Termination Of Employment

A variety of expressions are typically utilized to explain scenarios when employment is ended. These include “release,” “discharged,” “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 a staff member is no longer employed due to the personal bankruptcy or insolvency of the employer;

– “constructively” dismisses a worker and the worker resigns, in action, within a sensible time;

– lays a worker off for a period that is longer than a “short-lived layoff”.

For the most part, when a company ends the work of a staff member who has actually been continually employed for three months, the employer should offer the worker with either composed 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 notification the worker is entitled to receive).

The ESA does not require an employer to provide a worker a reason their work is being terminated. There are, nevertheless, some circumstances where an employer can not terminate a worker’s work even if the company is prepared to give correct composed notice or termination pay. For instance, a company can not end someone’s employment, or punish them in any other method, if any part of the reason for the termination of employment is based on the staff member asking questions 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 maximums, or taking a leave of lack defined in the ESA. Please see the chapter on reprisals.

Getting approved for job termination notification or pay in lieu

Certain workers 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 neglect of task that is not minor and has not been condoned by the employer. Other examples consist of construction staff members, employees on short-lived layoff, workers who a deal of reasonable alternative employment and workers who have actually been employed less than 3 months.

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

The termination-of-employment guidelines are entirely different from any entitlements a staff member might need to be paid discontinuance wage under the ESA.

Constructive dismissal

A positive dismissal might happen when a company makes a considerable modification to an essential term or condition of a worker’s work without the employee’s actual or implied consent.

For instance, a worker may be constructively dismissed if the company makes modifications to the staff member’s terms of employment that lead to a significant reduction in wage or a significant negative change in such things as the employee’s work location, hours of work, authority, or position. Constructive termination may also include scenarios where an employer harasses or abuses a worker, or a company provides a staff member an ultimatum to “quit or be fired” and the worker resigns in action.

The employee would need to resign in reaction to the change within a sensible period of time in order for the company’s actions to be thought about a termination of employment for purposes of the ESA.

Constructive dismissal is a complex and hard topic. For more details on useful dismissal, please contact 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 work (for example, laying someone off at times when there is not enough work to do). The mere reality that the company does not define a recall date when laying the staff member off does not always mean that the lay-off is not short-term. Note, nevertheless, job that a lay-off, even if planned to be short-term, may result in positive dismissal if it is not enabled by the employment agreement.

For the purposes of the termination arrangements of the ESA, a “week of layoff” is a week in which the staff member earned less than half of what they would generally earn (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 staff member was unable or available to work, underwent disciplinary suspension, or was not provided with work since of a strike or lockout at their place of employment or elsewhere.

Employers are not required under the ESA to provide workers with a composed notice of a momentary layoff, nor do they have to offer a reason for the lay-off. (They may, however, be required to do these things under a cumulative arrangement or a work contract.)

Under the ESA, a “temporary 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 duration of 20 successive weeks, but less than 35 weeks of layoff in any period of 52 consecutive weeks, where:- the employee continues to receive significant payments from the employer;
or

– the employer continues to pay for the benefit of the worker under a genuine group or employee insurance coverage plan (such as a medical or drug insurance coverage plan) or a genuine retirement or pension plan;
or

– the employee receives extra welfare;
or

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

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

– the company remembers the worker 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 company recalls an employee who is represented by a trade union within the time set out in an arrangement between the union and the company.

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

Written notice of termination and termination pay

Under the ESA, an employer can terminate the work of an employee who has actually been utilized continuously for 3 months or more if either:

– the company has actually offered the staff member correct written notification of termination and the notice period has actually expired

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

Written notice of termination

A staff member is entitled to notice of termination (or termination pay instead of notice) if they have been constantly employed for at least three months. An individual is thought about “employed” not only while they are actively working, but also during any time in which they are not working but the employment relationship still exists (for example, time in which the staff member is off ill or on leave or on lay-off).

