Termination Of Employment

A variety of expressions are typically used to explain scenarios when employment is ended. These include « release, » « discharged, » « dismissed, » « fired » and « completely laid off. »

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

– dismisses or stops utilizing a staff member, 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 staff member off for a period that is longer than a « temporary layoff ».

Most of the times, when an employer ends the work of an employee who has actually been continuously employed for three months, the employer should supply the worker with either written notification of termination, termination pay or a combination (as long as the notice and the number of weeks of termination pay together equivalent the length of notice the worker is entitled to get).

The ESA does not need a company to provide an employee a factor why their employment is being ended. There are, employment however, some circumstances where an employer can not end a staff member’s work even if the company is prepared to provide proper composed notification or termination pay. For example, an employer can not end someone’s work, or punish them in any other way, if any part of the factor for the termination of work is based on the worker asking questions about the ESA or exercising a right under the ESA, such as declining to work in excess of the daily or weekly hours of work optimums, or taking a leave of absence specified in the ESA. Please see the chapter on reprisals.

Getting approved for termination notice or pay in lieu

Certain employees are not entitled to see of termination or termination pay under the ESA. Examples consist of: employees who are guilty of wilful misbehavior, disobedience, or wilful overlook of duty that is not insignificant and has not been excused by the company. Other examples consist of building workers, workers on momentary layoff, staff members who refuse an offer of affordable alternative work and employees who have actually been employed less than 3 months.

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

The termination-of-employment rules are totally separate from any entitlements a staff member might need to be paid discontinuance wage under the ESA.

Constructive dismissal

A positive termination might happen when an employer makes a substantial modification to a fundamental term or condition of a staff member’s employment without the staff member’s real or implied approval.

For instance, a staff member may be constructively dismissed if the employer makes modifications to the employee’s terms of work that lead to a substantial decrease in wage or a substantial unfavorable change in such things as the employee’s work area, hours of work, authority, or position. Constructive termination may also include scenarios where an employer harasses or abuses a worker, or an employer provides a worker a warning to « quit or be fired » and the employee resigns in reaction.

The employee would have to resign in response to the modification within a reasonable time period in order for the company’s actions to be considered a termination of employment for purposes of the ESA.

Constructive dismissal is a complex and tough subject. To find out more on constructive termination, 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 instance, laying somebody off sometimes when there is insufficient work to do). The simple reality that the company does not specify a recall date when laying the employee off does not always imply that the lay-off is not short-term. Note, nevertheless, that a lay-off, even if intended to be short-term, may lead to constructive dismissal if it is not enabled by the employment agreement.

For the purposes of the termination provisions of the ESA, a « week of layoff » is a week in which the employee earned less than half of what they would normally 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 one or more days because the staff member was unable or offered to work, went through disciplinary suspension, or was not provided with work since of a strike or lockout at their location of work or in other places.

Employers are not required under the ESA to supply employees with a composed notice of a short-term layoff, nor do they need to provide a factor for the lay-off. (They may, nevertheless, be required to do these things under a collective contract or an employment agreement.)

Under the ESA, a « temporary layoff » can last:

1. not more than 13 weeks of layoff in any duration 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 staff member continues to get considerable payments from the company;
or

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

– the staff member gets supplementary welfare;
or

– the staff member would be entitled to receive additional welfare but isn’t receiving them since they are utilized elsewhere;
or

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

– the company recalls the employee within the time frame set out in an arrangement 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-lived layoff as set out above, the company is considered to have actually ended the staff member’s work. Generally, the worker will then be entitled to termination pay.

Written notice of termination and termination pay

Under the ESA, an employer can end the work of a staff member who has actually been utilized constantly for employment three months or more if either:

– the employer has actually provided the employee appropriate written notice of termination and the notification duration has expired

– the employer pays termination pay to the worker where no composed notice or less notice than is needed is provided

Written notification of termination

An employee is entitled to observe of termination (or termination pay instead of notice) if they have been continually utilized for at least 3 months. An individual is thought about « used » 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 ill or on leave or on lay-off).

