Termination Of Employment

A variety of expressions are typically utilized to explain scenarios when work is terminated. These include “let go,” “released,” “dismissed,” “fired” and “permanently laid off.”

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

– dismisses or stops using a worker, including where a worker is no longer utilized due to the bankruptcy or insolvency of the company;

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

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

In many cases, when a company ends the work of an employee who has actually been constantly utilized for three months, the company should offer the employee with either written notice of termination, termination pay or a combination (as long as the notice and the number of weeks of termination pay together equivalent the length of notice the worker is entitled to receive).

The ESA does not need a company to offer a staff member a reason why their work is being ended. There are, nevertheless, some circumstances where an employer can not end a staff member’s employment even if the employer is prepared to give proper written notice or termination pay. For instance, an employer can not end someone’s employment, or penalize them in any other method, 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 everyday 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 staff members are not entitled to observe of termination or termination pay under the ESA. Examples consist of: employees who are guilty of wilful misconduct, disobedience, or wilful overlook of duty that is not unimportant and has not been excused by the company. Other examples include building and construction workers, staff members on momentary layoff, employees who refuse an offer of affordable alternative employment and staff members who have actually been utilized less than 3 months.

There are a variety of other exemptions to the termination of employment arrangements of the ESA. See “Exemptions to discover of termination or termination pay.” Please also describe the special rule tool.

The termination-of-employment guidelines are entirely different from any privileges a staff member may need to be paid severance pay under the ESA.

Constructive dismissal

A useful dismissal might take place when an employer makes a substantial modification to a fundamental term or condition of an employee’s work without the worker’s actual or employment implied authorization.

For example, an employee may be constructively dismissed if the employer makes changes to the employee’s conditions of employment that result in a significant reduction in wage or a significant negative change in such things as the worker’s work area, employment hours of work, authority, or position. Constructive termination may also consist of situations where an employer bothers or abuses a staff member, or an employer offers an employee a demand to “quit or be fired” and the employee resigns in action.

The staff member would have to resign in reaction to the change within a sensible duration of time in order for the company’s actions to be thought about a termination of work for functions of the ESA.

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

Temporary layoff

A staff member is on temporary layoff when a company cuts back or stops the employee’s work without ending their work (for example, laying someone off at times when there is insufficient work to do). The simple reality that the employer does not define a recall date when laying the staff member off does not always mean that the lay-off is not momentary. Note, however, that a lay-off, even if intended to be short-term, might lead to positive dismissal if it is not permitted by the employment agreement.

For the functions of the termination arrangements of the ESA, a “week of layoff” is a week in which the employee 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 worker did not work for one or more days since the employee was not able or available to work, underwent disciplinary suspension, or was not offered with work due to the fact that of a strike or lockout at their location of employment or elsewhere.

Employers are not needed under the ESA to offer employees with a composed notice of a short-lived layoff, nor do they have to supply a reason for the lay-off. (They may, nevertheless, be required to do these things under a cumulative agreement or an employment agreement.)

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

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

– the employee receives extra unemployment advantages;
or

– the staff member would be entitled to get extra unemployment benefits however isn’t receiving them because they are used somewhere else;
or

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

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

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

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

Written notice of termination and termination pay

Under the ESA, a company can end the employment of an employee who has actually been employed continually for 3 months or more if either:

– the company has provided the employee appropriate composed notification of termination and the notice duration has actually ended

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

Written notice of termination

A staff member is entitled to see of termination (or termination pay rather of notification) if they have been continuously utilized for at least 3 months. An individual is considered “utilized” not just while they are actively working, however also throughout at any time in which they are not working however the employment relationship still exists (for example, time in which the worker is off sick or on leave or on lay-off).