The quantity of notice to which an employee is entitled depends upon their “duration of employment”. An employee’s period of work includes not only perpetuity while the employee is actively working but also whenever that they are not working but the employment relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a temporary lay-off, the staff member’s employment is deemed (or considered) to have been ended on the very first day of the lay-off-any time after that does not count as part of the worker’s period of employment, even though the worker may still be employed for purposes of the “constantly utilized for three months” credentials

– if two separate durations of employment are separated by more than 13 weeks, only the most recent duration counts for functions of notice of termination

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

The following chart specifies the quantity of notification needed:

Note: Special guidelines determine the amount of notification needed when it comes to mass terminations – where the work of 50 or more staff members is ended at a company’s establishment within a four-week period.

Requirements during the statutory notification duration

During the statutory notification duration, an employer 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 keep the worker’s advantages plans; and

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

Regular rate

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

Regular salaries

These are incomes aside from overtime pay, holiday pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and severance pay and certain legal privileges.

Regular work week

For a worker who usually works the very same variety of hours weekly, a regular work week is a week of that numerous hours, not consisting of overtime hours.

Some employees do not have a regular work week. That is, they do not work the very same variety of hours every week or they are paid on a basis other than time. For these employees, the “routine wages” for a “routine work week” is the average quantity of the regular salaries earned by the employee in the weeks in which the staff member worked during the period of 12 weeks immediately preceding the date the notice was offered.

A company is not enabled to set up a staff member’s holiday time during the statutory notice period unless the employee-after receiving written notice of termination of employment-agrees to take their vacation time during the notice period.

If an employer supplies longer notice than is needed, the statutory part of the notification period is the tail end of the period that ends on the date of termination.

How to supply written notification

Most of the times, composed notification of termination of work should be dealt with to the employee. It can be provided face to face or by mail, fax or e-mail, as long as delivery can be validated.

There are unique guidelines for offering notice of termination if a staff member has a contract of employment or a cumulative contract that provides seniority rights that allow an employee who is to be laid off or whose employment is to be terminated to displace (” bump”) other employees.

Because case, the employer needs to 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 means to terminate and the date of the proposed termination. The publishing of the notification is considered to be notice of termination, since the date of the posting, to an employee who is “bumped” by a worker named in the notice. However, this notice of termination need to still meet the length requirements set out in the ESA.

There are also unique rules regarding how notification is provided when there is a mass termination.

Termination pay

An employee who does not get the composed notification required under the ESA needs to be given termination pay in lieu of notification. Termination pay is a lump amount payment equal to the regular wages for a regular work week that an employee would otherwise have actually been entitled to during the composed notification period. A staff member makes getaway pay on their termination pay. Employers need to likewise continue to make whatever contributions would be required to keep the advantages the worker would have been entitled to had they continued to be used through the notification period.

Example: Regular work week

Sarah has actually worked for 3 and a half years. Now her job has actually been removed and her employment has been ended. Sarah was not given any composed notice of termination.

Sarah worked 40 hours a week each week and was paid $20.00 an hour. She also received 4 per cent getaway 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 incomes for a regular 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 company must also guarantee continued protection for any advantage or pension that applied to her for 3 weeks.

Example: No routine work week

Gerry has worked at a nursing 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 holiday pay.

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

Gerry is entitled to four weeks of termination pay.

Gerry’s average revenues weekly 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 typical earnings) = $180.00 a week

His termination pay is computed:

$ 180.00 × 4 weeks = $720.00

Then his getaway 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 employer must also ensure ongoing protection for any benefit or pension that used to him for 4 weeks.

When to pay termination pay

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

Mass termination

Special guidelines for notice of termination may apply in cases of mass termination (when a company is terminating 50 or more staff members at its establishment within a four-week period).

Meaning of “establishment”

An “establishment” is an area at which the company continues organization. Separate places can be thought about one establishment if either:

– they are situated within the exact same town, or

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

Effective October 26, 2023, in cases of mass termination, the term “facility” includes a worker’s home, but just if the staff member works from home and does not operate at any other location where the company continues business.

This will need that employees who work specifically remotely be considered for inclusion in the count when identifying whether 50 or more employees have actually been ended.