The quantity of notification to which a worker is entitled depends on their « period of work ». A worker’s duration of work consists of not only perpetuity while the employee is actively working but also 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 short-term lay-off, the employee’s work is deemed (or thought about) to have been terminated on the first day of the lay-off-any time after that does not count as part of the staff member’s period of work, although the staff member may still be utilized for purposes of the « continuously used for three months » qualification

– if two different durations of employment are separated by more than 13 weeks, only the most current period counts for purposes of notification of termination

It is possible, in some scenarios, for a person to have been « continuously employed » for 3 months or more and yet have a duration of employment of less than three months. In such situations, the staff member would be entitled to see due to the fact that a worker who has actually been constantly utilized for a minimum of 3 months is entitled to discover, and the minimum notice privilege of one week applies to a staff member with a duration of employment of any length less than one year.

The following chart specifies the quantity of notice needed:

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

Requirements throughout the statutory notification period

During the statutory notification period, a company must:

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

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

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

Regular rate

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

Regular incomes

These are incomes aside from overtime pay, getaway pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and discontinuance wage and particular contractual entitlements.

Regular work week

For a worker who generally works the very same number of hours each week, a routine work week is a week of that lots of hours, not consisting of overtime hours.

Some employees do not have a routine work week. That is, they do not work the same number of hours every week or they are paid on a basis other than time. For these employees, the « routine earnings » for a « routine work week » is the typical quantity of the routine earnings earned by the worker in the weeks in which the staff member worked throughout the duration of 12 weeks immediately preceding the date the notice was offered.

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

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

How to offer written notice

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

There are unique guidelines for providing notice of termination if a staff member has a contract of employment or a collective agreement that offers seniority rights that permit an employee who is to be laid off or whose work is to be ended to displace ( » bump ») other staff members.

In that case, the employer should post a notification in the work environment (where it will be seen by the employees) setting out the names, seniority and task category of those workers the employer means to terminate and the date of the proposed termination. The publishing of the notice is thought about to be notification of termination, as of the date of the posting, to a staff member who is « bumped » by a worker named in the notice. However, this notification of termination must still fulfill the length requirements set out in the ESA.

There are also unique rules concerning how notification is offered when there is a mass termination.

Termination pay

An employee who does not get the written notice needed under the ESA should be provided termination pay in lieu of notice. Termination pay is a swelling amount payment equal to the regular wages for a routine work week that a staff member would otherwise have actually been entitled to during the written notification duration. A worker earns trip pay on their termination pay. Employers must likewise continue to make whatever contributions would be needed to keep the benefits the worker would have been entitled to had they continued to be employed through the notification period.

Example: Regular work week

Sarah has worked for 3 and a half years. Now her job has been removed and her employment has been terminated. Sarah was not offered any composed notification of termination.

Sarah worked 40 hours a week weekly and was paid $20.00 an hour. She also received 4 percent getaway pay. Because she worked for more than 3 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 calculated:

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

Her termination pay is computed:

$ 800.00 X 3 weeks = $2,400.00

Then her vacation pay on her termination pay is determined:

4% of $2,400.00 = $96.00

Finally, her trip 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 ensure continued protection for any benefit or pension plans that applied to her for three weeks.

Example: No routine work week

Gerry has actually worked at an assisted living home for 4 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 percent trip pay.

Gerry’s employer eliminated his position and did not provide Gerry any composed notice of termination. Gerry was ill and off work for two of the 12 weeks right away preceding the day his employment was ended. Gerry made $1,800.00 in the 12 weeks before the day on which his employment ended.

Gerry is entitled to 4 weeks of termination pay.

Gerry’s average profits each week are determined:

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

His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00

Then his holiday pay on his termination pay is computed:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

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

When to pay termination pay

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

Mass termination

Special guidelines for notice of termination might use in cases of mass termination (when a company is ending 50 or more workers at its facility within a four-week period).

Meaning of « establishment »

An « facility » is an area at which the employer carries on service. 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 location, permitting the employee to displace another staff member (also called « bumping rights »).

Effective October 26, 2023, in cases of mass termination, the term « facility » includes an employee’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 require that workers who work solely from another location be thought about 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 brings on company (for instance, an office), employment their home is not consisted of in the meaning of « establishment ». Instead, the employee is considered to have a connection to the workplace location and, therefore, for the purpose of mass termination, the staff member is consisted of with regard to that office location.

