Termination Of Employment

A number of expressions are commonly used to describe situations when work is ended. These include « release, » « released, » « dismissed, » « fired » and « completely laid off. »

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

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

– « constructively » dismisses an employee and the staff member resigns, in action, within an affordable time;

– lays an employee off for a period that is longer than a « short-term layoff ».

For the most part, when a company ends the employment of an employee who has actually been constantly employed for three months, the company needs to supply the worker with either written notification of termination, termination pay or a combination (as long as the notification and the number of weeks of termination pay together equivalent the length of notification the worker is entitled to get).

The ESA does not need a company to provide an employee a reason their employment is being ended. There are, however, some scenarios where an employer can not end a staff member’s work even if the company is prepared to provide proper composed notification or termination pay. For instance, an employer can not end somebody’s employment, or punish them in any other way, if any part of the factor for the termination of work is based upon the employee asking questions about the ESA or exercising a right under the ESA, such as refusing to work in excess of the daily or weekly hours of work optimums, 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 workers are not entitled to notice of termination or employment termination pay under the ESA. Examples include: staff members who are guilty of wilful misbehavior, disobedience, or wilful overlook of duty that is not minor and has actually not been condoned by the employer. Other examples consist of building and construction employees, workers on short-lived layoff, staff members who decline an offer of sensible alternative work and employees who have been used less than three 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 likewise refer to the special guideline tool.

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

Constructive termination

A useful termination might occur when an employer makes a considerable change to a fundamental term or condition of a staff member’s employment without the worker’s actual or implied consent.

For instance, a staff member may be constructively dismissed if the employer makes modifications to the employee’s conditions of work that result in a considerable decrease in salary or a significant negative change in such things as the staff member’s work area, hours of work, authority, or position. Constructive termination may also consist of circumstances where a company harasses or abuses an employee, or an employer provides an employee a final notice to « quit or be fired » and the employee resigns in response.

The staff member would need to resign in action to the change within an affordable amount of time in order for the company’s actions to be thought about a termination of work for functions of the ESA.

Constructive dismissal is a complex and tough 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 an employer cuts back or stops the employee’s work without ending their employment (for instance, laying someone off at times when there is not adequate work to do). The mere fact that the employer does not specify a recall date when laying the staff member off does not always suggest that the lay-off is not momentary. Note, however, that a lay-off, even if meant to be temporary, may lead to useful termination if it is not permitted by the employment agreement.

For the functions of the termination arrangements of the ESA, a « week of layoff » is a week in which the employee made less than half of what they would ordinarily earn (or earns usually) in a week.

A week of layoff does not include any week in which the staff member did not work for several days due to the fact that the worker was not able or offered to work, went through disciplinary suspension, or was not supplied with work because of a strike or lockout at their place of work or somewhere else.

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

Under the ESA, a « short-term 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 period of 52 successive weeks, where:- the worker continues to receive considerable payments from the employer;
or

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

– the employee receives supplementary unemployment benefits;
or

– the staff member would be entitled to get supplementary welfare but isn’t getting them since they are used in other places;
or

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

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

3. a layoff longer than a layoff described in ‘B’ where the employer recalls 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 staff member is laid off for a period longer than a short-term layoff as set out above, the company is considered to have ended the employee’s work. Generally, the worker will then be entitled to termination pay.

Written notification of termination and termination pay

Under the ESA, an employer can terminate the employment of a staff member who has actually been utilized constantly for 3 months or more if either:

– the employer has provided the employee correct composed notification of termination and the notice period has actually expired

– the company pays termination pay to the staff member where no written notification or less notice than is required is provided

Written notice of termination

A staff member is entitled to notice of termination (or termination pay instead of notification) if they have actually been continuously employed for employment a minimum of 3 months. A person is considered « used » not only while they are actively working, but also throughout whenever in which they are not working but the employment relationship still exists (for example, time in which the staff member is off ill or on leave or on lay-off).

