Termination Of Employment

A number of expressions are typically utilized to explain situations when work is ended. These include “release,” “released,” “dismissed,” “fired” and “completely laid off.”

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

– dismisses or stops utilizing an employee, consisting of where an employee is no longer employed due to the personal bankruptcy or insolvency of the company;

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

– lays an employee off for a period that is longer than a “short-term layoff”.

In many cases, when a company ends the work of an employee who has actually been continuously used for three months, the employer should offer the staff member with either written 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 receive).

The ESA does not need an employer to give a worker a reason that their work is being terminated. There are, however, some circumstances where an employer can not end a staff member’s employment even if the employer is prepared to provide proper composed notice or termination pay. For example, an employer 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 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, employment or taking a leave of absence specified in the ESA. Please see the chapter on reprisals.

Qualifying for termination notice or pay in lieu

Certain workers are not entitled to notice of termination or termination pay under the ESA. Examples include: workers who are guilty of wilful misconduct, disobedience, or wilful neglect of task that is not unimportant and has not been condoned by the company. Other examples include building workers, workers on temporary layoff, workers who decline a deal of reasonable alternative work and employees who have been utilized less than three months.

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

The termination-of-employment guidelines are completely different from any privileges an employee might need to be paid discontinuance wage under the ESA.

Constructive dismissal

A positive termination may happen when a company makes a substantial modification to an essential term or condition of an employee’s work without the staff member’s real or implied authorization.

For instance, an employee might be constructively dismissed if the company makes changes to the worker’s conditions of work that lead to a substantial decrease in salary or a significant unfavorable modification in such things as the worker’s work place, hours of work, authority, or position. Constructive dismissal may likewise include situations where an employer bothers or abuses a worker, or an employer gives a worker a demand to “quit or be fired” and the employee resigns in response.

The worker would need to resign in reaction to the change within a reasonable amount of time in order for the employer’s actions to be thought about a termination of employment for functions of the ESA.

Constructive termination is a complex and hard topic. 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 temporary layoff when an employer cuts down or stops the staff member’s work without ending their work (for instance, laying someone off at times when there is insufficient work to do). The mere truth that the company does not specify a recall date when laying the worker off does not necessarily imply that the lay-off is not momentary. Note, nevertheless, that a lay-off, even if planned to be short-lived, may result in useful termination if it is not enabled by the work contract.

For the purposes of the termination provisions of the ESA, a “week of layoff” is a week in which the employee made less than half of what they would generally make (or makes usually) in a week.

A week of layoff does not consist of any week in which the staff member did not work for several days because the staff member was not able or offered to work, underwent disciplinary suspension, or was not offered with work due to the fact that of a strike or lockout at their location of employment or elsewhere.

Employers are not required under the ESA to offer workers with a composed notice of a short-term layoff, nor do they need to supply a reason for the lay-off. (They may, however, be needed to do these things under a collective arrangement or a work contract.)

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

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

– the staff member gets extra welfare;
or

– the staff member would be entitled to receive additional unemployment benefits but isn’t getting them since they are employed elsewhere;
or

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

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

3. a layoff longer than a layoff explained in ‘B’ where the company recalls a worker who is represented by a trade union within the time set out in a contract between the union and the company.

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

Written notice of termination and termination pay

Under the ESA, a company can terminate the employment of a staff member who has actually been utilized continually for 3 months or more if either:

– the company has offered the staff member proper written notice of termination and the notice period has actually ended

– the company pays termination pay to the worker where no written notice or less notification than is needed is offered

Written notice of termination

A staff member is entitled to discover of termination (or termination pay rather of notification) if they have actually been continually used for at least three months. A person is thought about “employed” not only while they are actively working, however also throughout at any time in which they are not working however the work relationship still exists (for instance, time in which the staff member is off sick or on leave or on lay-off).

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

– if a lay-off goes on longer than a momentary lay-off, the staff member’s employment is deemed (or thought about) to have actually been terminated on the first day of the lay-off-any time after that does not count as part of the worker’s period of work, even though the staff member might still be utilized for functions of the “constantly used for three months” qualification

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

It is possible, in some circumstances, for an individual to have been “constantly used” for three months or more and yet have a duration of work of less than 3 months. In such situations, the employee would be entitled to notice because an employee who has been constantly utilized for a minimum of three months is entitled to notice, and the minimum notice privilege of one week applies to an employee with a duration of work of any length less than one year.

The following chart defines the amount of notification required:

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

Requirements throughout the statutory notification duration

During the statutory notice period, a company needs to:

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

– continue to make whatever contributions would be required to keep the staff member’s advantages plans; and

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

Regular rate

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

Regular incomes

These are earnings other than overtime pay, trip pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and severance pay and particular contractual entitlements.

Regular work week

For a worker who normally works the same number of hours every week, a routine work week is a week of that numerous hours, not consisting of overtime hours.

Some employees do not have a routine work week. That is, they do not work the very same variety of hours weekly or they are paid on a basis other than time. For these workers, the “regular wages” for a “regular work week” is the average amount of the routine incomes earned by the worker in the weeks in which the staff member worked throughout the duration of 12 weeks right away preceding the date the notice was given.

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

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

How to supply written notification

For the most part, written notification of termination of employment must be addressed to the staff member. It can be supplied in person or by mail, fax or e-mail, as long as shipment can be verified.

There are special rules for offering notification of termination if a staff member has an agreement of work or a collective contract that supplies seniority rights that allow an employee who is to be laid off or whose employment is to be ended to displace (” bump”) other staff members.

Because case, the employer should publish a in the office (where it will be seen by the staff members) setting out the names, seniority and task category of those employees the employer plans to end and the date of the proposed termination. The publishing of the notice is thought about 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 notification of termination must still meet the length requirements set out in the ESA.

