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Termination Of Employment

A number of expressions are frequently used to describe situations when employment is terminated. These consist of “release,” “released,” “dismissed,” “fired” and “permanently laid off.”

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

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

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

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

Most of the times, when an employer ends the employment of a staff member who has been continuously employed for three months, the employer needs to supply the employee with either written notification of termination, termination pay or a combination (as long as the notification and the variety of weeks of termination pay together equal the length of notice the worker is entitled to get).

The ESA does not need a company to give an employee a reason their employment is being terminated. There are, nevertheless, some situations where an employer can not terminate a staff member’s employment even if the employer is prepared to offer appropriate written notice or termination pay. For example, a company can not end somebody’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 concerns 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 specified in the ESA. Please see the chapter on reprisals.

Getting approved for termination notice or pay in lieu

Certain staff members are not entitled to see of termination or termination pay under the ESA. Examples consist of: workers who are guilty of wilful misbehavior, disobedience, or wilful disregard of task that is not insignificant and has actually not been excused by the company. Other examples include building and construction staff members, employees on short-term layoff, employees who refuse a deal of reasonable alternative employment and employees who have actually been employed less than 3 months.

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

The termination-of-employment rules are entirely different from any entitlements a worker might need to be paid discontinuance wage under the ESA.

Constructive dismissal

A positive dismissal may happen when an employer makes a significant modification to a basic term or condition of a worker’s employment without the staff member’s real or implied permission.

For example, a worker might be constructively dismissed if the employer makes changes to the employee’s terms of work that lead to a significant reduction in income or a substantial unfavorable change in such things as the worker’s work place, hours of work, authority, or employment position. Constructive termination might also consist of situations where an employer bothers or abuses a worker, or an employer gives a staff member a final notice to “stop or be fired” and the worker resigns in response.

The staff member would need to resign in action to the change within a sensible time period in order for the company’s actions to be considered a termination of work for functions of the ESA.

Constructive dismissal is a complex and hard subject. For additional information on constructive dismissal, please contact the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A staff member is on short-lived layoff when a company cuts down or stops the worker’s work without ending their work (for instance, laying somebody off at times when there is not enough work to do). The mere fact that the company does not define a recall date when laying the staff member off does not necessarily imply that the lay-off is not momentary. Note, nevertheless, that a lay-off, even if meant to be short-lived, might lead to positive dismissal if it is not permitted by the employment contract.

For the functions of the termination arrangements of the ESA, a “week of layoff” is a week in which the staff member made less than half of what they would normally earn (or earns usually) in a week.

A week of layoff does not consist of any week in which the worker did not work for several days because the worker was unable or available to work, underwent disciplinary suspension, or was not supplied with work because of a strike or lockout at their location of employment or somewhere else.

Employers are not needed under the ESA to supply workers with a written notice of a momentary layoff, nor do they need to provide a reason for the lay-off. (They may, nevertheless, be required to do these things under a cumulative contract or an employment contract.)

Under the ESA, a “short-lived 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 duration of 52 successive weeks, where:- the staff member continues to receive significant payments from the employer;
or

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

– the worker gets extra joblessness advantages;
or

– the staff member would be entitled to get supplemental welfare however isn’t getting them due to the fact that they are employed in other places;
or

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

– the employer 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 described in ‘B’ where the employer recalls an employee who is represented by a trade union within the time set out in an arrangement in between the union and the employer.

If an employee is laid off for a duration longer than a momentary layoff as set out above, the company is thought about to have actually terminated the worker’s employment. Generally, the employee will then be entitled to termination pay.

Written notification of termination and termination pay

Under the ESA, a company can end the employment of a staff member who has actually been used continuously for three months or more if either:

– the employer has offered the worker appropriate written notice of termination and the notification duration has expired

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

Written notification of termination

A worker is entitled to notice of termination (or termination pay instead of notice) if they have actually been continuously utilized for at least three months. An individual is thought about “employed” not just while they are actively working, but also throughout at any time in which they are not working however the employment relationship still exists (for instance, time in which the employee is off ill or on leave or on lay-off).

The quantity of notice to which a staff member is entitled depends on their “period of work”. A staff member’s period of work includes not only perpetuity while the worker is actively working however also whenever that they are not working however the work relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a momentary lay-off, the worker’s employment is deemed (or considered) to have been ended on the first day of the lay-off-any time after that does not count as part of the staff member’s duration of work, although the staff member may still be employed for functions of the “continuously utilized for 3 months” credentials

– if two separate durations of work are separated by more than 13 weeks, only the most recent period counts for purposes of notification of termination

It is possible, in some situations, for a person to have actually been “continuously utilized” for three months or more and yet have a duration of employment of less than three months. In such situations, the worker would be entitled to notice because a staff member who has actually been continuously used for a minimum of three months is entitled to observe, and the minimum notice privilege of one week uses to an employee with a duration of work of any length less than one year.

The following chart defines the quantity of notification needed:

Note: Special rules determine the quantity of notification required in the case of mass terminations – where the work of 50 or more workers is terminated at a company’s facility within a four-week period.

Requirements throughout the statutory notification period

During the statutory notice duration, a company should:

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

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

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

These are incomes aside from overtime pay, vacation pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of task pay, termination pay and severance pay and specific legal entitlements.

Regular work week

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

Some employees 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 aside from time. For these staff members, the “regular incomes” for a “routine work week” is the typical quantity of the regular earnings earned by the worker in the weeks in which the employee worked throughout the duration of 12 weeks instantly preceding the date the notice was offered.

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

If a company offers longer notice than is required, 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 notice

Most of the times, composed notification of termination of employment need to be dealt with to the staff member. It can be offered personally or by mail, fax or email, as long as shipment can be confirmed.

