routine work week. That is, they do not work the very same variety of hours each week or they are paid on a basis other than time. For these employees, the “regular wages” for a “regular work week” is the average amount of the routine earnings made by the worker in the weeks in which the staff member worked during the duration of 12 weeks instantly preceding the date the notice was offered.

An employer is not allowed to set up a staff member’s vacation time throughout the statutory notification period unless the employee-after receiving composed notice of termination of employment-agrees to take their trip time during the notification period.

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

How to offer written notice

Most of the times, composed notice of termination of employment must be dealt with to the employee. It can be supplied face to face or by mail, fax or email, as long as shipment can be verified.

There are unique rules for providing notification of termination if a staff member has a contract of employment or a collective agreement that offers seniority rights that allow a staff member who is to be laid off or whose work is to be terminated to displace (” bump”) other employees.

Because case, the employer needs to post a notification in the office (where it will be seen by the employees) setting out the names, seniority and task classification of those workers the employer plans to end and the date of the proposed termination. The posting of the notice is thought about to be notification of termination, as of the date of the publishing, to a staff member who is “bumped” by a worker called in the notice. However, this notice of termination should still satisfy the length requirements set out in the ESA.

There are likewise special guidelines relating to 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 needs to be given termination pay in lieu of notification. Termination pay is a lump sum payment equivalent to the routine wages for a routine work week that a worker would otherwise have been entitled to during the composed notice period. A worker makes vacation pay on their termination pay. Employers need to likewise continue to make whatever contributions would be needed to preserve the advantages 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 employment has been ended. Sarah was not offered any composed notice of termination.

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

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

$ 20.00 an hour X 40 hours a week = $800.00 a week

Her termination pay is determined:

$ 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 holiday pay is contributed to her termination pay:

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The employer should also make sure ongoing protection for any benefit or pension that used to her for three weeks.

Example: No routine work week

Gerry has worked at an assisted living home for four years. He works each week, employment 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 offer Gerry any composed notification of termination. Gerry was ill and off work for two of the 12 weeks immediately preceding the day his employment was terminated. Gerry made $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 revenues per week are computed:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for two weeks for that reason these weeks are not consisted of in the estimation 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 calculated:

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 plans that applied to him for 4 weeks.

When to pay termination pay

Termination pay should be paid to a worker either seven days after the staff member’s work is ended or on the worker’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 employees at its establishment within a four-week period).

Meaning of “facility”

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

– they lie within the same town, or

– a staff member at one area has legal seniority rights that reach 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 “facility” consists of a worker’s home, however just if the employee works from home and does not operate at any other area where the company brings on organization.

This will require that workers who work exclusively from another location be thought about for inclusion in the count when determining whether 50 or more workers have actually been terminated.

Note that where an employee carries out work both from their home and from another location where the employer continues business (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 place and, for that reason, for the function of mass termination, the worker is consisted of with regard to that office place.

Example: where several places are considered one “facility”

ABC Company has a workplace and a warehouse situated in London, ON. Sabrina lives in London and works for ABC Company specifically 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 office, London warehouse and Sabrina’s London home are considered one “facility.”

Employer responsibilities in a mass termination

When a mass termination takes place, the company must finish 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 delivery 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 verified.

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

Any notification to the affected employees is not considered to have been provided till the Form 1 is gotten by the Director; in other words, notice of mass termination is ineffective till the Director receives the Form 1.

In addition to supplying staff members with specific notices of termination, the company must, on the very first day of the notification duration:

– publish a copy of the Form 1 offered to the Director in the work environment where it will come to the attention of the affected employees.

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

The amount of notice workers must receive in a mass termination is not based upon the employees’ length of employment, but on the number of workers who have actually been ended. A company needs to offer:

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

– 12 weeks discover if the work of 200 to 499 workers is to be terminated

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

Exception to the mass termination rules

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

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

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

Mass termination: resignation by a worker

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

Temporary work after termination date in notification

A company can supply work to a worker who has been provided notice of termination on a momentary basis in the 13-week duration after the termination date set out in the notice without affecting the initial date of the termination and without being required to provide any further notice of termination to the staff member when the temporary work ends.

If a worker works beyond the 13-week duration after the termination date and then has their employment terminated, the worker will be entitled to a brand-new written notice of termination as if the previous notification had actually never been given. The worker’s period of employment will then also consist of the period of short-lived 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 work. This right is frequently discovered in collective agreements.

An employee 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 discontinuance wage) at that time;
or

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

If a worker is entitled to both termination pay and severance pay, they need to make the very 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 choose, 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 money in trust.

If an employee who is represented by a trade union elects to keep their recall rights or fails to decide, the employer and the trade union should try to come to a plan 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 advises the company and the Director of Employment Standards in composing that efforts have failed, the employer needs to send out 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 end, the money that is kept in trust needs to be sent out to the worker.

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

Exemptions to see of termination or termination pay

A number of these exemptions are complicated. Please contact the Employment Standards Information Centre, 1-800-531-5551, if you require more details. Please likewise describe the special rule tool.

The notice of termination and termination pay requirements of the ESA do not use to a worker who:

– is guilty of wilful misconduct, disobedience or wilful disregard of responsibility that is not minor and has not been condoned by the company. Note: “wilful” consists of when a staff member intended the resulting repercussion or acted recklessly if they knew or need to have known the effects their conduct would have. Poor work conduct that is unexpected or unintentional is typically ruled out wilful;

– was worked with for a specific length of time or up until the completion of a particular task. 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 employment began; or

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

See also: Employment Standards Self-Service Tool

Wrongful termination

Rights higher than ESA notice of termination, termination pay, discontinuance wage

The rules under the ESA about termination and severance of employment are minimum requirements. Some employees may have rights under the typical law that are greater than the rights to observe of termination (or termination pay) and severance pay under the ESA. A worker may wish to sue their former company in court for “wrongful dismissal”. Employees must be aware that they can not sue an employer for wrongful termination and file a claim for termination pay or discontinuance wage with the ministry for the same termination or severance of work. An employee needs to choose one or the other. Employees may want to get legal guidance concerning their rights.