Termination Of Employment

A number of expressions are commonly used to explain circumstances when employment is ended. These include “let go,” “released,” “dismissed,” “fired” and “permanently laid off.”

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

– dismisses or stops using a worker, including where an employee is no longer employed due to the personal bankruptcy or insolvency of the employer;

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

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

Most of the times, when a company ends the work of a worker who has actually been continuously employed for three months, the employer must offer the staff member with either composed notification of termination, termination pay or a mix (as long as the notice and the variety of weeks of termination pay together equivalent the length of notification the staff member is entitled to get).

The ESA does not need a company to provide a worker a reason their work is being terminated. There are, however, some circumstances where a company can not end a worker’s work even if the employer is prepared to provide correct composed notification or termination pay. For example, a company can not end somebody’s employment, 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 working out 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.

Qualifying for termination notice or pay in lieu

Certain staff members are not entitled to see of termination or termination pay under the ESA. Examples consist of: employees who are guilty of wilful misbehavior, disobedience, or wilful neglect of task that is not insignificant and has not been excused by the employer. Other examples include construction workers, workers on temporary layoff, employees who refuse a deal of reasonable alternative work and staff members who have actually been used less than 3 months.

There are a variety of other exemptions to the termination of work arrangements of the ESA. See “Exemptions to see of termination or termination pay.” Please likewise describe the special guideline tool.

The termination-of-employment rules are completely different from any entitlements a staff member might have to be paid severance pay under the ESA.

Constructive dismissal

A constructive dismissal may occur when a company makes a significant modification to a basic term or condition of a worker’s work without the employee’s actual or implied authorization.

For example, an employee may be constructively dismissed if the employer makes modifications to the staff member’s terms and conditions of employment that result in a significant reduction in salary or a considerable negative modification in such things as the worker’s work area, hours of work, authority, or position. Constructive termination might likewise include circumstances where an employer bugs or abuses a staff member, or a company gives a worker a warning to “quit or be fired” and the employee resigns in action.

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

Constructive dismissal is a complex and hard topic. For additional information on positive termination, please call the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A staff member is on short-term layoff when a company cuts back or stops the staff member’s work without ending their employment (for example, laying someone off sometimes when there is inadequate work to do). The simple fact that the company does not define a recall date when laying the worker off does not necessarily suggest that the lay-off is not short-term. Note, nevertheless, that a lay-off, even if planned to be momentary, may result in constructive 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 staff member earned less than half of what they would generally make (or earns usually) in a week.

A week of layoff does not consist of any week in which the worker did not work for several days because the employee was not able or available to work, was subject to disciplinary suspension, or was not provided with work because of a strike or lockout at their place of work or somewhere else.

Employers are not required under the ESA to offer workers with a composed notification of a temporary layoff, nor do they have to offer a factor for the lay-off. (They may, nevertheless, be needed to do these things under a collective arrangement or a work agreement.)

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

1. not more than 13 weeks of layoff in any period of 20 successive weeks;
or

2. more than 13 weeks in any duration of 20 consecutive weeks, but less than 35 weeks of layoff in any period of 52 consecutive weeks, where:- the worker continues to receive significant payments from the employer;
or

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

– the employee receives supplementary welfare;
or

– the worker would be entitled to receive extra welfare but isn’t receiving them because they are utilized elsewhere;
or

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

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

3. a layoff longer than a layoff explained 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 company.

If an employee is laid off for a duration longer than a temporary layoff as set out above, the company is considered to have actually 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 end the employment of a staff member who has been used continuously for three months or more if either:

– the employer has actually offered the staff member appropriate written notification of termination and the notification duration has actually expired

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

Written notification of termination

A worker is entitled to notice of termination (or employment termination pay instead of notification) if they have been continually utilized for at least three months. An individual is thought about “used” not only while they are actively working, but also during whenever in which they are not working but the employment relationship still exists (for instance, time in which the worker is off sick or on leave or on lay-off).

The quantity of notification to which a staff member is entitled depends on their “period of employment”. A worker’s duration of employment consists of not just perpetuity while the staff member is actively working however likewise at 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-lived lay-off, the worker’s work is deemed (or thought about) to have 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, although the worker may still be used for purposes of the “continually used for 3 months” certification

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

It is possible, in some circumstances, for a person to have been “constantly utilized” for 3 months or more and yet have a duration of work of less than 3 months. In such scenarios, the employee would be entitled to discover since a worker who has been continually utilized for a minimum of three months is entitled to discover, and the minimum notification privilege of one week applies to a worker with a duration of employment of any length less than one year.

