Termination Of Employment

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

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

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

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

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

For the most part, when a company ends the work of a staff member who has actually been continuously used for 3 months, the company should supply the staff member with either written notification of termination, termination pay or a mix (as long as the notification and the variety of weeks of termination pay together equivalent the length of notification the worker is entitled to receive).

The ESA does not need an employer to offer a staff member a reason their employment is being ended. There are, however, some scenarios where an employer can not terminate a staff member’s employment even if the company is prepared to give proper written notice or termination pay. For instance, an employer can not end somebody’s employment, or penalize them in any other method, if any part of the reason for the termination of employment is based upon the staff member asking questions about the ESA or working out a right under the ESA, such as refusing to work in excess of the daily or weekly hours of work maximums, or taking a leave of absence defined in the ESA. Please see the chapter on reprisals.

Qualifying for termination notification or pay in lieu

Certain staff members are not entitled to discover of termination or termination pay under the ESA. Examples include: workers who are guilty of wilful misbehavior, disobedience, or wilful neglect of duty that is not minor and has actually not been excused by the employer. Other examples consist of building workers, workers on temporary layoff, staff members who refuse a deal of reasonable alternative work and workers who have actually been employed less than 3 months.

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

The termination-of-employment guidelines are completely separate from any privileges a worker might need to be paid discontinuance wage under the ESA.

Constructive dismissal

A useful termination may happen when a company makes a considerable change to a basic term or condition of a worker’s work without the employee’s actual or implied approval.

For example, a staff member might be constructively dismissed if the company makes modifications to the worker’s terms and conditions of work that result in a significant reduction in wage or a significant unfavorable modification in such things as the employee’s work location, hours of work, authority, or position. Constructive termination might also consist of scenarios where an employer bothers or abuses an employee, or a company gives a worker a warning to “quit or be fired” and the staff member resigns in reaction.

The worker would need to resign in action to the change within a reasonable time period in order for the employer’s actions to be considered a termination of work for purposes of the ESA.

Constructive termination is a complex and tough topic. To learn more on positive dismissal, please contact the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A staff member is on momentary layoff when a company cuts back or stops the worker’s work without ending their employment (for example, laying somebody off at times when there is inadequate work to do). The simple truth that the company does not define a recall date when laying the worker off does not always suggest that the lay-off is not momentary. Note, nevertheless, that a lay-off, even if intended to be short-lived, might lead to positive dismissal if it is not permitted 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 made less than half of what they would ordinarily make (or earns typically) 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 worker was not able or readily available to work, was subject to disciplinary suspension, or was not offered with work because of a strike or lockout at their place of employment or in other places.

Employers are not needed under the ESA to offer staff members with a composed notification of a momentary layoff, nor do they need to offer a reason for the lay-off. (They may, however, be required to do these things under a cumulative agreement 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 duration of 20 successive weeks, but less than 35 weeks of layoff in any duration of 52 consecutive weeks, where:- the staff member continues to get significant payments from the employer;
or

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

– the worker receives supplemental welfare;
or

– the worker would be entitled to receive extra joblessness benefits but isn’t receiving them due to the fact that they are used elsewhere;
or

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

– the company remembers the staff member within the time frame set out in an arrangement with a staff member who is not represented by a trade union;
or

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

If a worker is laid off for a period longer than a short-term layoff as set out above, the employer is considered to have terminated the staff member’s employment. Generally, the employee will then be entitled to termination pay.

Written notification of termination and job termination pay

Under the ESA, an employer can end the work of a worker who has actually been used constantly for 3 months or more if either:

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

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

Written notification of termination

A staff member is entitled to observe of termination (or termination pay instead of notification) if they have actually been continually used for at least three months. An individual is considered “employed” not just while they are actively working, but also throughout any time in which they are not working however the work relationship still exists (for instance, time in which the worker is off ill or on leave or on lay-off).