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

– if a lay-off goes on longer than a short-term lay-off, the employee’s work is deemed (or thought about) to have actually been terminated on the very first day of the lay-off-any time after that does not count as part of the employee’s duration of employment, despite the fact that the staff member may still be used for employment purposes of the “continuously employed for 3 months” credentials

– if 2 separate durations of work are separated by more than 13 weeks, only the most recent duration counts for purposes of notice of termination

It is possible, in some scenarios, for a person to have been “constantly utilized” for 3 months or more and yet have a period of employment of less than 3 months. In such circumstances, the staff member would be entitled to observe due to the fact that a worker who has been continuously used for a minimum of 3 months is entitled to discover, and the minimum notification privilege of one week applies to a staff member with a period of work of any length less than one year.

The following chart specifies the quantity of notification needed:

Note: Special guidelines determine the quantity of notice required 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 notification duration

During the statutory notification duration, an employer should:

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

– continue to make whatever contributions would be required to keep the plans; and

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

Regular rate

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

Regular salaries

These are incomes other than overtime pay, holiday pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of task pay, employment termination pay and severance pay and particular legal privileges.

Regular work week

For a worker who normally works the very same number of hours every week, a routine work week is a week of that numerous 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 every week or they are paid on a basis besides time. For these employees, the “routine incomes” for a “regular work week” is the average quantity of the regular incomes made by the worker in the weeks in which the staff member worked during the duration of 12 weeks right away preceding the date the notification was provided.

A company is not permitted to arrange a worker’s holiday time throughout the statutory notice duration unless the employee-after receiving composed notification of termination of employment-agrees to take their vacation time throughout the notification duration.

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

How to provide written notification

In many cases, written notice of termination of employment should be dealt with to the worker. It can be provided in person or by mail, fax or email, as long as delivery can be verified.

There are unique rules for providing notification of termination if a worker has a contract of work or a collective arrangement that offers seniority rights that enable an employee who is to be laid off or whose employment is to be terminated to displace (” bump”) other staff members.

Because case, the employer must publish a notification in the work environment (where it will be seen by the workers) setting out the names, seniority and task category of those employees 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 staff member called in the notification. However, this notification of termination should still satisfy the length requirements set out in the ESA.

There are likewise special rules concerning how notification is provided when there is a mass termination.

Termination pay

A worker who does not get the written notice needed under the ESA should be offered termination pay in lieu of notification. Termination pay is a lump sum payment equivalent to the routine earnings for a regular work week that a worker would otherwise have been entitled to throughout the composed notice period. A worker makes vacation pay on their termination pay. Employers should also continue to make whatever contributions would be needed to maintain the advantages the employee would have been entitled to had they continued to be used through the notification period.

Example: Regular work week

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

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

Sarah’s regular salaries for a regular 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 holiday pay on her termination pay is calculated:

4% of $2,400.00 = $96.00

Finally, her vacation pay is contributed to her termination pay:

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The company needs to also guarantee ongoing coverage for any benefit or pension plans that applied to her for three weeks.

Example: No regular work week

Gerry has worked at an assisted living home for four years. He works each week, but his hours differ from week to week. His rate of pay is $25.00 an hour, and he is paid 6 per cent trip pay.

Gerry’s company removed his position and did not give Gerry any written notification of termination. Gerry was ill and off work for 2 of the 12 weeks immediately preceding the day his work was ended. Gerry made $1,800.00 in the 12 weeks before the day on which his employment ended.

Gerry is entitled to 4 weeks of termination pay.

Gerry’s typical profits weekly are determined:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for two weeks for that reason these weeks are not included in the computation of typical profits) = $180.00 a week

His termination pay is determined:

$ 180.00 × 4 weeks = $720.00

Then his holiday 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 employer should also guarantee continued coverage for any advantage or pension that used to him for four weeks.

When to pay termination pay

Termination pay need to be paid to a worker either seven days after the employee’s employment is ended or on the employee’s next routine pay date, whichever is later on.

Mass termination

Special guidelines for notice of termination may use in cases of mass termination (when an employer is terminating 50 or more employees at its establishment within a four-week period).

Meaning of “establishment”

An “establishment” is a location at which the employer carries on company. Separate areas can be considered one establishment if either:

– they are situated within the same municipality, or

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

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

This will need that workers who work specifically from another location be thought about for addition in the count when figuring out whether 50 or more staff members have been terminated.

