Termination Of Employment
A number of expressions are frequently used to explain situations when work is terminated. These consist of « let go, » « 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 utilizing a worker, consisting of where an employee is no longer utilized due to the insolvency or insolvency of the employer;
– « constructively » dismisses a staff member and the staff member resigns, in reaction, within a sensible time;
– lays a staff member off for a duration that is longer than a « temporary layoff ».
In many cases, when an employer ends the employment of a worker who has been continuously utilized for 3 months, the company must offer the worker with either written notice of termination, termination pay or a combination (as long as the notification and the variety of weeks of termination pay together equivalent the length of notification the employee is entitled to receive).
The ESA does not need an employer to give a worker a reason that their employment is being terminated. There are, however, some circumstances where an employer can not end a staff member’s employment even if the employer is prepared to offer proper written notice or termination pay. For instance, an employer can not end someone’s work, or penalize them in any other way, if any part of the factor for the termination of employment is based on the employee asking questions about the ESA or exercising 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 lack defined in the ESA. Please see the chapter on reprisals.
Qualifying for termination notice or pay in lieu
Certain employees are not entitled to see of termination or termination pay under the ESA. Examples include: staff members who are guilty of wilful misbehavior, disobedience, or wilful overlook of task that is not minor and has actually not been condoned by the company. Other examples include building workers, staff members on short-lived layoff, staff members who refuse an offer of reasonable alternative work and workers who have actually been used less than 3 months.
There are a variety of other exemptions to the termination of work arrangements of the ESA. See « Exemptions to observe of termination or termination pay. » Please also refer to the special guideline tool.
The termination-of-employment guidelines are entirely different from any entitlements a staff member may need to be paid severance pay under the ESA.
Constructive dismissal
A useful termination may occur when an employer makes a significant change to a fundamental term or condition of an employee’s work without the worker’s real or implied authorization.
For instance, a worker may be constructively dismissed if the employer makes modifications to the staff member’s conditions of work that lead to a substantial decrease in salary or a substantial unfavorable modification in such things as the worker’s work place, hours of work, authority, or position. Constructive termination may likewise consist of circumstances where an employer bugs or abuses a staff member, or a company gives a staff member a demand to « quit or be fired » and the employee resigns in reaction.
The employee would need to resign in reaction to the modification within a reasonable time period in order for the employer’s actions to be thought about a termination of employment for purposes of the ESA.
Constructive dismissal is a complex and challenging subject. To learn more on useful termination, please call the Employment Standards Information Centre at 1-800-531-5551.
Temporary layoff
An employee is on momentary layoff when a company cuts down or stops the staff member’s work without ending their work (for example, laying somebody off sometimes when there is insufficient work to do). The mere fact that the employer does not define a recall date when laying the staff member off does not always imply that the lay-off is not temporary. Note, nevertheless, that a lay-off, even if to be short-term, might lead to constructive termination if it is not enabled by the work contract.
For the functions of the termination arrangements of the ESA, a « week of layoff » is a week in which the worker earned less than half of what they would ordinarily earn (or makes typically) 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 unable or readily available to work, was subject to disciplinary suspension, or was not offered with work due to the fact that of a strike or lockout at their place of work or in other places.
Employers are not required under the ESA to offer staff members with a composed notice of a short-term layoff, nor do they need to supply a reason for the lay-off. (They may, nevertheless, be required to do these things under a collective agreement or an employment contract.)
Under the ESA, a « temporary layoff » can last:
1. not more than 13 weeks of layoff in any duration of 20 successive weeks;
or
2. more than 13 weeks in any duration of 20 successive weeks, however less than 35 weeks of layoff in any period of 52 consecutive weeks, where:- the employee continues to get significant payments from the employer;
or
– the employer continues to make payments for the benefit of the worker under a legitimate group or staff member insurance strategy (such as a medical or drug insurance coverage strategy) or a legitimate retirement or pension strategy;
or
– the staff member receives supplemental welfare;
or
– the employee would be entitled to get extra joblessness advantages but isn’t getting them because they are utilized somewhere else;
or
– the company remembers the employee to work within the time frame approved by the Director of Employment Standards;
or
– the employer remembers the employee within the time frame set out in an arrangement 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 remembers a staff member who is represented by a trade union within the time set out in an agreement 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, employment the employer is thought about to have ended the employee’s work. Generally, the employee will then be entitled to termination pay.