The amount of notice to which a staff member is entitled depends on their “period of employment”. A staff member’s period of employment includes not just perpetuity while the worker is actively working but likewise at any time that they are not working however the work relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a short-lived lay-off, the staff member’s work is considered (or considered) to have been ended on the very first day of the lay-off-any time after that does not count as part of the staff member’s period of employment, despite the fact that the employee may still be used for functions of the “continuously employed for 3 months” credentials

– if two different periods of work are separated by more than 13 weeks, only the most recent duration counts for functions of notification of termination

It is possible, job in some circumstances, for a person to have been “continually utilized” for 3 months or more and yet have a duration of employment of less than 3 months. In such situations, the staff member would be entitled to notice since a staff member who has been continually utilized for a minimum of 3 months is entitled to discover, and the minimum notice privilege of one week uses to an employee with a period of employment of any length less than one year.

The following chart specifies the amount of notice required:

Note: Special rules figure out the amount of notification required when it comes to mass terminations – where the work of 50 or job more employees is terminated at an employer’s establishment within a four-week period.

Requirements throughout the statutory notification duration

During the statutory notification period, an employer should:

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

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

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

Regular rate

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

Regular wages

These are salaries aside from overtime pay, getaway pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of task pay, termination pay and severance pay and particular contractual privileges.

Regular work week

For a worker who normally works the same variety of hours each week, a routine work week is a week of that many hours, not consisting of overtime hours.

Some staff members do not have a regular work week. That is, they do not work the very same number of hours weekly or they are paid on a basis other than time. For these staff members, the “routine salaries” for a “routine work week” is the average amount of the regular earnings earned by the employee in the weeks in which the employee worked during the duration of 12 weeks instantly preceding the date the notice was given.

A company is not allowed to arrange a staff member’s getaway time throughout the statutory notification period unless the employee-after getting written notification 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 duration is the tail end of the period that ends on the date of termination.

How to provide written notice

In many cases, written notification of termination of employment should be dealt with to the worker. It can be provided face to face or by mail, fax or e-mail, as long as shipment can be confirmed.

There are unique guidelines for offering notification of termination if an employee has an agreement of work or a collective arrangement that offers seniority rights that permit a staff member who is to be laid off or whose work is to be terminated to displace (” bump”) other employees.

Because case, the company must post a notice in the office (where it will be seen by the staff members) setting out the names, seniority and job classification of those workers the company plans to terminate and the date of the proposed termination. The publishing of the notice is thought about to be notification of termination, job as of the date of the posting, to a worker who is “bumped” by a staff member named in the notification. However, this notification of termination should still fulfill the length requirements set out in the ESA.

There are also special guidelines regarding how notification is offered when there is a mass termination.

Termination pay

An employee who does not receive the composed notification needed under the ESA needs to be provided termination pay in lieu of notice. Termination pay is a swelling amount payment equal to the routine wages for a routine work week that a staff member would otherwise have actually been entitled to throughout the composed notification duration. An employee earns vacation pay on their termination pay. Employers need to likewise continue to make whatever contributions would be required to preserve the advantages the worker would have been entitled to had they continued to be utilized through the notification duration.

Example: Regular work week

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

Sarah worked 40 hours a week every week and was paid $20.00 an hour. She also got 4 percent getaway pay. Because she worked for more than 3 years however less than four years, she is entitled to 3 weeks’ pay in lieu of notification.

Sarah’s regular wages for a routine work week are computed:

$ 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 getaway pay on her termination pay is calculated:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The employer needs to also make sure ongoing protection for any advantage or pension that used to her for 3 weeks.

Example: No routine work week

Gerry has actually worked at a retirement home for four years. He works each week, however his hours vary 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 2 of the 12 weeks immediately preceding the day his employment was ended. Gerry earned $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 typical profits per week are calculated:

$ 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 calculation of typical incomes) = $180.00 a week

His termination pay is determined:

$ 180.00 × 4 weeks = $720.00

Then his vacation pay on his termination pay is calculated:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company should likewise ensure continued coverage for any advantage or pension plans that applied to him for 4 weeks.

When to pay termination pay

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

Mass termination

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

Meaning of “establishment”

An “facility” is an area at which the employer carries on service. Separate areas can be thought about one facility if either:

– they lie within the exact same town, or

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

Effective October 26, 2023, in cases of mass termination, the term “establishment” includes an employee’s home, but just if the staff member works from home and does not operate at any other place where the company brings on business.

This will require that workers who work exclusively remotely be thought about for inclusion in the count when figuring out whether 50 or more staff members have been ended.

