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Termination Of Employment

A number of expressions are commonly used to describe scenarios when employment is ended. These consist of “let go,” “released,” “dismissed,” “fired” and “completely laid off.”

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

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

– “constructively” dismisses an employee and the worker resigns, in response, within a reasonable time;

– lays a staff member off for a period that is longer than a “temporary layoff”.

Most of the times, when a company ends the employment of a worker who has actually been continuously employed for 3 months, the company must provide the worker with either written notification of termination, termination pay or a mix (as long as the notice and the variety of weeks of termination pay together equivalent the length of notice the staff member is entitled to receive).

The ESA does not require a company to give a staff member a reason why their employment is being terminated. There are, however, some situations where an employer can not end a staff member’s employment even if the employer is prepared to provide proper composed notice or termination pay. For instance, a company can not end someone’s employment, or penalize them in any other method, if any part of the reason for the termination of employment is based upon the worker asking concerns about the ESA or working out a right under the ESA, such as declining to work in excess of the everyday or weekly hours of work maximums, or taking a leave of absence defined in the ESA. Please see the chapter on reprisals.

Qualifying for termination notification or pay in lieu

Certain staff members are not entitled to notice of termination or termination pay under the ESA. Examples consist of: staff members who are guilty of wilful misconduct, disobedience, or wilful disregard of responsibility that is not unimportant and has actually not been excused by the company. Other examples consist of construction workers, workers on momentary layoff, workers who decline a deal of affordable alternative work and workers who have been employed less than 3 months.

There are a number of other exemptions to the termination of employment arrangements of the ESA. See “Exemptions to see of termination or termination pay.” Please also refer to the unique rule tool.

The termination-of-employment guidelines are completely different from any entitlements a worker may need to be paid severance pay under the ESA.

Constructive termination

A constructive termination might take place when a company makes a considerable modification to a basic term or condition of an employee’s work without the staff member’s actual or implied consent.

For example, an employee may be constructively dismissed if the employer makes modifications to the staff member’s terms and conditions of employment that lead to a significant decrease in salary or a considerable unfavorable change in such things as the employee’s work place, hours of work, authority, or position. Constructive dismissal may also consist of situations where a company bugs or abuses an employee, or a company gives a staff member a demand to “quit or be fired” and the employee resigns in response.

The staff member would have to resign in reaction to the modification within a reasonable amount of time in order for the employer’s actions to be considered a termination of work for purposes of the ESA.

Constructive termination is a complex and challenging topic. To learn more on useful termination, please get in touch with the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A worker is on momentary layoff when an employer cuts back or stops the worker’s work without ending their work (for example, laying someone off sometimes when there is insufficient work to do). The mere fact that the employer does not define a recall date when laying the worker off does not necessarily suggest that the lay-off is not momentary. Note, however, that a lay-off, even if intended to be short-term, may result in useful dismissal if it is not permitted by the employment agreement.

For the purposes of the termination arrangements of the ESA, a “week of layoff” is a week in which the staff member earned less than half of what they would generally make (or earns usually) 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 because the employee was not able or readily available to work, underwent disciplinary suspension, or was not offered with work due to the fact that of a strike or lockout at their location of employment or somewhere else.

Employers are not required under the ESA to offer workers with a composed notice of a short-lived 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 agreement or a work contract.)

Under the ESA, a “short-lived 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 period of 20 successive weeks, but less than 35 weeks of layoff in any duration of 52 consecutive weeks, where:- the worker continues to receive considerable payments from the company;
or

– the employer continues to pay for the benefit of the worker under a legitimate group or employee insurance plan (such as a medical or drug insurance plan) or a genuine retirement or pension;
or

– the employee gets additional unemployment advantages;
or

– the employee would be entitled to receive supplemental unemployment benefits however isn’t getting them since they are utilized elsewhere;
or

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

– the company recalls the staff member within the time frame set out in a contract with a worker who is not represented by a trade union;
or

3. a layoff longer than a layoff described in ‘B’ where the company remembers an employee who is represented by a trade union within the time set out in an arrangement between the union and the employer.

If a worker is laid off for a duration longer than a short-term layoff as set out above, the employer is thought about to have actually terminated the staff member’s work. Generally, the worker will then be entitled to termination pay.

Written notification of termination and termination pay

Under the ESA, a company can end the work of an employee who has been utilized continually for 3 months or more if either:

– the employer has given the staff member correct composed notice of termination and the notice period has actually ended

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

Written notice of termination

A worker is entitled to notice of termination (or termination pay rather of notification) if they have been continually utilized for a minimum of 3 months. A person is considered “employed” not only while they are actively working, however likewise during whenever in which they are not working but the employment relationship still exists (for example, time in which the staff member is off sick or on leave or on lay-off).

