Termination Of Employment

A number of expressions are commonly utilized to describe scenarios when employment is ended. These include “release,” “released,” “dismissed,” “fired” and “completely laid off.”

Under the Employment Standards Act, 2000 (ESA) an individual’s employment is ended if the company:

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

– “constructively” dismisses a staff member and the staff member resigns, in response, within a sensible time;

– lays a worker off for a duration that is longer than a “momentary layoff”.

In many cases, when an employer ends the employment of a worker who has been continuously used for three months, the company must provide the employee with either written notice of termination, termination pay or a combination (as long as the notification 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 give a staff member a factor why their employment is being terminated. There are, however, some scenarios where an employer can not end a staff member’s work even if the employer is prepared to give proper composed notice 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 employment 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 absence defined in the ESA. Please see the chapter on reprisals.

Receiving termination notice or pay in lieu

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

There are a number of other exemptions to the termination of work arrangements of the ESA. See “Exemptions to see of termination or termination pay.” Please likewise describe the special guideline tool.

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

Constructive dismissal

A useful dismissal may occur when a company makes a considerable change to a fundamental term or condition of a worker’s work without the worker’s real or implied consent.

For example, a worker might be constructively dismissed if the company makes changes to the staff member’s terms of work that result in a considerable decrease in income or a considerable negative modification in such things as the employee’s work location, hours of work, authority, or position. Constructive dismissal might likewise include circumstances where a company bothers or abuses an employee, or an employer provides a worker a demand to “stop or be fired” and the worker resigns in response.

The employee would need to resign in reaction to the modification within a sensible period of time in order for the company’s actions to be considered a termination of work for purposes of the ESA.

Constructive termination is a complex and tough topic. To find out more on useful dismissal, please call the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

An employee is on temporary layoff when an employer cuts down or stops the staff member’s work without ending their employment (for example, laying somebody off at times when there is not sufficient work to do). The simple fact that the company does not define a recall date when laying the employee off does not always mean that the lay-off is not temporary. Note, nevertheless, that a lay-off, even if meant to be short-term, may lead to constructive termination if it is not enabled by the employment agreement.

For the functions 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 earn (or earns typically) in a week.

A week of layoff does not include any week in which the employee did not work for one or more days since the employee was not able or available to work, was subject to disciplinary suspension, or was not supplied with work since of a strike or lockout at their location of work or elsewhere.

Employers are not needed under the ESA to supply employees with a written notification of a short-lived layoff, nor do they have to offer a reason for the lay-off. (They may, nevertheless, be required to do these things under a cumulative arrangement or an employment agreement.)

Under the ESA, a “momentary layoff” can last:

1. not more than 13 weeks of layoff in any period 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 duration of 52 successive weeks, where:- the employee continues to get significant payments from the employer;
or

– the company continues to pay for the advantage of the staff member under a genuine group or employee insurance plan (such as a medical or drug insurance plan) or a genuine retirement or pension strategy;
or

– the employee gets extra joblessness advantages;
or

– the worker would be entitled to receive supplemental welfare however isn’t receiving them because they are utilized somewhere else;
or

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

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

3. a layoff longer than a layoff explained in ‘B’ where the employer recalls a staff member who is represented by a trade union within the time set out in an arrangement 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 company is considered to have terminated the worker’s employment. 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 worker who has actually been utilized continuously for three months or more if either:

– the company has offered the worker appropriate written notice of termination and the notification period has expired

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

Written notification of termination

A worker is entitled to observe of termination (or termination pay rather of notice) if they have been continuously employed for a minimum of three months. A person is considered “utilized” not only while they are actively working, but likewise throughout at any time in which they are not working however the employment relationship still exists (for example, time in which the employee is off sick or on leave or on lay-off).

