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Termination Of Employment

A number of expressions are commonly utilized to explain scenarios when work is ended. These include “let go,” “discharged,” “dismissed,” “fired” and “completely laid off.”

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

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

– “constructively” dismisses a worker and the worker resigns, in action, within a sensible time;

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

Most of the times, when a company ends the employment of a staff member who has been continuously used for three months, the employer needs to provide the employee with either composed notice of termination, termination pay or a mix (as long as the notice and the number 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 provide a staff member a reason their employment is being ended. There are, nevertheless, some scenarios where a company can not end a staff member’s work even if the company is prepared to give correct composed notification or termination pay. For example, an employer can not end someone’s employment, or punish them in any other method, if any part of the reason for the termination of work is based on the staff member asking concerns about the ESA or exercising a right under the ESA, such as refusing to work in excess of the day-to-day or weekly hours of work optimums, or taking a leave of lack defined in the ESA. Please see the chapter on reprisals.

Receiving termination notification or pay in lieu

Certain workers are not entitled to notice of termination or termination pay under the ESA. Examples include: employees who are guilty of wilful misbehavior, disobedience, or wilful neglect of responsibility that is not insignificant and has actually not been condoned by the company. Other examples include building and construction staff members, employees on short-lived layoff, staff members who refuse an offer of affordable alternative employment and workers who have been employed less than three months.

There are a number of other exemptions to the termination of employment arrangements 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 completely different from any privileges a staff member might need to be paid discontinuance wage under the ESA.

Constructive dismissal

A might take place when a company makes a considerable change to a fundamental term or condition of an employee’s work without the employee’s real or implied authorization.

For instance, a staff member might be constructively dismissed if the company makes modifications to the employee’s terms of employment that result in a substantial reduction in income or a significant unfavorable change in such things as the worker’s work location, hours of work, authority, or position. Constructive dismissal may also include circumstances where a company bothers or abuses a worker, or a company gives a staff member a final notice to “give up or be fired” and the staff member resigns in reaction.

The staff member would need to resign in action to the modification within an affordable time period 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 termination, please contact the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

An employee is on short-term layoff when an employer cuts back or employment stops the worker’s work without ending their work (for example, laying somebody off at times when there is not enough work to do). The simple reality that the company does not specify 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 temporary, might lead to constructive termination if it is not allowed by the work contract.

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

A week of layoff does not consist of any week in which the staff member did not work for several days due to the fact that the worker was not able or readily available to work, underwent disciplinary suspension, or was not supplied with work since of a strike or lockout at their place of employment or somewhere else.

Employers are not required under the ESA to offer workers with a written notification of a short-term layoff, nor do they need to provide a reason for the lay-off. (They may, however, be needed to do these things under a cumulative agreement 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, but less than 35 weeks of layoff in any duration of 52 successive weeks, where:- the staff member continues to receive significant payments from the company;
or

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

– the employee receives extra unemployment advantages;
or

– the staff member would be entitled to get supplementary welfare but isn’t receiving them because they are employed elsewhere;
or

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

– the employer 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 company recalls an employee who is represented by a trade union within the time set out in an agreement between the union and the company.

If an employee is laid off for a period longer than a momentary layoff as set out above, the company is thought about to have actually terminated the staff member’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 an employee who has actually been utilized constantly for 3 months or more if either:

– the company has actually given the employee appropriate composed notification of termination and the notification period has expired

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

Written notice of termination

A worker is entitled to see of termination (or termination pay rather of notification) if they have been continuously used for at least 3 months. A person is considered “employed” not just while they are actively working, however also during at any time in which they are not working but the employment relationship still exists (for instance, time in which the staff member is off ill or on leave or on lay-off).