Note that where an employee carries out work both from their home and from another place where the employer brings on company (for example, an office), their home is not included in the definition of “establishment”. Instead, the employee is thought about to have a connection to the workplace location and, therefore, for the purpose of mass termination, the worker is included with regard to that office location.

Example: where multiple places are thought about one “establishment”

ABC Company has an office and a warehouse situated in London, ON. Sabrina lives in London and works for ABC Company specifically from another location: she performs work for the business from home and employment does not operate at the office.

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

Employer commitments in a mass termination

When a mass termination takes place, the company should complete and provide the Form 1 (Notice of termination of work) to the Director of Employment Standards (Director) by:

– e-mail 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 shipment to the Director’s workplace, if the shipment can be validated.

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

Any notice to the affected employees is not considered to have been provided till the Form 1 is received by the Director; in other words, notice of mass termination is not efficient up until the Director gets the Form 1.

In addition to providing staff members with private notices of termination, the company must, on the very first day of the notice duration:

– publish a copy of the Form 1 provided to the Director in the work environment where it will concern the attention of the impacted staff members.

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

The quantity of notice employees should get in a mass termination is not based upon the staff members’ length of employment, but on the number of employees who have been ended. An employer must provide:

– 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 ended

Exception to the mass termination guidelines

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

– the number of employees whose employment is being terminated represents not more than 10 per cent of the staff members who have actually been employed for at least 3 months at the establishment

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

Mass termination: resignation by a worker

A staff member who has gotten termination notice under the mass termination rules who wants to resign before the termination date offered in the company’s notice should offer the company at least one week’s written notice of resignation if the worker has been utilized for less than two years. If the work duration has actually been two years or more, the worker must give a minimum of two weeks’ composed notification of resignation. However, the staff member does not need to notify of resignation if the employer constructively dismisses the staff member or breaches a term of the agreement.

Temporary work after termination date in notice

A company can provide work to an employee 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 notification without impacting the initial date of the termination and without being needed to provide any more notification of termination to the staff member when the temporary work ends.

If a staff member works beyond the 13-week duration after the termination date and then has their work ended, the employee will be entitled to a brand-new composed notice of termination as if the previous notice had never ever been provided. The employee’s period of employment will then also include the duration of momentary work.

Recall rights

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

An employee who has recall rights and who is entitled to termination pay because of a layoff of 35 weeks or more might select 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 receive termination pay (and discontinuance wage, if they were entitled to discontinuance wage).

If a staff member is entitled to both termination pay and discontinuance wage, they need to make the same option for both.

If a worker who is not represented by a trade union chooses to keep their recall rights or stops working to make an option, the employer should 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 an employee who is represented by a trade union elects to keep their recall rights or fails to decide, the company and the trade union must try to come to a plan to hold the termination pay (and severance pay, if any) in trust for the worker. If they can not concern an arrangement, and the trade union recommends the company and the Director of Employment Standards in composing that efforts have failed, the employer should send out the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If an employee chooses to give up their recall rights or if the recall rights end, the money that is kept in trust must be sent 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 employment termination pay

A lot of these exemptions are complicated. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you need more details. Please also refer to the special rule tool.

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

– is guilty of wilful misconduct, disobedience or wilful overlook of responsibility that is not minor and has actually not been excused by the company. Note: “wilful” includes when a worker meant the resulting effect or acted recklessly if they knew or should have understood the impacts their conduct would have. Poor work conduct that is unintentional or unintended is normally not considered wilful;

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

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

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

See also: Employment Standards Self-Service Tool

Wrongful dismissal

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

The guidelines under the ESA about termination and severance of work are minimum requirements. Some employees may have rights under the typical law that are greater than the rights to discover of termination (or termination pay) and discontinuance wage under the ESA. An employee might want to sue their previous employer in court for “wrongful dismissal”. Employees need to understand that they can not take legal action against an employer for wrongful termination and submit a claim for termination pay or severance pay with the ministry for the very same termination or severance of work. A staff member must choose one or the other. Employees may wish to obtain legal advice worrying their rights.