The amount of notification to which a staff member is entitled depends upon their “duration of employment”. An employee’s duration of work consists of not just all time while the employee is actively working but 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 short-term lay-off, the worker’s employment is deemed (or thought about) to have actually been ended 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, despite the fact that the employee might still be used for purposes of the “continually employed for three months” certification

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

It is possible, in some circumstances, for an individual to have actually been “continuously utilized” for 3 months or more and yet have a duration of work of less than three months. In such scenarios, the worker would be entitled to discover because a staff member who has been continuously utilized for a minimum of three months is entitled to observe, and the minimum notification entitlement of one week uses to a staff member with a duration of work of any length less than one year.

The following chart defines the quantity of notice required:

Note: Special rules figure out the quantity of notification needed when it comes to mass terminations – where the work 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 notification duration, an employer needs to:

– not lower the staff member’s wage rate or change any other term or condition of employment;

– continue to make whatever contributions would be needed to preserve the worker’s advantages strategies; and

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

Regular rate

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

Regular earnings

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 particular contractual privileges.

Regular work week

For an employee who normally works the same variety of hours every week, a routine work week is a week of that numerous hours, not including overtime hours.

Some workers do not have a regular work week. That is, they do not work the same variety of hours every week or they are paid on a basis other than time. For these employees, the “regular salaries” for a “routine work week” is the typical amount of the routine salaries made by the staff member in the weeks in which the employee worked during the duration of 12 weeks immediately preceding the date the notification was provided.

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

If a company supplies longer notice than is needed, the statutory part of the notification duration is the last part of the duration that ends on the date of termination.

How to supply written notice

For the most part, written notification of termination of work must be dealt with to the employee. It can be supplied face to face or by mail, fax or email, as long as delivery can be confirmed.

There are unique guidelines for providing notice of termination if a worker has a contract of work or a cumulative arrangement that supplies seniority rights that allow a staff member who is to be laid off or whose employment is to be ended to displace (” bump”) other workers.

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

There are also special rules regarding how notice is offered when there is a mass termination.

Termination pay

A staff member who does not get the composed notification required under the ESA needs to be given termination pay in lieu of notice. Termination pay is a swelling sum payment equivalent to the routine wages for a routine work week that an employee would otherwise have been entitled to during the written notification duration. A staff member earns trip pay on their termination pay. Employers must also continue to make whatever contributions would be required to maintain the advantages the staff member would have been entitled to had they continued to be utilized through the notice duration.

Example: Regular work week

Sarah has actually worked for three and a half years. Now her job has actually been removed and her work has been terminated. Sarah was not offered any composed notice of termination.

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

Sarah’s routine earnings 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 calculated:

4% of $2,400.00 = $96.00

Finally, her vacation pay is contributed to her termination pay:

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The company should likewise make sure continued protection for any advantage or pension strategies that used to her for 3 weeks.

Example: No routine work week

Gerry has operated at a nursing home for 4 years. He works every week, but his hours differ from week to week. His rate of pay is $25.00 an hour, and he is paid 6 percent holiday pay.

Gerry’s employer eliminated his position and did not give Gerry any composed notification of termination. Gerry was ill and off work for 2 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 four weeks of termination pay.

Gerry’s average incomes per week are determined:

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

His termination pay is determined:

$ 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 added to his termination pay:

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer needs to also ensure ongoing protection for any advantage or pension plans that applied to him for 4 weeks.

When to pay termination pay

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

Mass termination

Special rules for notice of termination might apply in cases of mass termination (when an employer is 50 or more staff members at its establishment within a four-week period).

Meaning of “facility”

An “facility” is a place at which the company continues company. Separate locations can be considered one establishment if either:

– they lie within the exact same town, or

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

Effective October 26, 2023, in cases of mass termination, the term “facility” consists of an employee’s home, but only if the employee works from home and does not work at any other area where the company continues service.

This will need that workers who work solely from another location be thought about for inclusion in the count when identifying whether 50 or more workers have actually been terminated.