The amount of notification to which a staff member is entitled depends on their « period of employment ». An employee’s period of work consists of not just perpetuity while the worker is actively working however also whenever that they are not working however the employment relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a temporary lay-off, the worker’s work is deemed (or considered) to have been terminated on the very first day of the lay-off-any time after that does not count as part of the employee’s period of employment, although the staff member might still be utilized for purposes of the « constantly utilized for 3 months » credentials

– if two different durations of work are separated by more than 13 weeks, only the most current duration counts for functions of notice of termination

It is possible, in some situations, for a person to have been « continually utilized » for three months or more and yet have a period of employment of less than 3 months. In such circumstances, the staff member would be entitled to notice due to the fact that a worker who has been continually employed for at least three months is entitled to see, and the minimum notification privilege of one week applies to an employee with a period of work of any length less than one year.

The following chart defines the quantity of notification required:

Note: Special rules determine the amount of notification required in the case of mass terminations – where the employment of 50 or more staff members is terminated at a company’s establishment within a four-week period.

Requirements during the statutory notice period

During the statutory notification duration, an employer should:

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

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

– pay the employee 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 spend for each non-overtime hour of operate in the staff member’s work week.

Regular incomes

These are earnings other than overtime pay, holiday pay, public holiday pay, premium pay, domestic or employment sexual violence leave pay, termination of assignment pay, termination pay and severance pay and particular legal entitlements.

Regular work week

For a staff member who typically works the same variety of hours weekly, a regular work week is a week of that many hours, not consisting of overtime hours.

Some workers do not have a regular work week. That is, they do not work the exact same number of hours every week or they are paid on a basis other than time. For these staff members, the « regular earnings » for a « routine work week » is the average quantity of the regular salaries made by the employee in the weeks in which the staff member worked during the duration of 12 weeks immediately preceding the date the notice was provided.

A company is not permitted to arrange a staff member’s getaway time throughout the statutory notice duration unless the employee-after receiving composed notice of termination of employment-agrees to take their trip time during the notification period.

If an employer offers longer notice than is needed, the statutory part of the notice period is the last part of the period that ends on the date of termination.

How to provide written notification

Most of the times, composed notice of termination of employment must be addressed to the worker. It can be supplied face to face or by mail, fax or e-mail, as long as shipment can be confirmed.

There are unique guidelines for supplying notification of termination if an employee has a contract of employment or a cumulative arrangement that provides seniority rights that permit a worker who is to be laid off or whose employment is to be terminated to displace ( » bump ») other staff members.

Because case, the company must post a notification in the workplace (where it will be seen by the employees) setting out the names, seniority and task category of those employees the employer means to end and the date of the proposed termination. The posting of the notice is considered to be notification of termination, as of the date of the publishing, to a worker who is « bumped » by an employee called in the notification. However, this notification of termination should still meet the length requirements set out in the ESA.

There are likewise special guidelines relating to how notice is offered when there is a mass termination.

Termination pay

A worker who does not receive the composed notification needed under the ESA must be given termination pay in lieu of notice. Termination pay is a swelling sum payment equal to the routine earnings for a regular work week that an employee would otherwise have actually been entitled to during the composed notification period. A staff member makes getaway pay on their termination pay. Employers need to likewise continue to make whatever contributions would be needed to maintain the benefits the staff member would have been entitled to had they continued to be used through the notice period.

Example: Regular work week

Sarah has worked for 3 and a half years. Now her job has been removed and her employment has been terminated. Sarah was not offered any written notification of termination.

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

Sarah’s regular salaries for a regular work week are calculated:

$ 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 vacation 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 should likewise make sure ongoing protection for any advantage or pension plans that applied to her for 3 weeks.

Example: No regular work week

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

Gerry’s company removed his position and did not offer 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 ended. Gerry made $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 incomes weekly are determined:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for 2 weeks for that reason these weeks are not included in the estimation of typical profits) = $180.00 a week

His termination pay is determined:

$ 180.00 × 4 weeks = $720.00

Then his vacation 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 company needs to likewise make sure continued coverage for any benefit or pension plans that to him for 4 weeks.

When to pay termination pay

Termination pay should be paid to a staff member either seven days after the employee’s work is terminated or on the employee’s next routine pay date, whichever is later on.

