Termination Of Employment

A number of expressions are frequently utilized to explain circumstances when work is terminated. These consist of “release,” “discharged,” “dismissed,” “fired” and “permanently laid off.”

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

– dismisses or stops employing a staff member, including where a worker is no longer used due to the bankruptcy or insolvency of the employer;

– “constructively” dismisses a worker and the employee resigns, in response, within an affordable time;

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

In many cases, when a company ends the work of an employee who has been constantly employed for 3 months, the employer needs to provide the staff member 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 equivalent the length of notification the worker is entitled to get).

The ESA does not need an employer to give a staff member a factor why their work is being ended. There are, nevertheless, some scenarios where a company can not terminate a worker’s employment even if the company is prepared to give correct composed notification or termination pay. For example, a company can not end somebody’s work, or penalize them in any other way, if any part of the reason for the termination of work is based on the staff member asking questions about the ESA or working out a right under the ESA, such as declining to work in excess of the day-to-day or weekly hours of work maximums, or taking a leave of lack specified in the ESA. Please see the chapter on reprisals.

Qualifying for termination notice or pay in lieu

Certain employees are not entitled to observe of termination or termination pay under the ESA. Examples consist of: staff members who are guilty of wilful misbehavior, disobedience, or wilful disregard of duty that is not insignificant and has actually not been excused by the company. Other examples include building and construction workers, employees on short-term layoff, employees who decline an offer of affordable alternative work and workers who have actually been used less than three months.

There are a number of other exemptions to the termination of work provisions of the ESA. See “Exemptions to observe of termination or termination pay.” Please likewise describe the unique rule tool.

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

Constructive dismissal

A useful termination might occur when an employer makes a significant change to an essential term or condition of an employee’s work without the worker’s actual or implied authorization.

For example, an employee might be constructively dismissed if the employer makes modifications to the worker’s terms of employment that lead to a substantial reduction in income or a considerable negative change in such things as the employee’s work location, hours of work, authority, or position. Constructive dismissal may also consist of scenarios where an employer harasses or abuses a staff member, or an employer offers a worker a demand to “give up or be fired” and the worker resigns in action.

The worker would have to resign in reaction to the modification within a reasonable period of time in order for the employer’s actions to be considered a termination of employment for functions of the ESA.

Constructive dismissal is a complex and hard subject. For additional information on useful dismissal, please get in touch with the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A staff member is on short-term layoff when an employer cuts down or stops the employee’s work without ending their employment (for instance, laying somebody off at times when there is inadequate work to do). The simple truth that the employer does not define a recall date when laying the staff member off does not necessarily indicate that the lay-off is not momentary. Note, nevertheless, that a lay-off, even if meant to be momentary, job might result in useful 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 worker made less than half of what they would generally earn (or earns typically) in a week.

A week of layoff does not include any week in which the staff member did not work for one or more days due to the fact that the staff member was unable or offered to work, was subject to disciplinary suspension, or was not supplied with work due to the fact that of a strike or lockout at their location of employment or in other places.

Employers are not required under the ESA to provide employees with a written notification of a temporary layoff, nor job do they need to supply a factor for the lay-off. (They may, nevertheless, be required to do these things under a cumulative agreement or a work .)

Under the ESA, a “short-term 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 period of 52 successive weeks, where:- the employee continues to receive significant payments from the employer;
or

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

– the staff member receives extra joblessness benefits;
or

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

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

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

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 notification of termination and termination pay

Under the ESA, a company can terminate the work of a staff member who has actually been utilized continuously for three months or more if either:

– the employer has actually provided the worker proper composed notification of termination and the notice period has actually ended

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

Written notice of termination

A staff member is entitled to notice of termination (or termination pay rather of notification) if they have actually been continually used for at least 3 months. A person is considered “utilized” not only while they are actively working, but also during whenever in which they are not working however the work relationship still exists (for instance, time in which the employee is off ill or on leave or on lay-off).

The amount of notice to which an employee is entitled depends upon their “duration of work”. An employee’s duration of work includes not just all time while the staff member is actively working however 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 employee’s employment is deemed (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 worker’s duration of employment, although the employee may still be utilized for purposes of the “continually employed for 3 months” qualification

– if two different periods of employment are separated by more than 13 weeks, only the most current period counts for functions of notice of termination

It is possible, in some circumstances, for an individual to have actually been “continually employed” for three months or more and yet have a duration of work of less than three months. In such scenarios, the employee would be entitled to notice since an employee who has been continuously employed for a minimum of three months is entitled to discover, and the minimum notice entitlement of one week applies to a worker with a period of work of any length less than one year.

The following chart defines the quantity of notice needed:

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

Requirements during the statutory notice period

During the statutory notification period, a company should:

– not decrease the employee’s wage rate or change any other term or condition of work;

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

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

These are salaries other than overtime pay, trip pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and severance pay and specific legal privileges.

Regular work week

For an employee who usually works the same number of hours every week, a routine work week is a week of that lots of hours, not including overtime hours.

Some staff members do not have a routine work week. That is, they do not work the very same number of hours each week or they are paid on a basis other than time. For these workers, the “routine earnings” for a “regular work week” is the typical quantity of the regular earnings earned by the staff member in the weeks in which the staff member worked throughout the duration of 12 weeks immediately preceding the date the notice was provided.

An employer is not allowed to set up an employee’s vacation 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 duration.

If a company 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 provide written notice

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

There are special guidelines for providing notification of termination if a staff member has an agreement of employment or a collective agreement that provides seniority rights that permit an employee who is to be laid off or whose employment is to be ended to displace (” bump”) other employees.