Note that where a staff member carries out work both from their home and from another place where the company continues service (for instance, a workplace), their home is not included in the meaning of “establishment”. Instead, the worker is considered to have a connection to the workplace place and, therefore, for the purpose of mass termination, the worker is consisted of with regard to that office location.

Example: where multiple locations are thought about one “establishment”

ABC Company has a workplace and a storage facility located in London, job ON. Sabrina resides in London and works for ABC Company solely from another location: she performs work for the business from home and does not operate at the office.

For the function of mass termination, the company’s London office, London warehouse and Sabrina’s London home are thought about one “establishment.”

Employer obligations in a mass termination

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

– e-mail to esa_form1_notice@ontario.ca.

– fax to (416) 326-7061.

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

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

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 employees is ruled out to have been offered up until the Form 1 is gotten by the Director; in other words, notice of mass termination is not efficient up until the Director receives the Form 1.

In addition to providing staff members with individual notices of termination, the employer must, on the very first day of the notification period:

– post a copy of the Form 1 supplied to the Director in the work environment where it will come to the attention of the impacted workers.

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

The amount of notice staff members must receive in a mass termination is not based upon the workers’ length of employment, but on the number of employees who have been ended. An employer must offer:

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

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

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

Exception to the mass termination guidelines

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

– the variety of workers whose work is being ended represents not more than 10 percent of the workers who have actually been utilized for at least 3 months at the establishment

– none of the terminations are triggered by the long-term discontinuance of all or part of the employer’s company at the establishment

Mass termination: resignation by an employee

An employee who has actually gotten termination notification under the mass termination guidelines who wishes to resign before the termination date provided in the employer’s notification must provide the employer at least one week’s written notification of resignation if the employee has been utilized for less than 2 years. If the employment period has actually been two years or more, the employee needs to provide a minimum of 2 weeks’ composed notification of resignation. However, the employee does not need to notify 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 an employee who has been provided notice of termination on a temporary 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 required to supply any more notification of termination to the worker when the momentary work ends.

If a worker works beyond the 13-week period after the termination date and after that has their employment terminated, the worker will be entitled to a new composed notice of termination as if the previous notification had never ever been given. The worker’s duration of work will then also consist of the duration of short-term work.

Recall rights

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

A worker who has recall rights and who is entitled 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 severance pay, if they were entitled to discontinuance wage) at that time;
or

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

If a worker is entitled to both termination pay and severance pay, they need to make the very same choice for job both.

If a worker who is not represented by a trade union chooses to keep their recall rights or stops working to make an option, the employer 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 choose, the employer 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 worker. 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 severance pay, if any) to the Director of Employment Standards, who holds the money in trust.

If an employee picks to offer up their recall rights or if the recall rights end, the money that is held in trust needs to be sent to the staff member.

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

Exemptions to discover of termination or termination pay

A number of these exemptions are complicated. Please contact the Employment Standards Information Centre, 1-800-531-5551, if you require more details. Please likewise refer to the unique guideline tool.

The notification of termination and termination pay requirements of the ESA do not apply to a staff member who:

– is guilty of wilful misconduct, disobedience or wilful overlook of responsibility that is not unimportant and has not been condoned by the company. Note: “wilful” includes when a worker meant the resulting repercussion or acted recklessly if they understood or should have understood the impacts their conduct would have. Poor work conduct that is unexpected or unintentional is normally not considered wilful;

– was employed for a specific length of time or until the conclusion of a specific job. However, such a worker will be entitled to observe of termination or termination pay if:- the work ends before the term expires or the job is completed; or

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

– the work continues for 3 months or more after the term ends or the task is completed;

See also: Employment Standards Self-Service Tool

Wrongful dismissal

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

The rules under the ESA about termination and severance of employment are minimum requirements. Some workers might have rights under the common law that are higher than the rights to discover of termination (or termination pay) and discontinuance wage under the ESA. A staff member may wish to sue their previous employer in court for “wrongful dismissal”. Employees should know that they can not sue an employer for wrongful termination and sue for termination pay or severance pay with the ministry for the exact same termination or severance of work. A worker should pick one or the other. Employees might want to obtain legal recommendations concerning their rights.