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Termination Of Employment

A variety of expressions are commonly utilized to describe circumstances when employment is ended. These include “let go,” “discharged,” “dismissed,” “fired” and “permanently laid off.”

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

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

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

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

In many cases, when an employer ends the employment of a staff member who has been constantly employed for three months, the company must supply the staff member with either written notification of termination, termination pay or a mix (as long as the notification and the number of weeks of termination pay together equal the length of notice the employee is entitled to receive).

The ESA does not need a company to provide a worker a reason that their employment is being ended. There are, however, some circumstances where a company can not terminate a worker’s work even if the company is prepared to give correct composed notice or termination pay. For instance, a company can not end somebody’s work, or penalize them in any other way, if any part of the reason for the termination of employment is based on the employee asking concerns 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 maximums, or taking a leave of lack defined in the ESA. Please see the chapter on reprisals.

Getting approved for termination notice or pay in lieu

Certain employees are not entitled to see of termination or termination pay under the ESA. Examples consist of: workers who are guilty of wilful misconduct, disobedience, or wilful disregard of duty that is not unimportant and has not been excused by the employer. Other examples include building staff members, employees on momentary layoff, workers who decline an offer of reasonable alternative employment and workers who have been used less than 3 months.

There are a number of other exemptions to the termination of employment arrangements of the ESA. See “Exemptions to notice of termination or termination pay.” Please likewise describe the special guideline tool.

The termination-of-employment guidelines are totally separate from any privileges a worker may have to be paid discontinuance wage under the ESA.

Constructive termination

A useful dismissal might take place when an employer makes a significant change to an essential term or condition of a worker’s work without the staff member’s actual or implied authorization.

For instance, an employee might be constructively dismissed if the company makes changes to the employee’s conditions of work that result in a significant decrease in wage or a significant negative change in such things as the employee’s work area, hours of work, authority, or position. Constructive dismissal may also include circumstances where a company bugs or abuses an employee, or a company offers a worker a demand to “stop or be fired” and the employee resigns in reaction.

The worker would have to resign in action to the change within a reasonable duration of time in order for the company’s actions to be thought about a termination of work for functions of the ESA.

Constructive termination is a complex and tough subject. For more details on positive dismissal, please call the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A staff member is on momentary layoff when a company cuts down or stops the worker’s work without ending their work (for example, laying someone off sometimes when there is not adequate work to do). The simple fact that the company does not specify a recall date when laying the staff member off does not always mean that the lay-off is not short-lived. Note, nevertheless, that a lay-off, even if intended to be temporary, might result in constructive dismissal if it is not allowed 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 ordinarily make (or makes typically) in a week.

A week of layoff does not consist of any week in which the worker did not work for one or more days since the worker was unable or employment offered to work, went through disciplinary suspension, or was not provided with work because of a strike or lockout at their location of employment or elsewhere.

Employers are not needed under the ESA to supply workers with a written notice of a short-lived layoff, nor do they have to supply a factor for the lay-off. (They may, however, be needed to do these things under a collective arrangement or an employment agreement.)

Under the ESA, a “temporary layoff” can last:

1. not more than 13 weeks of layoff in any duration 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 get substantial payments from the employer;
or

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

– the worker gets additional unemployment benefits;
or

– the staff member would be entitled to get supplementary joblessness advantages but isn’t getting them due to the fact that they are used somewhere else;
or

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

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

If a worker is laid off for a duration longer than a momentary 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 notice of termination and termination pay

Under the ESA, a company can terminate the employment of a staff member who has been used constantly for 3 months or more if either:

– the company has actually provided the worker proper composed notification of termination and the notification period has actually ended

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

Written notice of termination

An employee is entitled to notice of termination (or termination pay instead of notification) if they have actually been constantly used for a minimum of three months. An individual is considered “utilized” not just while they are actively working, but also throughout at any time in which they are not working but the work relationship still exists (for instance, time in which the worker is off ill or on leave or on lay-off).