Written notice of termination and termination pay
Under the ESA, a company can end the work of a staff member who has actually been utilized continuously for 3 months or more if either:
– the company has actually offered the worker correct composed notification of termination and the notice duration has actually expired
– the company pays termination pay to the staff member where no composed notice or less notice than is required is provided
Written notification of termination
An employee is entitled to notice of termination (or termination pay rather of notice) if they have actually been continually employed for at least 3 months. An individual is considered « used » not just while they are actively working, however likewise during whenever in which they are not working but the employment relationship still exists (for instance, time in which the staff member is off sick or on leave or on lay-off).
The quantity of notice to which a staff member is entitled depends on their « duration of work ». A staff member’s period of employment consists of not only perpetuity while the staff member is actively working but also 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-lived lay-off, the worker’s employment is considered (or considered) 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 duration of employment, although the worker may still be employed for functions of the « continually employed for three months » qualification
– if two separate durations of employment are separated by more than 13 weeks, only the most recent duration counts for purposes of notification of termination
It is possible, in some situations, for an individual to have been « constantly used » for three months or more and yet have a duration of work of less than 3 months. In such scenarios, the worker would be entitled to discover because a worker who has actually been continually utilized for at least three months is entitled to discover, employment and the minimum notification entitlement of one week uses to an employee with a period of employment of any length less than one year.
The following chart specifies the quantity of notification needed:
Note: Special guidelines figure out the quantity of notification needed in the case of mass terminations – where the work of 50 or more workers is ended at an employer’s facility within a four-week period.
Requirements during the statutory notification period
During the statutory notification duration, an employer must:
– not reduce the worker’s wage rate or change any other term or employment condition of work;
– continue to make whatever contributions would be required to maintain the employee’s advantages strategies; and
– pay the employee the wages they are entitled to, which can not be less than the staff member’s routine incomes for a regular work week every week.
Regular rate
This is an employee’s rate of pay for each non-overtime hour of operate in the employee’s work week.
Regular salaries
These are wages other than overtime pay, holiday pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of task pay, termination pay and severance pay and certain contractual entitlements.
Regular work week
For an employee who typically works the exact same number of hours each 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 exact same number of hours weekly or they are paid on a basis aside from time. For these workers, the « regular incomes » for a « routine work week » is the average amount of the routine salaries earned by the employee in the weeks in which the worker worked during the duration of 12 weeks instantly preceding the date the notification was offered.
A company is not enabled to set up an employee’s holiday time throughout the statutory notice duration unless the employee-after getting written notification of termination of employment-agrees to take their trip time throughout the notice period.
If an employer offers longer notice than is needed, the statutory part of the notice duration is the tail end of the period that ends on the date of termination.
How to offer written notice
Most of the times, composed notification of termination of employment need to be resolved to the employee. It can be offered personally or by mail, fax or e-mail, as long as delivery can be confirmed.
There are special guidelines for providing notice of termination if an employee has a contract of work or a cumulative arrangement that supplies seniority rights that allow an employee who is to be laid off or whose work is to be terminated to displace ( » bump ») other staff members.
Because case, the employer needs to post a notice in the office (where it will be seen by the employees) setting out the names, seniority and task category of those employees the company plans to terminate and the date of the proposed termination. The posting of the notification is considered to be notice of termination, since the date of the posting, to an employee who is « bumped » by a worker called in the notification. However, this notification of termination must still meet the length requirements set out in the ESA.
There are likewise unique guidelines regarding how notice is provided when there is a mass termination.