Note that where an employee performs work both from their home and from another area where the employer continues service (for instance, an office), their home is not included in the meaning of “establishment”. Instead, the worker is thought about to have a connection to the workplace area and, therefore, for the purpose of mass termination, the worker is consisted of with regard to that office area.

Example: where numerous areas are considered one “establishment”

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

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

Employer responsibilities in a mass termination

When a mass termination takes place, the employer should complete and deliver the Form 1 (Notice of termination of work) to the Director of Employment Standards (Director) by:

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

– fax to (416) 326-7061.

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

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

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

Any notice to the impacted staff members is ruled out to have been provided till the Form 1 is received by the Director; in other words, notice of mass termination is not reliable up until the Director gets the Form 1.

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

– publish a copy of the Form 1 provided to the Director in the work environment where it will concern the attention of the impacted workers.

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

The quantity of notification employees must get in a mass termination is not based upon the workers’ length of employment, however on the number of workers who have actually been ended. A company must give:

– 8 weeks notice if the work of 50 to 199 employees is to be ended

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

– 16 weeks notice if the employment of 500 or more staff members is to be terminated

Exception to the mass termination rules

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

– the variety of employees whose work is being terminated represents not more than 10 per cent of the employees who have been used for a minimum of 3 months at the establishment

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

Mass termination: resignation by a staff member

A worker who has gotten termination notification under the mass termination guidelines who wishes to resign before the termination date provided in the employer’s notice should offer the employer a minimum of one week’s written notice of resignation if the staff member has actually been utilized for less than 2 years. If the employment period has actually been 2 years or more, the staff member must give a minimum of 2 weeks’ written notice of resignation. However, the staff member does not have to notify of resignation if the company constructively dismisses the worker or breaches a term of the agreement.

Temporary work after termination date in notice

An employer can supply work to an employee who has actually been provided notice of termination on a momentary basis in the 13-week period after the termination date set out in the notice without impacting the original date of the termination and without being required to provide any more notification of termination to the staff member when the temporary work ends.

If a staff member 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 composed notification of termination as if the previous notice had never ever been given. The employee’s duration of employment will then likewise include the duration of short-term work.

Recall rights

A “recall right” is the right of an employee 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 collective contracts.

An employee who has recall rights and who is entitled to termination pay since of a layoff of 35 weeks or more may 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

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

If a staff member is entitled to both termination pay and severance pay, they need to make the same option for both.

If a staff member who is not represented by a trade union chooses to keep their recall rights or employment fails to make a choice, the company 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 a worker who is represented by a trade union elects to keep their recall rights or stops working to decide, the employer and the trade union must attempt to come to a plan to hold the termination pay (and employment severance pay, if any) in trust for the staff member. If they can not come to a plan, and the trade union advises the employer and the Director of Employment Standards in composing that efforts have actually stopped working, the employer needs to 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 selects to quit their recall rights or if the recall rights expire, the money that is held in trust should be sent to the worker.

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

Exemptions to see of termination or termination pay

Many of these exemptions are complex. Please call the Employment Standards Information Centre, 1-800-531-5551, if you need more details. Please likewise describe 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 disregard of responsibility that is not insignificant and has not been condoned by the employer. Note: “wilful” includes when an employee intended the resulting repercussion or acted recklessly if they understood or need to have known the effects their conduct would have. Poor work conduct that is unintentional or unintentional is normally not thought about wilful;

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

– the term expires or the job is not completed 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 also: Employment Standards Self-Service Tool

Wrongful dismissal

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

The guidelines under the ESA about termination and severance of work are minimum requirements. Some workers may have rights under the typical law that are higher than the rights to discover of termination (or employment termination pay) and severance pay under the ESA. A worker might desire to sue their previous company in court for “wrongful dismissal”. Employees ought to know that they can not sue a company for wrongful termination and sue for termination pay or severance pay with the ministry for employment the same termination or severance of work. A worker must pick one or the other. Employees may want to get legal recommendations worrying their rights.