In that case, the company must publish a notification in the work environment (where it will be seen by the employees) setting out the names, seniority and job category of those workers the employer plans to end and the date of the proposed termination. The posting of the notice is considered to be notification of termination, as of the date of the posting, to an employee who is “bumped” by a staff member named in the notification. However, this notice of termination must still meet the length requirements set out in the ESA.

There are likewise unique guidelines regarding how notification is supplied when there is a mass termination.

Termination pay

A staff member who does not get the written notification needed under the ESA must be given termination pay in lieu of notification. Termination pay is a swelling amount payment equivalent to the regular incomes for a regular work week that a staff member would otherwise have been entitled to during the written notice duration. A worker earns holiday pay on their termination pay. Employers should also 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 notice duration.

Example: Regular work week

Sarah has worked for 3 and a half years. Now her job has been eliminated and her employment has been ended. 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 4 per cent trip pay. Because she worked for more than three years however less than 4 years, she is entitled to 3 weeks’ pay in lieu of notification.

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

$ 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 added to her termination pay:

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The company needs to likewise guarantee ongoing protection for any benefit or pension that used to her for three weeks.

Example: No routine work week

Gerry has actually worked at a nursing home for four years. He works weekly, however 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 employer eliminated his position and did not provide Gerry any written notice of termination. Gerry was ill and off work for two of the 12 weeks instantly preceding the day his employment 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 incomes weekly are determined:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off sick for 2 weeks therefore these weeks are not included in the computation of average earnings) = $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 getaway pay is included to his termination pay:

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company must also guarantee ongoing protection for any advantage or pension that applied to him for four weeks.

When to pay termination pay

Termination pay should be paid to a staff member either 7 days after the employee’s employment is ended or on the worker’s next routine pay date, whichever is later.

Mass termination

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

Meaning of “facility”

An “establishment” is a place at which the company brings on organization. Separate locations can be thought about one facility if either:

– they lie within the exact same town, or

– an employee at one area has legal seniority rights that extend to the other place, allowing the employee to displace another employee (likewise called “bumping rights”).

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

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

Note that where an employee performs work both from their home and from another area where the company brings on company (for instance, an office), their home is not included in the definition of “facility”. Instead, the employee is thought about to have a connection to the workplace location and, for that reason, for the purpose of mass termination, the worker is consisted of with regard to that office place.

Example: where numerous locations 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 solely from another location: she performs work for the company from home and does not work at the workplace.

For the function of mass termination, the company’s London workplace, London storage facility and Sabrina’s London home are considered one “establishment.”

Employer commitments in a mass termination

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

– email to esa_form1_notice@ontario.ca.

– fax to (416) 326-7061.

– personal shipment to the Director’s workplace 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 office of the Director of Employment Standards is located on the 9th flooring, 400 University Avenue, Toronto ON M7A 1T7.

Any notice to the affected employees is ruled out to have been offered up until the Form 1 is received by the Director; in other words, notice of mass termination is ineffective until the Director receives the Form 1.

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

– publish a copy of the Form 1 supplied to the Director in the office where it will come to the attention of the impacted employees.

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

The quantity of notification employees must receive in a mass termination is not based upon the employees’ length of employment, however on the variety of workers who have been terminated. An employer needs to give:

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

– 12 weeks see if the work of 200 to 499 employees is to be ended

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

Exception to the mass termination guidelines

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

– the number of employees whose employment is being terminated represents not more than 10 per cent of the workers who have actually been utilized for a minimum of three months at the establishment

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

Mass termination: resignation by a worker

A worker who has actually received termination notification under the mass termination guidelines who wishes to resign before the termination date provided in the employer’s notice should provide the company at least one week’s written notification of resignation if the worker has actually been utilized for less than two years. If the work period has been two years or more, the staff member must offer at least two weeks’ written notice of resignation. However, the employee does not need to notify of resignation if the employer constructively dismisses the employee or breaches a term of the agreement.

Temporary work after termination date in notification

An employer can supply work to an employee who has been given notification 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 required to supply any additional notification of termination to the employee when the short-lived work ends.

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

Recall rights

A “recall right” is the right of a staff member on a layoff to be called back to work by their employer under a term or condition of work. This right is frequently discovered in cumulative contracts.

A staff member who has recall rights and who is entitled to termination pay due to the fact that 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 severance pay) at that time;
or

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

If an employee is entitled to both termination pay and discontinuance wage, they should make the exact 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 make a choice, the employer should send 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 fails to make a choice, the company and the trade union should try to come to an arrangement to hold the termination pay (and discontinuance wage, if any) in trust for the staff member. If they can not come to a plan, and the trade union encourages the company and the Director of Employment Standards in composing that efforts have actually stopped working, the employer must send out the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, job who holds the cash in trust.

If an employee selects to quit their recall rights or if the recall rights expire, the money that is kept in trust should be sent to the staff member.

If the employee accepts a recall back to work, the cash that is kept in trust will be gone back to the employer.

Exemptions to notice of termination or termination pay

Many of these exemptions are complex. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you need more details. Please likewise refer to the unique rule tool.

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

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

– was employed for a specific length of time or up until the completion 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 task is finished; or

– the term ends or the task is not completed more than 12 months after the employment began; or

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

See likewise: Employment Standards Self-Service Tool

Wrongful dismissal

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

The rules under the ESA about termination and severance of employment are minimum requirements. Some employees might have rights under the common law that are higher than the rights to see of termination (or termination pay) and severance pay under the ESA. A staff member may wish to sue their previous company in court for “wrongful dismissal”. Employees should understand that they can not sue a company for wrongful dismissal and file a claim for termination pay or severance pay with the ministry for the very same termination or severance of work. An employee should choose one or the other. Employees might want to obtain legal guidance worrying their rights.