The quantity of notification to which a worker is entitled depends on their “period of employment”. An employee’s period of work consists of not only all time 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 short-lived lay-off, the employee’s employment is considered (or thought about) to have been ended on the very first day of the lay-off-any time after that does not count as part of the employee’s duration of employment, although the staff member might still be used for purposes of the “continuously used for 3 months” credentials

– if two separate periods of employment are separated by more than 13 weeks, only the most current duration counts for purposes of notification of termination

It is possible, in some situations, for a person to have been “constantly used” for three months or more and yet have a period of employment of less than three months. In such scenarios, the staff member would be entitled to discover because a staff member 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 duration of work of any length less than one year.

The following chart defines the amount of notice needed:

Note: Special guidelines determine the amount of notification required in the case of mass terminations – where the work of 50 or more employees is terminated at a company’s establishment within a four-week duration.

Requirements during the statutory notice period

During the statutory notice period, a company needs to:

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

– continue to make whatever contributions would be needed to keep the staff member’s benefits strategies; and

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

Regular rate

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

Regular incomes

These are wages other than overtime pay, getaway pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and discontinuance wage and particular legal entitlements.

Regular work week

For a worker who typically works the same variety of hours every week, a routine work week is a week of that lots of hours, not consisting of overtime hours.

Some employees do not have a routine work week. That is, they do not work the very same number of hours every week or they are paid on a basis aside from time. For these staff members, the “regular incomes” for a “regular work week” is the typical quantity of the regular incomes made by the employee in the weeks in which the employee worked throughout the period of 12 weeks right away preceding the date the notice was offered.

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

If a company supplies longer notice than is required, the statutory part of the notice period is the last part of the duration that ends on the date of termination.

How to offer written notification

For the most part, composed notice of termination of employment should be addressed to the worker. It can be offered in individual or by mail, fax or e-mail, as long as delivery can be verified.

There are special rules for supplying notification of termination if a worker has a contract of work or a collective contract that offers 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.

In that case, the company needs to publish a notification 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 notice is considered to be notification of termination, as of the date of the publishing, to a staff member who is “bumped” by a staff member called in the notice. However, this notice of termination should still meet the length requirements set out in the ESA.

There are also special rules concerning how notice is offered when there is a mass termination.

Termination pay

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

Example: Regular work week

Sarah has actually worked for three and a half years. Now her job has been gotten rid of and her employment has actually 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 received 4 percent holiday pay. Because she worked for more than 3 years but less than four years, she is entitled to 3 weeks’ pay in lieu of notification.

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

$ 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 holiday pay on her termination pay is determined:

4% of $2,400.00 = $96.00

Finally, her vacation pay is added to her termination pay:

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The company should also ensure continued protection for any advantage or pension plans that applied to her for 3 weeks.

Example: No routine work week

Gerry has actually operated at an assisted living home for four years. He works every week, 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 company eliminated his position and did not give Gerry any composed notice of termination. Gerry was ill and off work for two 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 four weeks of termination pay.

Gerry’s average earnings per week are determined:

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

His termination pay is computed:

$ 180.00 × 4 weeks = $720.00

Then his holiday pay on his termination pay is computed:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company needs to also guarantee continued protection 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 7 days after the worker’s work is terminated or on the staff member’s next routine pay date, whichever is later on.

Mass termination

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

Meaning of “establishment”

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

– they lie within the exact same town, or

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

Effective October 26, 2023, in cases of mass termination, the term “establishment” consists of a worker’s home, however only if the worker works from home and does not operate at any other place where the employer continues business.

This will need that employees who work specifically remotely be thought about for addition 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 area where the company continues company (for example, an office), their home is not included in the definition of “establishment”. Instead, the worker is thought about to have a connection to the office location and, for that reason, for the purpose of mass termination, the employee is included with respect to that office area.

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

ABC Company has a workplace and a storage facility situated in London, ON. Sabrina resides in London and works for ABC Company specifically from another location: she carries out work for the company from home and does not work at the workplace.