Termination pay
A staff member who does not get the written notification required under the ESA should be given termination pay in lieu of notification. Termination pay is a swelling amount payment equivalent to the regular incomes for a routine work week that a worker would otherwise have actually been entitled to during the composed notice duration. An employee makes holiday pay on their termination pay. Employers should also continue to make whatever contributions would be needed to keep the advantages the staff member would have been entitled to had they continued to be used through the notice duration.
Example: Regular work week
Sarah has worked for 3 and a half years. Now her job has been removed and her work has actually been ended. Sarah was not provided any written notice of termination.
Sarah worked 40 hours a week each week and was paid $20.00 an hour. She likewise received four per cent holiday pay. Because she worked for more than three years but less than four years, she is entitled to three weeks’ pay in lieu of notification.
Sarah’s routine salaries for a routine work week are computed:
$ 20.00 an hour X 40 hours a week = $800.00 a week
Her termination pay is determined:
$ 800.00 X 3 weeks = $2,400.00
Then her getaway pay on her termination pay is computed:
4% of $2,400.00 = $96.00
Finally, her getaway pay is included to her termination pay:
$ 2400.00 + $96.00 = $2,496.00
Result: Sarah is entitled to $2,496.00. The company needs to also guarantee ongoing coverage for any advantage or pension strategies that applied to her for three weeks.
Example: No regular work week
Gerry has actually worked at a retirement home for 4 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 vacation pay.
Gerry’s employer removed his position and did not provide Gerry any written notice of termination. Gerry was ill and off work for 2 of the 12 weeks instantly preceding the day his employment 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 typical earnings each week are computed:
$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for 2 weeks for that reason these weeks are not consisted of in the estimation of average profits) = $180.00 a week
His termination pay is determined:
$ 180.00 × 4 weeks = $720.00
Then his getaway pay on his termination pay is computed:
6% of $720.00 = $43.20
Finally, his getaway pay is contributed 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 benefit or pension strategies that applied to him for 4 weeks.
When to pay termination pay
Termination pay need to be paid to a staff member either seven days after the staff member’s work is terminated or on the worker’s next routine pay date, whichever is later on.
Mass termination
Special guidelines for notice of termination may use in cases of mass termination (when an employer is ending 50 or more staff members at its facility within a four-week period).
Meaning of « establishment »
An « establishment » is a place at which the company brings on service. Separate places can be thought about one establishment if either:
– they are situated within the same municipality, or
– a staff member at one location has legal seniority rights that reach the other location, permitting the worker to displace another worker (likewise called « bumping rights »).
Effective October 26, 2023, in cases of mass termination, the term « facility » includes an employee’s home, however just if the employee works from home and does not operate at any other area where the company continues business.
This will require that employees who work exclusively from another location be considered for addition in the count when determining whether 50 or more staff members have been terminated.
Note that where an employee performs work both from their home and from another location where the employer continues service (for example, an office), their home is not consisted of in the meaning of « facility ». Instead, the worker is considered to have a connection to the office place and, for that reason, for the purpose of mass termination, the staff member is consisted of with respect to that office area.
Example: where several locations are considered one « establishment »
ABC Company has an office and a storage facility located in London, ON. Sabrina lives in London and works for ABC Company solely remotely: she performs work for the business from home and does not work at the workplace.
For the function of mass termination, the company’s London workplace, London storage facility and Sabrina’s London home are considered one « facility. »
Employer obligations in a mass termination
When a mass termination happens, the company 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 shipment to the Director’s office, if the delivery can be confirmed.
The workplace of the Director of Employment Standards is located on the 9th floor, 400 University Avenue, Toronto ON M7A 1T7.
Any notification to the impacted staff members is ruled out to have actually been given till the Form 1 is gotten by the Director; simply put, notification of mass termination is not reliable until the Director receives the Form 1.
In addition to supplying employees with specific notices of termination, the employer must, on the very first day of the notification period:
– post a copy of the Form 1 offered to the Director in the work environment where it will concern the attention of the affected employees.