There are likewise special rules regarding how notification is offered when there is a mass termination.

Termination pay

An employee who does not receive the composed notification required under the ESA should be provided termination pay in lieu of notification. Termination pay is a swelling amount payment equal to the regular earnings for a regular work week that a worker would otherwise have been entitled to throughout the written notification period. An employee earns holiday pay on their termination pay. Employers should likewise continue to make whatever contributions would be required to preserve the benefits the staff member would have been entitled to had they continued to be employed through the notification duration.

Example: Regular work week

Sarah has actually worked for three and a half years. Now her job has actually been gotten rid of and her work has been terminated. Sarah was not given any composed notification of termination.

Sarah worked 40 hours a week weekly and was paid $20.00 an hour. She likewise got four per cent trip pay. Because she worked for more than three years but less than 4 years, she is entitled to three weeks’ pay in lieu of notification.

Sarah’s regular salaries for a regular work week are computed:

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

Her termination pay is calculated:

$ 800.00 X 3 weeks = $2,400.00

Then her holiday pay on her termination pay is 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 employer should also make sure ongoing protection for any advantage or pension that used to her for three weeks.

Example: No regular work week

Gerry has worked at a nursing home for four years. He works every week, but his hours vary from week to week. His rate of pay is $25.00 an hour, and he is paid 6 percent getaway pay.

Gerry’s company removed his position and did not offer Gerry any composed notification of termination. Gerry was ill and off work for 2 of the 12 weeks instantly preceding the day his employment was terminated. 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 typical earnings per week are determined:

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

His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00

Then his trip pay on his termination pay is calculated:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer should also make sure ongoing coverage for any advantage or pension plans that applied to him for 4 weeks.

When to pay termination pay

Termination pay must be paid to an employee either 7 days after the staff member’s work is terminated or on the worker’s next regular pay date, whichever is later on.

Mass termination

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

Meaning of “establishment”

An “establishment” is a place at which the employer continues service. Separate locations can be thought about one facility if either:

– they lie within the very same town, or

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

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

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

Note that where a worker performs work both from their home and from another place where the employer continues business (for example, a workplace), their home is not consisted of in the meaning of “establishment”. Instead, the staff member is considered to have a connection to the workplace location and, therefore, for the function of mass termination, the worker is included with regard to that workplace location.

Example: where several places are considered one “establishment”

ABC Company has a workplace and a storage facility located in London, ON. Sabrina lives in London and works for ABC Company exclusively remotely: she carries out work for the business from home and does not work at the office.

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

Employer responsibilities in a mass termination

When a mass termination occurs, the company should complete 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.

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

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

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

Any notification to the affected employees is ruled out to have been given till the Form 1 is gotten by the Director; simply put, notification of mass termination is not reliable up until the Director receives the Form 1.

In addition to supplying staff members with specific notices of termination, the company must, on the very first day of the notification duration:

– post a copy of the Form 1 offered to the Director in the office where it will concern the attention of the impacted workers.

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

The quantity of notice employees should get in a mass termination is not based on the employees’ length of work, employment however on the variety of workers who have actually been ended. An employer needs to offer:

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

– 12 weeks observe if the employment of 200 to 499 staff members is to be terminated

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

Exception to the mass termination rules

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

– the variety of workers whose employment is being terminated represents not more than 10 per cent of the staff members who have actually been utilized for at least three months at the establishment

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

Mass termination: resignation by a worker

A worker who has received termination notification under the mass termination rules who wishes to resign before the termination date offered in the employer’s notification need to give the employer a minimum of one week’s composed notification of resignation if the employee has actually been used for less than 2 years. If the work period has actually been two years or more, the employee must give a minimum of two weeks’ written notification of resignation. However, the worker does not have to give notification of resignation if the company constructively dismisses the worker or breaches a regard to the contract.

Temporary work after termination date in notification

A company can provide work to a worker who has been notified of termination on a short-term basis in the 13-week period after the termination date set out in the notice without affecting the initial date of the termination and without being needed to supply any more notice of termination to the employee when the short-lived work ends.

If an employee works beyond the 13-week period after the termination date and then has their employment ended, the staff member will be entitled to a brand-new composed notification of termination as if the previous notice had never been given. The employee’s duration of work will then also include the duration of short-term 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 found in cumulative agreements.

An employee who has recall rights and employment 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

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

If an employee is entitled to both termination pay and severance pay, they need to 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 fails to make a choice, the employer needs to send the quantity of the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

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

If a staff member chooses to provide up their recall rights or if the recall rights end, the cash that is held in trust must be sent out to the worker.

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

Exemptions to discover of termination or termination pay

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

The notice of termination and termination pay requirements of the ESA do not apply to a worker who:

– is guilty of wilful misbehavior, disobedience or wilful overlook of duty that is not unimportant and has actually not been condoned by the employer. Note: “wilful” includes when an employee planned the resulting effect or acted recklessly if they understood or ought to have known the impacts their conduct would have. Poor work conduct that is unexpected or unintentional is generally ruled out wilful;

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

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

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

See likewise: Employment Standards Self-Service Tool

Wrongful termination

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

The rules under the ESA about termination and severance of employment are minimum requirements. Some workers may have rights under the common law that are greater than the rights to observe of termination (or termination pay) and severance pay under the ESA. A staff member may desire to sue their former company in court for “wrongful termination”. Employees need to know that they can not take legal action against a company for wrongful termination and sue for termination pay or discontinuance wage with the ministry for the very same termination or severance of work. An employee needs to select one or the other. Employees might want to get legal suggestions worrying their rights.