For the purpose of mass termination, the company’s London workplace, London warehouse and Sabrina’s London home are thought about one “facility.”

Employer obligations in a mass termination

When a mass termination takes place, the employer must complete and provide the Form 1 (Notice of termination of work) to the Director of Employment Standards (Director) by:

– email to [email protected].

– fax to (416) 326-7061.

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

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

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 affected employees is ruled out to have actually been given up until the Form 1 is gotten by the Director; simply put, notice of mass termination is ineffective until the Director receives the Form 1.

In addition to providing employees with specific notifications of termination, the company must, on the first day of the notification period:

– post a copy of the Form 1 supplied to the Director in the work environment where it will pertain to the attention of the affected employees.

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

The quantity of notice workers must get in a mass termination is not based upon the staff members’ length of employment, but on the variety of workers who have actually been ended. A company should offer:

– 8 weeks notice if the work of 50 to 199 staff members is to be ended

– 12 weeks observe if the employment of 200 to 499 workers is to be terminated

– 16 weeks notice if the work of 500 or more workers is to be terminated

Exception to the mass termination rules

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

– the number of staff members whose work is being ended represents not more than 10 percent of the staff members who have actually been used for a minimum of 3 months at the establishment

– none of the terminations are triggered by the permanent discontinuance of all or part of the company’s organization at the establishment

Mass termination: resignation by an employee

An employee who has gotten termination notice under the mass termination rules who wishes to resign before the termination date provided in the employer’s notification must offer the employer a minimum of one week’s written notification of resignation if the worker has been used for less than 2 years. If the employment duration has been 2 years or more, the staff member needs to offer a minimum of 2 weeks’ written notice of resignation. However, the staff member does not need to offer notification of resignation if the employer constructively dismisses the staff member or breaches a term of the agreement.

Temporary work after termination date in notice

An employer can supply work to a worker who has been offered notification of termination on a momentary basis in the 13-week duration after the termination date set out in the notification without affecting the initial date of the termination and without being needed to supply any more notice of termination to the staff member when the short-term work ends.

If a staff member works beyond the 13-week duration after the termination date and after that has their employment terminated, the staff member will be entitled to a new written notification of termination as if the previous notice had never ever been offered. The employee’s duration of employment will then likewise include the duration of temporary work.

Recall rights

A “recall right” is the right of an employee on a layoff to be recalled to work by their company under a term or condition of work. This right is commonly found in collective 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 select to:

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

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

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

If a staff member who is not represented by a trade union chooses to keep their recall rights or employment stops working to make a choice, the company should send the amount of the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If an employee who is represented by a trade union elects to keep their recall rights or stops working to make an option, the company and the trade union need to attempt to come to a plan to hold the termination pay (and discontinuance wage, if any) in trust for the employee. If they can not pertain to an arrangement, and the trade union advises the employer and the Director of Employment Standards in composing that efforts have actually failed, the company 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 give up their recall rights or if the recall rights end, the cash that is kept in trust must be sent out to the worker.

If the employee accepts a recall back to work, the cash that is held in trust will be returned to the company.

Exemptions to notice of termination or termination pay

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

The notification of termination and termination pay requirements of the ESA do not use to a worker who:

– is guilty of wilful misbehavior, disobedience or wilful overlook of responsibility that is not minor and has actually not been excused by the employer. Note: “wilful” consists of when a worker planned 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 unintended is usually not considered wilful;

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

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

– the work continues for 3 months or more after the term expires or the job is completed;

See likewise: Self-Service Tool

Wrongful dismissal

Rights greater than ESA notice 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 typical law that are higher than the rights to see of termination (or termination pay) and discontinuance wage under the ESA. An employee might desire to sue their previous employer in court for “wrongful dismissal”. Employees must be aware that they can not take legal action against an employer for wrongful termination and submit a claim for termination pay or discontinuance wage with the ministry for the same termination or severance of employment. An employee must pick one or the other. Employees might wish to get legal suggestions worrying their rights.