The quantity of notice to which a worker is entitled depends on their “duration of work”. An employee’s duration of work includes not only perpetuity while the worker is actively working however 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 temporary lay-off, employment the staff member’s work is deemed (or considered) to have actually 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 duration of work, although the staff member may still be utilized for purposes of the “constantly utilized for 3 months” qualification

– if two separate periods of work are separated by more than 13 weeks, only the most current period counts for functions of notification of termination

It is possible, in some scenarios, for an individual to have actually been “continually utilized” for 3 months or more and yet have a period of work of less than three months. In such situations, the staff member would be entitled to discover since an employee who has actually been continuously employed for at least three months is entitled to notice, and the minimum notification entitlement of one week uses to a staff member with a period of employment of any length less than one year.

The following chart specifies the quantity of notice needed:

Note: Special rules figure out the amount of notification needed in the case of mass terminations – where the employment of 50 or more employees is ended at a company’s establishment within a four-week period.

Requirements throughout the statutory notice duration

During the statutory notification period, an employer should:

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

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

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

Regular rate

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

Regular salaries

These are wages other than overtime pay, employment holiday pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and severance pay and specific legal entitlements.

Regular work week

For a staff member who generally works the same variety of hours each week, a routine work week is a week of that numerous hours, not consisting of overtime hours.

Some workers do not have a routine work week. That is, they do not work the same number of hours each week or they are paid on a basis besides time. For these staff members, the “regular salaries” for a “routine work week” is the typical quantity of the routine incomes made by the staff member in the weeks in which the worker worked during the duration of 12 weeks right away preceding the date the notice was offered.

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

If an employer supplies longer notice than is required, the statutory part of the notification period is the tail end of the duration that ends on the date of termination.

How to provide written notification

Most of the times, written notification of termination of employment must be dealt with to the staff member. It can be provided face to face or employment by mail, fax or email, as long as shipment can be verified.

There are unique guidelines for supplying notice of termination if a staff member has a contract of employment or a collective arrangement that offers seniority rights that enable a staff member who is to be laid off or whose employment is to be ended to displace (” bump”) other staff members.

Because case, the employer must publish a notice in the office (where it will be seen by the workers) setting out the names, seniority and task category of those workers the company means to end 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 posting, to a worker who is “bumped” by a worker named in the notice. However, this notice of termination should still satisfy the length requirements set out in the ESA.

There are also unique guidelines concerning how notification is supplied when there is a mass termination.

Termination pay

An employee who does not get the written notice required under the ESA should be provided termination pay in lieu of notification. Termination pay is a lump sum payment equal to the regular salaries for a regular work week that a worker would otherwise have been entitled to during the written notice period. A staff member earns vacation pay on their termination pay. Employers need to likewise continue to make whatever contributions would be needed to preserve the benefits the employee would have been entitled to had they continued to be employed through the notice period.

Example: Regular work week

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

Sarah worked 40 hours a week every week and was paid $20.00 an hour. She also got four per cent vacation pay. Because she worked for more than 3 years but less than 4 years, she is entitled to three weeks’ pay in lieu of notice.

Sarah’s routine earnings for a regular work week are determined:

$ 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 trip pay on her termination pay is calculated:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The employer must likewise make sure ongoing protection for any benefit or pension plans that used to her for 3 weeks.

Example: No regular 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 per cent holiday pay.

Gerry’s employer 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 immediately preceding the day his employment was terminated. 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 typical incomes weekly are determined:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for two weeks therefore these weeks are not included in the calculation of average profits) = $180.00 a week

His termination pay is computed:

$ 180.00 × 4 weeks = $720.00

Then his trip pay on his termination pay is determined:

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 must also guarantee continued coverage for any benefit or pension that applied to him for four weeks.

When to pay termination pay

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

Mass termination

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

Meaning of “facility”

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

– they lie within the same town, or

– an employee at one area has legal seniority rights that reach the other place, allowing the staff member to displace another staff member (likewise called “bumping rights”).

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

This will require that staff members who work solely from another location be considered for inclusion in the count when determining whether 50 or more staff members have actually been ended.