There are special guidelines for providing notification of termination if an employee has a contract of employment or a collective contract that supplies seniority rights that allow a worker who is to be laid off or whose work is to be terminated to displace (” bump”) other employees.

Because case, the employer must publish a notice in the workplace (where it will be seen by the workers) setting out the names, seniority and task category of those staff members the company plans to terminate and the date of the proposed termination. The posting of the notification is thought about to be notice of termination, since the date of the publishing, to a worker who is “bumped” by an employee called in the notice. However, this notice of termination must still satisfy the length requirements set out in the ESA.

There are also special rules concerning how notification is provided when there is a mass termination.

Termination pay

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

Example: Regular work week

Sarah has worked for three and a half years. Now her task has actually been eliminated and her work has been terminated. Sarah was not given any written notice of termination.

Sarah worked 40 hours a week each week and was paid $20.00 an hour. She also received four percent vacation pay. Because she worked for more than three years but less than four years, she is entitled to 3 weeks’ pay in lieu of notification.

Sarah’s routine incomes for a regular 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 vacation pay on her termination pay is determined:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The company must likewise guarantee ongoing coverage for any benefit or pension strategies that applied to her for three weeks.

Example: No regular work week

Gerry has operated 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 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 work was terminated. Gerry earned $1,800.00 in the 12 weeks before the day on which his work ended.

Gerry is entitled to 4 weeks of termination pay.

Gerry’s average revenues each week are calculated:

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

His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00

Then his getaway pay on his termination pay is calculated:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer should also ensure ongoing coverage for any advantage or pension strategies that applied to him for four weeks.

When to pay termination pay

Termination pay should be paid to a worker either seven days after the employee’s work is ended or on the worker’s next regular pay date, whichever is later on.

Mass termination

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

Meaning of “facility”

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

– they are located within the same municipality, or

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

Effective October 26, 2023, in cases of mass termination, the term “facility” includes a worker’s home, however only if the employee works from home and does not work at any other location where the company carries on business.

This will need that employees who work solely remotely be thought about for inclusion in the count when figuring out whether 50 or more employees have actually been terminated.

Note that where a staff member carries out work both from their home and from another place where the company continues company (for example, a workplace), their home is not included in the definition of “facility”. Instead, the worker is thought about to have a connection to the workplace place and, for that reason, for the purpose of mass termination, the staff member is included with regard to that office location.

Example: where numerous locations are considered one “facility”

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 company from home and does not operate at the office.

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

Employer responsibilities in a mass termination

When a mass termination happens, the employer must complete and provide 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 delivery to the Director’s office, if the delivery can be validated.

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 staff members is not thought about to have been offered till the Form 1 is gotten by the Director; simply put, notice of mass termination is not reliable till the Director receives the Form 1.

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

– post a copy of the Form 1 supplied to the Director in the workplace where it will concern the attention of the impacted staff members.

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

The amount of notice staff members need to get in a mass termination is not based on the workers’ length of employment, but on the number of workers who have been terminated. A company needs to give:

– 8 weeks observe if the work of 50 to 199 employees is to be terminated

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

– 16 weeks see if the employment of 500 or more employees is to be terminated

Exception to the mass termination rules

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

– the variety of employees whose work is being ended represents not more than 10 per cent of the employees who have actually been employed for a minimum of three months at the establishment

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

Mass termination: resignation by an employee

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

Temporary work after termination date in notice

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

If an employee works beyond the 13-week duration after the date and then has their work ended, the worker will be entitled to a brand-new composed notification of termination as if the previous notification had actually never been provided. The worker’s duration of employment will then likewise 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 employment. This right is commonly discovered in cumulative agreements.

An employee who has recall rights and who is entitled to termination pay due to the fact that of a layoff of 35 weeks or more may pick to:

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

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

If a worker is entitled to both termination pay and discontinuance wage, they must make the exact same choice for both.

If an employee who is not represented by a trade union chooses to keep their recall rights or stops working to make a choice, 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 worker who is represented by a trade union chooses to keep their recall rights or fails to make an option, the company and the trade union should try to come to an arrangement to hold the termination pay (and severance pay, if any) in trust for the employee. If they can not come to a plan, and the trade union recommends the company and the Director of Employment Standards in writing that efforts have actually failed, the employer must send the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.

If a worker picks to quit their recall rights or if the recall rights expire, the cash that is kept in trust must be sent out to the worker.

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

Exemptions to observe of termination or termination pay

A lot of these exemptions are intricate. Please call the Employment Standards Information Centre, 1-800-531-5551, if you require more info. Please likewise describe the special rule tool.

The notice 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 insignificant and has actually not been excused by the employer. Note: “wilful” consists of when a worker meant the resulting effect or acted recklessly if they understood or need to have known the effects their conduct would have. Poor work conduct that is accidental or unintended is usually ruled out wilful;

– was hired for a particular length of time or up until the conclusion of a specific task. However, such a staff member will be entitled to observe of termination or termination pay if:- the employment ends before the term ends or the task is finished; or

– the term expires or the task is not finished more than 12 months after the employment started; or

– the employment continues for three months or employment more after the term expires or the task is completed;

See likewise: Employment Standards Self-Service Tool

Wrongful termination

Rights higher than ESA notice 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 common law that are higher than the rights to observe of termination (or termination pay) and discontinuance wage under the ESA. A worker might want to sue their previous company in court for “wrongful dismissal”. Employees ought to know that they can not take legal action against an employer for wrongful termination and submit a claim for termination pay or severance pay with the ministry for the same termination or severance of employment. A staff member needs to pick one or the other. Employees might wish to get legal suggestions concerning their rights.