The following chart specifies the quantity of notification required:

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

Requirements throughout the statutory notice period

During the statutory notice period, a company needs to:

– not reduce the staff member’s wage rate or alter any other term or condition of employment;

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

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

These are salaries aside from overtime pay, vacation pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of task pay, termination pay and discontinuance wage and specific legal entitlements.

Regular work week

For a worker who typically works the very same number of hours every week, a routine work week is a week of that lots of hours, not including overtime hours.

Some employees do not have a regular work week. That is, they do not work the same number of hours each week or they are paid on a basis other than time. For these workers, the “regular salaries” for a “regular work week” is the average amount of the regular incomes earned by the employee in the weeks in which the worker worked throughout the duration of 12 weeks instantly preceding the date the notice was given.

An employer is not permitted to schedule a staff member’s holiday time throughout the statutory notice duration unless the employee-after receiving composed notification of termination of employment-agrees to take their trip time throughout the notice period.

If an employer provides longer notification than is required, the statutory part of the notice duration is the tail end of the duration that ends on the date of termination.

How to offer written notice

For the most part, written notice of termination of employment must be resolved to the worker. It can be offered personally or by mail, fax or e-mail, as long as delivery can be verified.

There are special rules for supplying notice of termination if a worker has a contract of work or a cumulative arrangement that supplies seniority rights that allow 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 needs to publish a notice in the work environment (where it will be seen by the workers) setting out the names, seniority and job classification of those staff members the company plans to end and the date of the proposed termination. The publishing of the notification is thought about to be notice of termination, since the date of the publishing, to a staff member who is “bumped” by an employee called in the notice. However, this notification of termination must still meet the length requirements set out in the ESA.

There are likewise unique guidelines relating to how notification is provided when there is a mass termination.

Termination pay

An employee who does not get the composed notification needed under the ESA must be offered termination pay in lieu of notification. Termination pay is a lump sum payment equal to the regular incomes for a regular work week that an employee would otherwise have actually been entitled to during the written notification duration. A staff member makes vacation pay on their termination pay. Employers should also continue to make whatever contributions would be required to keep the benefits the employee would have been entitled to had they continued to be used through the notice period.

Example: Regular work week

Sarah has actually worked for three and a half years. Now her job has actually been eliminated and her employment has actually been terminated. Sarah was not provided any written notification of termination.

Sarah worked 40 hours a week each week and was paid $20.00 an hour. She likewise got four percent getaway pay. Because she worked for more than three years but less than four years, she is entitled to 3 weeks’ pay in lieu of notice.

Sarah’s regular incomes for a routine work week are computed:

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

Her termination pay is computed:

$ 800.00 X 3 weeks = $2,400.00

Then her holiday 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 company should also guarantee continued protection for any benefit or pension plans that applied to her for three weeks.

Example: No regular work week

Gerry has worked at a nursing home for 4 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 per cent getaway pay.

Gerry’s company eliminated his position and did not provide Gerry any written notice of termination. Gerry was ill and off work for 2 of the 12 weeks right away preceding the day his work was terminated. 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 average earnings each week are determined:

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

His termination pay is determined:

$ 180.00 × 4 weeks = $720.00

Then his getaway pay on his termination pay is determined:

6% of $720.00 = $43.20

Finally, his vacation pay is added to his termination pay:

$ 720.00 + $43.20 = $763.20

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

When to pay termination pay

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

Mass termination

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

Meaning of “establishment”

An “facility” is an area at which the employer continues company. Separate places can be considered one facility if either:

– they lie within the exact same municipality, or

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

Effective October 26, 2023, in cases of mass termination, the term “establishment” includes a worker’s home, however just if the staff member works from home and does not operate at any other place where the employer carries on organization.

This will require that staff members who work be thought about for addition in the count when determining whether 50 or more staff members have actually been ended.

Note that where a staff member carries out work both from their home and from another location where the employer carries on service (for instance, an office), their home is not consisted of in the meaning of “facility”. Instead, the staff member is thought about to have a connection to the workplace place and, for that reason, for the function of mass termination, the staff member is consisted of with regard to that workplace area.