Example: where numerous places are considered one « facility »

ABC Company has an office and a warehouse located in London, ON. Sabrina lives 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 office.

For the purpose of mass termination, the business’s London office, London storage facility and Sabrina’s London home are thought about one « facility. »

Employer obligations in a mass termination

When a mass termination happens, the employer needs to 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.

– personal delivery 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 delivery can be confirmed.

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

Any notice to the impacted workers is not considered to have been given until the Form 1 is gotten by the Director; simply put, notification of mass termination is ineffective until the Director receives the Form 1.

In addition to supplying employees with individual notices of termination, the employer must, on the very first day of the notice period:

– publish a copy of the Form 1 supplied to the Director in the work environment where it will pertain to the attention of the affected staff members.

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

The amount of notice employees must receive in a mass termination is not based on the employees’ length of work, however on the number of staff members who have actually been terminated. A company should provide:

– 8 weeks discover if the employment of 50 to 199 staff members is to be terminated

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

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

Exception to the mass termination rules

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

– the number of staff members whose employment is being ended represents not more than 10 per cent of the workers who have been employed for at least 3 months at the establishment

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

Mass termination: resignation by an employee

A staff member who has received termination notice under the mass termination rules who wishes to resign before the termination date provided in the employer’s notice must give the company at least one week’s written notice of resignation if the worker has actually been used for less than two years. If the work duration has actually been 2 years or more, the staff member needs to give a minimum of 2 weeks’ composed notification of resignation. However, the worker does not have to notify of resignation if the company constructively dismisses the worker or breaches a term of the contract.

Temporary work after termination date in notice

A company can supply 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 impacting the initial date of the termination and without being needed to supply any further notification of termination to the worker when the temporary work ends.

If a worker works beyond the 13-week period after the termination date and after that has their work ended, the worker will be entitled to a new written notice of termination as if the previous notice had never ever been offered. The employee’s period of employment will then also consist of the period of temporary work.

Recall rights

A « recall right » is the right of a staff member on a layoff to be called back to work by their company under a term or condition of employment. This right is typically found in cumulative arrangements.

A worker who has recall rights and who is to termination pay due to the fact that of a layoff of 35 weeks or more might choose to:

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

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

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

If a staff member who is not represented by a trade union chooses to keep their recall rights or stops working to choose, the company should send out the amount of the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If a staff member who is represented by a trade union chooses to keep their recall rights or fails to decide, the employer and the trade union must try to come to a plan to hold the termination pay (and severance pay, if any) in trust for the staff member. If they can not come to a plan, and the trade union encourages the employer and the Director of Employment Standards in composing that efforts have failed, the company needs to send out the termination pay (and severance pay, if any) to the Director of Employment Standards, employment who holds the cash in trust.

If a worker selects to provide up their recall rights or if the recall rights end, the money that is held in trust must be sent out to the employee.

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

Exemptions to discover of termination or termination pay

Many of these exemptions are intricate. Please contact the Employment Standards Information Centre, 1-800-531-5551, if you require more details. Please also refer to the unique rule tool.

The notification of termination and termination pay requirements of the ESA do not use to a worker who:

– is guilty of wilful misconduct, disobedience or wilful overlook of duty that is not minor and has actually not been condoned by the company. Note: « wilful » consists of when an employee intended the resulting repercussion or acted recklessly if they knew or need to have known the effects their conduct would have. Poor work conduct that is accidental or unintentional is typically not thought about wilful;

– was worked with for a specific length of time or till the completion of a particular job. However, such a staff member will be entitled to discover of termination or employment termination pay if:- the work ends before the term expires or the job is finished; or

– the term ends or the task is not finished more than 12 months after the work started; or

– the employment continues for 3 months or more after the term ends or the task is finished;

See likewise: Employment Standards Self-Service Tool

Wrongful termination

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

The guidelines under the ESA about termination and severance of employment are minimum requirements. Some workers may 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 might want to sue their former company in court for « wrongful dismissal ». Employees should understand that they can not sue an employer for wrongful termination and submit a claim 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.