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Termination Of Employment

A number of expressions are commonly utilized to describe situations when work is terminated. These consist of « release, » « discharged, » « 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 utilizing a staff member, consisting of where an employee is no longer utilized due to the personal bankruptcy or insolvency of the company;

– « constructively » dismisses a worker and the worker resigns, in action, within an affordable time;

– lays a worker off for a period that is longer than a « momentary layoff ».

For the most part, when a company ends the work of an employee who has been continually utilized for three months, the employer must supply the worker with either composed notification of termination, termination pay or a mix (as long as the notification and the number of weeks of termination pay together equal the length of notification the employee is entitled to get).

The ESA does not require a company to offer a staff member a reason their work is being ended. There are, however, some scenarios where an employer can not end a staff member’s work even if the employer is prepared to offer appropriate written notice or termination pay. For example, an employer can not end someone’s employment, or punish them in any other way, if any part of the factor referall.us for the termination of work is based on the employee 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 optimums, or taking a leave of lack defined in the ESA. Please see the chapter on reprisals.

Qualifying for termination notification or pay in lieu

Certain employees are not entitled to see of termination or termination pay under the ESA. Examples consist of: staff members who are guilty of wilful misconduct, disobedience, or wilful disregard of responsibility that is not trivial and has not been excused by the employer. Other examples consist of construction workers, workers on temporary layoff, employees who refuse a deal of affordable alternative work and workers who have actually been employed less than three months.

There are a variety of other exemptions to the termination of employment provisions of the ESA. See « Exemptions to see of termination or termination pay. » Please also describe the special guideline tool.

The termination-of-employment rules are entirely separate from any entitlements an employee may need to be paid discontinuance wage under the ESA.

Constructive dismissal

A useful dismissal might take place when an employer makes a substantial change to an essential term or condition of a staff member’s work without the worker’s real or implied approval.

For instance, an employee may be constructively dismissed if the employer makes changes to the staff member’s terms of employment that result in a significant decrease in salary or a significant negative modification in such things as the staff member’s work location, hours of work, authority, or position. Constructive termination may likewise consist of circumstances where a company bothers or abuses a worker, or a company provides a staff member a demand to « stop or be fired » and the employee resigns in action.

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

Constructive termination is a complex and tough subject. For more details on constructive termination, please get in touch with the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

An employee is on short-lived layoff when a company cuts back or stops the worker’s work without ending their employment (for example, laying somebody off at times when there is insufficient work to do). The simple truth that the employer does not define a recall date when laying the worker off does not always imply that the lay-off is not momentary. Note, nevertheless, that a lay-off, even if meant to be short-lived, might lead to positive dismissal if it is not allowed by the employment agreement.

For the functions of the termination provisions of the ESA, a « week of layoff » is a week in which the worker earned less than half of what they would normally make (or makes typically) 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 worker was not able or readily available to work, went through disciplinary suspension, or was not offered with work since of a strike or lockout at their place of employment or elsewhere.

Employers are not needed under the ESA to supply workers with a composed notification of a momentary layoff, nor do they need to provide a reason for the lay-off. (They may, nevertheless, be needed to do these things under a collective arrangement or an employment agreement.)

Under the ESA, a « short-term 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 successive weeks, however less than 35 weeks of layoff in any period of 52 successive weeks, where:- the worker continues to get significant payments from the employer;
or

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

– the worker gets supplemental welfare;
or

– the employee would be entitled to receive supplementary welfare however isn’t getting them because they are employed somewhere else;
or

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

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

3. a layoff longer than a layoff described in ‘B’ where the employer remembers a staff member who is represented by a trade union within the time set out in a contract in between the union and the employer.

If an employee is laid off for a period longer than a short-term layoff as set out above, the employer is thought about to have actually ended the staff member’s employment. Generally, the worker 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 employer has actually given the staff member proper composed notice of termination and the notification duration has ended

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

Written notice of termination

An employee is entitled to notice of termination (or termination pay rather of notification) if they have been continuously employed for at least three months. A person is thought about « employed » not only while they are actively working, but likewise during whenever in which they are not working however the employment relationship still exists (for example, time in which the staff member is off ill or on leave or on lay-off).