Example: where multiple places are considered one “facility”

ABC Company has an office and a storage facility situated in London, ON. Sabrina resides in London and works for ABC Company specifically from another location: she carries out work for the business from home and does not work at the workplace.

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 happens, the company needs to finish and provide the Form 1 (Notice of termination of employment) to the Director of Employment Standards (Director) by:

– email to esa_form1_notice@ontario.ca.

– fax to (416) 326-7061.

– personal delivery to the Director’s workplace on a day and at a time when it is open.

– mail delivery to the Director’s office, if the shipment can be verified.

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 given until the Form 1 is gotten by the Director; simply put, notification of mass termination is ineffective till the Director gets the Form 1.

In addition to providing staff members with private notifications of termination, the employer must, on the first day of the notice period:

– post a copy of the Form 1 provided to the Director in the work environment where it will concern the attention of the affected employees.

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

The quantity of notification workers need to get in a mass termination is not based on the workers’ length of work, however on the variety of workers who have actually been ended. An employer needs to give:

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

– 12 weeks notice if the employment of 200 to 499 staff members is to be ended

– 16 weeks discover if the work of 500 or more employees is to be ended

Exception to the mass termination rules

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

– the variety of workers whose employment is being terminated represents not more than 10 percent of the employees who have actually been employed for a minimum of 3 months at the establishment

– none of the terminations are brought on by the long-term discontinuance of all or part of the company’s company at the facility

Mass termination: resignation by an employee

A worker who has actually gotten termination notification under the mass termination guidelines who desires to resign before the termination date supplied in the company’s notification need to offer the employer a minimum of one week’s written notification of resignation if the employee has actually been utilized for less than 2 years. If the work duration has been 2 years or more, the employee must offer at least 2 weeks’ composed notification of resignation. However, the worker does not need to offer notice of resignation if the employer constructively dismisses the staff member or breaches a term of the contract.

Temporary work after termination date in notification

A company can provide work to a staff member who has actually been provided notice of termination on a temporary basis in the 13-week period after the termination date set out in the notification without affecting the initial date of the termination and without being needed to supply any more notification of termination to the employee when the temporary work ends.

If a staff member works beyond the 13-week duration after the termination date and after that has their work ended, the employee will be entitled to a brand-new composed notice of termination as if the previous notification had never ever been offered. The employee’s period of work will then also consist of the period of momentary 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 work. This right is typically discovered 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 may select to:

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

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

If a worker is entitled to both termination pay and discontinuance wage, they must make the exact same option for both.

If a worker who is not represented by a trade union elects to keep their recall rights or fails to decide, the company should send out the quantity of the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If a staff member who is represented by a trade union chooses to keep their recall rights or fails to make a choice, the company and the trade union need to attempt to come to an arrangement to hold the termination pay (and severance pay, if any) in trust for the staff member. If they can not concern a plan, and the trade union recommends the employer and the Director of Employment Standards in composing that efforts have failed, the employer must 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 picks to provide up their recall rights or if the recall rights expire, the money that is held in trust needs to be sent out to the worker.

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

Exemptions to see of termination or termination pay

Much of these exemptions are intricate. Please contact the Employment Standards Information Centre, 1-800-531-5551, if you require more details. Please likewise describe the special guideline tool.

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

– is guilty of wilful misbehavior, disobedience or wilful overlook of duty that is not minor and has actually not been excused by the employer. Note: “wilful” includes when a worker meant the resulting consequence or acted recklessly if they understood or employment should have known the impacts their conduct would have. Poor work conduct that is unintentional or unintended is typically ruled out wilful;

– was employed for employment a specific length of time or up until the conclusion of a particular task. However, such a staff member will be entitled to discover of termination or termination pay if:- the work ends before the term expires or the job is completed; or

– the term ends 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 task is completed;

See also: 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 employees might have rights under the common law that are greater than the rights to discover of termination (or termination pay) and discontinuance wage under the ESA. A staff member may wish to sue their former company in court for “wrongful termination”. Employees must understand that they can not sue an employer for wrongful termination and submit a claim for termination pay or discontinuance wage with the ministry for the exact same termination or severance of work. An employee should select one or the other. Employees may want to obtain legal suggestions worrying their rights.