Mass termination

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

Meaning of « establishment »

An « facility » is a place at which the employer carries on organization. Separate locations can be thought about one facility if either:

– they lie within the same municipality, or

– a worker at one area has contractual seniority rights that extend to the other location, allowing the employee to displace another staff member (likewise called « bumping rights »).

Effective October 26, 2023, in cases of mass termination, the term « establishment » consists of an employee’s home, but only if the staff member works from home and does not operate at any other area where the company brings on organization.

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

Note that where a worker carries out work both from their home and from another place where the employer brings on business (for instance, a workplace), their home is not included in the meaning of « facility ». Instead, the worker is thought about to have a connection to the office place and, therefore, for the purpose of mass termination, the staff member is included with regard to that office area.

Example: where several locations are thought about one « establishment »

ABC Company has a workplace and a warehouse located in London, ON. Sabrina resides in London and works for ABC Company exclusively remotely: she carries out work for the business from home and does not operate at the office.

For the purpose of mass termination, the company’s London workplace, London storage facility and Sabrina’s London home are considered one « establishment. »

Employer obligations in a mass termination

When a mass termination happens, the employer should finish 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.

– 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 delivery can be confirmed.

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

Any notification to the impacted workers is not considered to have been offered till the Form 1 is received by the Director; to put it simply, notification of mass termination is ineffective till the Director gets the Form 1.

In addition to offering workers with individual notices of termination, employment the employer must, on the first day of the notification period:

– post a copy of the Form 1 offered to the Director in the workplace where it will pertain to the attention of the impacted employees.

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

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

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

– 12 weeks discover if the employment of 200 to 499 workers is to be ended

– 16 weeks observe if the work of 500 or more employees is to be terminated

Exception to the mass termination rules

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

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

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

Mass termination: resignation by a worker

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

Temporary work after termination date in notification

A company can provide work to a staff member who has actually been given notification of termination on a momentary basis in the 13-week period after the termination date set out in the notification without affecting the original date of the termination and without being needed to offer any additional notification of termination to the worker when the temporary work ends.

If a worker works beyond the 13-week duration after the termination date and then has their employment terminated, the employee will be entitled to a brand-new written notice of termination as if the previous notice had never been offered. The staff member’s period of work will then likewise consist of the period of short-lived work.

Recall rights

A « recall right » is the right of an employee on a layoff to be recalled to work by their employer under a term or condition of employment. This right is typically discovered in cumulative contracts.

A staff member who has recall rights and who is entitled to termination pay because of a layoff of 35 weeks or more may select 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

– offer up their recall rights and receive termination pay (and discontinuance wage, 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 both.

If an employee who is not represented by a trade union chooses to keep their recall rights or fails to make an option, the company must send the amount of the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the money in trust.

If a staff member who is represented by a trade union elects to keep their recall rights or stops working to choose, the employer and the trade union need to 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 concern a plan, and the trade union encourages the employer and the Director of Employment Standards in writing that efforts have actually failed, the company should send out the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the money in trust.

If a worker chooses to quit their recall rights or if the recall rights end, the money that is held in trust needs to be sent to the employee.

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

Exemptions to discover of termination or termination pay

Many of these exemptions are intricate. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you need more information. Please likewise refer to the special rule tool.

The notification of termination and termination pay requirements of the ESA do not apply to an employee who:

– is guilty of wilful misbehavior, disobedience or wilful overlook of responsibility that is not trivial and has actually not been excused by the company. Note: « wilful » includes when a staff member meant the resulting consequence or acted recklessly if they knew or ought to have understood the impacts their conduct would have. Poor work conduct that is unintentional or unintentional is typically not considered wilful;

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

– the term ends or the task is not finished more than 12 months after the employment began; or

– the work continues for three months or more after the term expires or the job 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 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 severance pay under the ESA. An employee may wish to sue their former company in court for « wrongful dismissal ». Employees ought to understand that they can not take legal action against a company for wrongful termination and sue for termination pay or discontinuance wage with the ministry for the same termination or severance of work. A staff member should choose one or the other. Employees may wish to get legal suggestions concerning their rights.