Note that where a worker carries out work both from their home and from another place where the company carries on service (for example, job a workplace), their home is not consisted of in the meaning of “establishment”. Instead, the worker is thought about to have a connection to the workplace location and, therefore, for the function of mass termination, the staff member is included with respect to that office place.

Example: where numerous locations are considered one “establishment”

ABC Company has a workplace and a storage facility situated in London, ON. Sabrina resides in London and works for ABC Company exclusively from another location: she performs work for the company from home and does not work at the workplace.

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

Employer responsibilities in a mass termination

When a mass termination occurs, the company needs to finish and deliver the Form 1 (Notice of termination of employment) to the Director of Employment Standards (Director) by:

– e-mail to es**************@on*****.ca.

– fax to (416) 326-7061.

– individual shipment to the Director’s office on a day and at a time when it is open.

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

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

Any notification to the affected employees is not considered to have been offered until the Form 1 is gotten by the Director; to put it simply, notification of mass termination is not efficient until the Director receives the Form 1.

In addition to supplying workers with specific notifications of termination, the company must, on the very first day of the notification period:

– post a copy of the Form 1 supplied to the Director in the workplace where it will come to the attention of the impacted staff members.

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

The quantity of notification staff members should get in a mass termination is not based upon the employees’ length of employment, however on the variety of staff members who have actually been terminated. An employer must offer:

– 8 weeks observe if the employment of 50 to 199 workers is to be terminated

– 12 weeks see if the work of 200 to 499 staff members is to be terminated

– 16 weeks notice if the employment of 500 or more workers is to be ended

Exception to the mass termination rules

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

– the number of staff members whose work is being ended represents not more than 10 per cent of the employees who have actually been used for a minimum of three months at the facility

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

Mass termination: resignation by an employee

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

Temporary work after termination date in notification

An employer can provide work to a staff member who has been notified of termination on a temporary basis in the 13-week duration after the termination date set out in the notice without impacting the initial date of the termination and without being needed to provide any additional notice of termination to the worker when the short-term work ends.

If an employee works beyond the 13-week duration after the termination date and then has their work ended, the staff member will be entitled to a new written notification of termination as if the previous notification had never ever been offered. The staff member’s period of work will then likewise include the duration of short-term work.

Recall rights

A “recall right” is the right of a worker on a layoff to be called back to work by their company under a term or condition of employment. This right is frequently found in cumulative agreements.

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

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

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

If an employee is entitled to both termination pay and severance pay, they must make the same option for both.

If an employee who is not represented by a trade union elects 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 a staff member who is represented by a trade union elects to keep their recall rights or fails to decide, the company and the trade union must attempt to come to a plan to hold the termination pay (and discontinuance wage, if any) in trust for the worker. If they can not pertain to an arrangement, and the trade union advises the employer and the Director of Employment Standards in composing that efforts have stopped working, the company needs to send out the termination pay (and severance pay, 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 cash that is kept in trust should be sent to the worker.

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

Exemptions to notice of termination or termination pay

Much of these exemptions are complex. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you require more details. Please likewise describe the special guideline 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 neglect of duty that is not trivial and has actually not been excused by the company. Note: “wilful” includes when a staff member meant the resulting effect or acted recklessly if they understood or should have understood the impacts their conduct would have. Poor work conduct that is unintentional or unintentional is usually ruled out wilful;

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

– the term expires or the job is not completed more than 12 months after the work began; or

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

See likewise: Employment Standards Self-Service Tool

Wrongful dismissal

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

The guidelines under the ESA about termination and severance of employment are minimum requirements. Some staff members might have rights under the typical law that are higher than the rights to observe of termination (or termination pay) and severance pay under the ESA. An employee may desire to sue their previous company in court for “wrongful termination”. Employees need to understand that they can not sue a company for wrongful dismissal and sue for termination pay or severance pay with the ministry for the exact same termination or severance of employment. A staff member needs to choose one or the other. Employees may wish to get legal guidance concerning their rights.