Note that where a worker performs work both from their home and from another place where the employer carries on organization (for example, an office), their home is not consisted of in the definition of “facility”. Instead, the staff member is thought about to have a connection to the office place and, for that reason, for the function of mass termination, the employee is included with respect to that workplace place.

Example: where several places are thought about one “facility”

ABC Company has an office and a storage facility located in London, ON. Sabrina resides in London and works for ABC Company exclusively remotely: she performs work for employment the company from home and does not work at the office.

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

Employer responsibilities in a mass termination

When a mass termination occurs, the company must finish and provide the Form 1 (Notice of termination of employment) to the Director of Employment Standards (Director) by:

– email to [email protected].

– fax to (416) 326-7061.

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

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

The workplace 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 actually been provided up until the Form 1 is gotten by the Director; to put it simply, notification of mass termination is not reliable until the Director receives the Form 1.

In addition to supplying workers with private notices of termination, the company must, on the first day of the notification duration:

– publish a copy of the Form 1 offered to the Director in the workplace where it will come to the attention of the affected employees.

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

The quantity of notification employees should get in a mass termination is not based on the staff members’ length of work, however on the variety of employees who have been terminated. An employer needs to offer:

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

– 12 weeks see if the work of 200 to 499 workers is to be terminated

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

Exception to the mass termination guidelines

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

– the number of workers whose employment is being ended represents not more than 10 percent of the workers who have been utilized for at least 3 months at the facility

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

Mass termination: resignation by an employee

A staff member who has gotten termination notice under the mass termination guidelines who wishes to resign before the termination date offered in the company’s notification must offer the company at least one week’s composed notification of resignation if the worker has actually been employed for less than two years. If the employment duration has actually been 2 years or more, the worker must provide at least two weeks’ written notification of resignation. However, the employee does not have to provide notice of resignation if the company constructively dismisses the worker or breaches a term of the agreement.

Temporary work after termination date in notification

An employer can provide work to a worker who has actually been notified of termination on a short-lived 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 supply any additional notification of termination to the employee 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 written notice of termination as if the previous notice had never ever been given. The staff member’s period of work will then also consist of the duration of temporary work.

Recall rights

A “recall right” is the right of a worker on a layoff to be recalled to work by their employer under a term or condition of employment. This right is frequently discovered in collective arrangements.

A staff member who has recall rights and who is entitled to termination pay since 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 discontinuance wage) at that time;
or

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

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

If a worker who is not represented by a trade union chooses to keep their recall rights or stops working to decide, the employer needs to send out the quantity of the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the money in trust.

If a worker who is represented by a trade union chooses to keep their recall rights or stops working to make an option, the employer 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 worker. If they can not pertain to an arrangement, and the trade union recommends the employer and the Director of Employment Standards in composing that efforts have stopped working, the employer should send out the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If a worker chooses to quit their recall rights or if the recall rights end, the money that is kept in trust should be sent out to the worker.

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

Exemptions to observe of termination or termination pay

A lot of these exemptions are complex. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you need more information. Please also describe 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 neglect of responsibility that is not trivial and has actually not been excused by the employer. Note: “wilful” consists of when an employee intended the resulting effect or acted recklessly if they understood or must have understood the effects their conduct would have. Poor work conduct that is unintentional or unintentional is generally ruled out wilful;

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

– the term ends or the job is not completed more than 12 months after the work began; or

– the employment continues for 3 months or more after the term ends or the job is completed;

See likewise: Employment Standards Self-Service Tool

Wrongful termination

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

The rules under the ESA about termination and severance of work are minimum requirements. Some staff members might have rights under the common law that are higher than the rights to notice of termination (or employment termination pay) and severance pay under the ESA. A worker might want to sue their previous employer in court for “wrongful dismissal”. Employees must know that they can not take legal action against an employer for wrongful dismissal and employment submit a claim for termination pay or severance pay with the ministry for the same termination or severance of work. A staff member should choose one or the other. Employees may wish to obtain legal suggestions worrying their rights.