The amount of notice to which a staff member is entitled depends upon their « period of employment ». An employee’s duration of work consists of not just all time while the worker is actively working however likewise at any time that they are not working but the work relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a momentary lay-off, the employee’s work 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 duration of employment, although the employee might still be employed for functions of the « continuously utilized for three months » certification

– if 2 separate periods of work are separated by more than 13 weeks, just the most recent period counts for purposes of notification of termination

It is possible, in some scenarios, for an individual to have been « constantly employed » for 3 months or more and yet have a period of employment of less than three months. In such circumstances, the employee would be entitled to observe since an employee who has been continually utilized for a minimum of 3 months is entitled to observe, and the minimum notice entitlement of one week uses to an employee with a period of employment of any length less than one year.

The following chart specifies the amount of notice required:

Note: Special rules identify the amount of notice required when it comes to mass terminations – where the employment of 50 or more staff members is terminated at a company’s establishment within a four-week period.

Requirements during the statutory notification period

During the statutory notice duration, a company should:

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

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

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

Regular rate

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

Regular wages

These are incomes other than overtime pay, holiday pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and discontinuance wage and specific contractual entitlements.

Regular work week

For a staff member who usually works the same number of hours every 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 same number of hours weekly or they are paid on a basis aside from time. For these employees, the « regular incomes » for a « regular work week » is the typical amount of the routine salaries earned by the staff member in the weeks in which the staff member worked throughout the period of 12 weeks instantly preceding the date the notification was provided.

An employer is not enabled to schedule an employee’s holiday time during the statutory notice period unless the employee-after getting written notice of termination of employment-agrees to take their vacation time throughout the notice period.

If an employer provides longer notification 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 offer written notice

In many cases, written notification of termination of work need to be resolved to the staff member. 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 notification of termination if an employee has an agreement of employment or a cumulative arrangement that supplies seniority rights that permit a worker who is to be laid off or whose work is to be ended to displace ( » bump ») other staff members.

In that case, the company needs to publish a notice in the workplace (where it will be seen by the staff members) setting out the names, seniority and job category of those staff members the company plans to terminate and the date of the proposed termination. The publishing of the notice is considered to be notification of termination, since the date of the posting, to an employee who is « bumped » by a worker named in the notification. However, this notice of termination must still satisfy the length requirements set out in the ESA.

There are also special guidelines relating to how notification is supplied when there is a mass termination.

Termination pay

A staff member who does not receive the written notice needed under the ESA needs to be given termination pay in lieu of notification. Termination pay is a lump amount payment equivalent to the regular salaries for a routine work week that an employee would otherwise have been entitled to during the written notice period. An employee earns holiday pay on their termination pay. Employers need to also continue to make whatever contributions would be required to keep the benefits the staff member would have been entitled to had they continued to be used through the notification period.

Example: Regular work week

Sarah has worked for 3 and a half years. Now her task has been removed and her work 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 received 4 percent vacation pay. Because she worked for more than three 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 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 holiday pay on her termination pay is determined:

4% of $2,400.00 = $96.00

Finally, her holiday pay is included to her termination pay:

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The company must also make sure ongoing coverage for any benefit or pension strategies that used to her for three weeks.

Example: No routine work week

Gerry has worked at an 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 percent trip pay.

Gerry’s employer eliminated his position and did not offer Gerry any composed 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 work ended.

Gerry is entitled to 4 weeks of termination pay.

Gerry’s average earnings 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 estimation of average profits) = $180.00 a week

His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00

Then his holiday pay on his termination pay is calculated:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer needs to also make sure continued coverage for any benefit or pension that applied to him for 4 weeks.

When to pay termination pay

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

Mass termination

Special guidelines for notification of termination may apply in cases of mass termination (when an employer is terminating 50 or more staff members at its facility within a four-week duration).

Meaning of « facility »

An « establishment » is an area at which the employer continues organization. Separate places can be thought about one establishment if either:

– they lie within the exact same town, or

– an employee at one area has contractual seniority rights that reach the other location, enabling the staff member 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, but just if the worker works from home and does not operate at any other place where the employer carries on business.

This will require that workers who work specifically from another location be considered for addition in the count when figuring out whether 50 or more employees have actually been ended.