– offer a copy of the Form 1 to each affected staff member.
The amount of notification employees must receive in a mass termination is not based upon the staff members’ length of employment, however on the number of workers who have been ended. An employer needs to give:
– 8 weeks notice if the employment of 50 to 199 workers is to be terminated
– 12 weeks see if the employment of 200 to 499 staff members is to be terminated
– 16 weeks discover if the employment of 500 or more workers is to be ended
Exception to the mass termination rules
The mass termination rules do not use if these two things apply:
– the variety of employees whose work is being ended represents not more than 10 per cent of the employees who have been used for a minimum of 3 months at the facility
– none of the terminations are triggered by the permanent discontinuance of all or part of the employer’s business at the establishment
Mass termination: resignation by a staff member
An employee who has received termination notification under the mass termination rules who wishes to resign before the termination date supplied in the company’s notification need to give the employer a minimum of one week’s composed notice of resignation if the staff member has been utilized for less than two years. If the work duration has actually been 2 years or more, the staff member must provide at least two weeks’ written notification of resignation. However, the worker does not have to notify of resignation if the company constructively dismisses the worker or breaches a regard to the agreement.
Temporary work after termination date in notification
An employer can supply work to a worker who has actually been notified 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 additional notice of termination to the worker when the momentary work ends.
If an employee works beyond the 13-week duration after the termination date and then has their employment ended, the staff member will be entitled to a brand-new written notice of termination as if the previous notice had actually never been provided. The worker’s duration of work will then likewise consist of the period of momentary work.
Recall rights
A « recall right » is the right of a worker on a layoff to be recalled to work by their company under a term or condition of employment. This right is frequently discovered in cumulative agreements.
A staff member 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
– provide up their recall rights and receive termination pay (and severance pay, if they were entitled to discontinuance wage).
If a worker is entitled to both termination pay and discontinuance wage, they must make the very same option for both.
If a worker who is not represented by a trade union elects to keep their recall rights or fails to decide, the company needs to send out the amount of the termination pay (and severance pay, 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 stops working to make an option, employment the company and the trade union need to try to come to a plan to hold the termination pay (and severance pay, if any) in trust for the employee. If they can not come to an arrangement, and the trade union encourages the company and the Director of Employment Standards in writing that efforts have failed, the employer needs to send the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the money in trust.
If a staff member chooses to quit their recall rights or if the recall rights end, the cash that is kept in trust must be sent to the employee.
If the worker accepts a recall back to work, the money that is kept in trust will be returned to the employer.
Exemptions to discover of termination or termination pay
A number of these exemptions are intricate. Please call the Employment Standards Information Centre, 1-800-531-5551, if you require more information. Please also refer to the special rule tool.
The notice of termination and termination pay requirements of the ESA do not apply to an employee who:
– is guilty of wilful misconduct, disobedience or wilful neglect of task that is not trivial and has not been excused by the employer. Note: « wilful » consists of when an employee meant the resulting repercussion or acted recklessly if they understood or must have known the results their conduct would have. Poor work conduct that is unintentional or unintended is typically ruled out wilful;
– was worked with for a particular length of time or till the conclusion of a specific job. However, such a staff member will be entitled to notice of termination or termination pay if:- the work ends before the term ends or the task is finished; or
– the term expires or the job is not finished more than 12 months after the employment started; or
– the work continues for 3 months or more after the term expires or the task is finished;
See also: Employment Standards Self-Service Tool
Wrongful termination
Rights greater than ESA notification of termination, termination pay, discontinuance wage
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 greater than the rights to discover of termination (or termination pay) and severance pay under the ESA. A staff member may wish to sue their former company in court for « wrongful termination ». Employees need to understand that they can not sue an employer for wrongful dismissal and submit a claim for termination pay or discontinuance wage with the ministry for the very same termination or severance of employment. A staff member should pick one or the other. Employees might wish to get legal advice worrying their rights.