Note that where a worker carries out work both from their home and from another location where the company carries on organization (for instance, a workplace), their home is not included in the meaning of « facility ». Instead, the worker is considered to have a connection to the office area and, for that reason, for the function of mass termination, the employee is included with respect to that office place.

Example: where multiple places are considered one « facility »

ABC Company has a workplace and a warehouse located 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 operate at the office.

For the function of mass termination, the company’s London workplace, London storage facility and Sabrina’s London home are thought about one « establishment. »

Employer commitments in a mass termination

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

– e-mail to esa_form1_notice@ontario.ca.

– fax to (416) 326-7061.

– 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 delivery can be verified.

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

Any notification to the affected staff members is not thought about to have been given up until the Form 1 is received by the Director; in other words, notification of mass termination is not effective up until the Director receives the Form 1.

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

– post a copy of the Form 1 provided to the Director in the workplace where it will concern the attention of the affected staff members.

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

The quantity of notice workers need to receive in a mass termination is not based upon the employees’ length of work, but on the variety of staff members who have been terminated. A company must offer:

– 8 weeks discover if the work of 50 to 199 staff members is to be ended

– 12 weeks discover if the employment of 200 to 499 employees 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 apply if these 2 things apply:

– the variety of workers whose employment is being ended represents not more than 10 per cent of the employees who have been employed for at least three months at the facility

– none of the terminations are brought on by the permanent discontinuance of all or part of the company’s service at the establishment

Mass termination: resignation by a worker

An employee who has actually gotten termination notice under the mass termination guidelines who wishes to resign before the termination date offered in the company’s notice should give the company a minimum of one week’s written notification of resignation if the staff member has been employed for less than 2 years. If the employment duration has actually been 2 years or more, the employee needs to offer a minimum of two weeks’ written notice of resignation. However, the worker does not have to give notification of resignation if the employer constructively dismisses the staff member or breaches a regard to the agreement.

Temporary work after termination date in notice

A company can provide work to an employee who has been notified of termination on a temporary 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 offer any further notification of termination to the employee when the temporary work ends.

If a worker works beyond the 13-week period after the termination date and after that has their employment ended, the worker will be entitled to a brand-new written notification of termination as if the previous notification had actually never been provided. The worker’s duration of work 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 recalled to work by their employer under a term or condition of work. This right is frequently discovered in cumulative contracts.

An employee who has recall rights and who is entitled to termination pay because of a layoff of 35 weeks or more might pick 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

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

If an employee is entitled to both termination pay and discontinuance wage, they need to make the very same option for both.

If a staff member who is not represented by a trade union chooses to keep their recall rights or stops working to decide, the employer must send out the quantity of the termination pay (and severance pay, 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 stops working to make an option, the employer and the trade union must attempt to come to an arrangement to hold the termination pay (and severance pay, if any) in trust for the employee. If they can not pertain to an arrangement, and the trade union recommends the company and the Director of Employment Standards in composing that efforts have stopped working, the company 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 offer up their recall rights or if the recall rights end, the cash that is held in trust needs to be sent to the worker.

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

Exemptions to discover of termination or termination pay

Much of these exemptions are complicated. Please call the Employment Standards Information Centre, 1-800-531-5551, if you require more info. Please also refer to the unique guideline tool.

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

– is guilty of wilful misbehavior, disobedience or wilful neglect of responsibility that is not unimportant and has actually not been excused by the company. Note: « wilful » consists of when a worker intended the resulting repercussion or acted recklessly if they knew or must have known the effects their conduct would have. Poor work conduct that is unintentional or unintended is usually not considered wilful;

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

– the term ends or the job is not completed more than 12 months after the work started; or

– the work continues for three months or more after the term expires or the task is finished;

See likewise: Employment Standards Self-Service Tool

Wrongful termination

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

The guidelines 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 see of termination (or termination pay) and severance pay under the ESA. A worker may wish to sue their previous company in court for « wrongful termination ». Employees should be aware that they can not sue an employer for wrongful termination and sue for termination pay or severance pay with the ministry for the exact same termination or severance of employment. A worker should pick one or the other. Employees may want to get legal guidance worrying their rights.