The quantity of notification to which an employee is entitled depends upon their “duration of employment”. A worker’s period of work consists of not only perpetuity while the worker is actively working but likewise 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 momentary lay-off, the employee’s employment is deemed (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 period of employment, even though the worker may still be used for functions of the “constantly utilized for 3 months” credentials

– if two different periods of work are separated by more than 13 weeks, just the most recent period counts for functions of notification of termination

It is possible, in some scenarios, for an individual to have been “constantly utilized” for three months or more and yet have a period of employment of less than 3 months. In such scenarios, the worker would be entitled to observe since an employee who has actually been constantly used for a minimum of three months is entitled to see, and the minimum notification entitlement of one week uses to a worker with a period of work of any length less than one year.

The following chart specifies the amount of notice required:

Note: Special guidelines figure out the amount of notification needed when it comes to mass terminations – where the work of 50 or more workers is terminated at a company’s establishment within a four-week duration.

Requirements during the statutory notice duration

During the statutory notice duration, an employer needs to:

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

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

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

Regular rate

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

Regular salaries

These are wages besides overtime pay, trip pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and severance pay and certain legal privileges.

Regular work week

For a worker who generally works the very same variety of hours every week, a routine work week is a week of that numerous hours, not including overtime hours.

Some employees do not have a regular work week. That is, they do not work the very same variety of hours each week or they are paid on a basis other than time. For these employees, the “routine salaries” for a “regular work week” is the average amount of the regular salaries made by the employee in the weeks in which the staff member worked during the period of 12 weeks right away preceding the date the notice was given.

A company is not permitted to arrange an employee’s vacation time throughout the statutory notification duration unless the employee-after getting composed notice of termination of employment-agrees to take their vacation time throughout the notice duration.

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

How to offer written notification

In many cases, composed notification of termination of work must be dealt with to the staff member. It can be offered face to face or by mail, fax or e-mail, as long as shipment can be validated.

There are special rules for offering notice of termination if a staff member has a contract of employment or a collective agreement that supplies seniority rights that allow a staff member who is to be laid off or whose work is to be terminated to displace (” bump”) other employees.

Because case, the employer should publish a notification in the work environment (where it will be seen by the staff members) setting out the names, seniority and job category of those employees the company means to end and the date of the proposed termination. The publishing of the notice is thought about to be notification of termination, as of the date of the posting, to an employee who is “bumped” by an employee called in the notification. However, this notification of termination need to still fulfill the length requirements set out in the ESA.

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

Termination pay

An employee who does not receive the written notice required under the ESA must be provided termination pay in lieu of notification. Termination pay is a lump amount payment equal to the regular incomes for a routine work week that a staff member would otherwise have been entitled to during the written notification duration. An employee makes trip pay on their termination pay. Employers need to also continue to make whatever contributions would be needed to maintain the benefits the employee would have been entitled to had they continued to be employed through the notification period.

Example: Regular work week

Sarah has actually worked for 3 and a half years. Now her task has been removed and her work has actually been terminated. Sarah was not offered any composed notice of termination.

Sarah worked 40 hours a week each week and was paid $20.00 an hour. She also got four per cent vacation pay. Because she worked for more than 3 years however 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 computed:

$ 20.00 an hour X 40 hours a week = $800.00 a week

Her termination pay is computed:

$ 800.00 X 3 weeks = $2,400.00

Then her trip pay on her termination pay is calculated:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The company needs to also make sure continued coverage for any advantage or pension strategies that applied to her for 3 weeks.

Example: No regular work week

Gerry has operated at a nursing 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 trip pay.

Gerry’s company eliminated his position and did not offer Gerry any composed notification of termination. Gerry was ill and off work for two 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 each week 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 estimation of average revenues) = $180.00 a week

His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00

Then his vacation pay on his termination pay is determined:

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 should also guarantee continued protection for any benefit or pension strategies that applied to him for four weeks.

When to pay termination pay

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

Mass termination

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

Meaning of “establishment”

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

– they are situated within the exact same town, or

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

Effective October 26, 2023, in cases of mass termination, the term “establishment” consists of an employee’s home, however only if the employee works from home and does not work at any other area where the company continues company.

This will require that workers who work exclusively from another location be thought about for addition in the count when figuring out whether 50 or more staff members have actually been ended.

Note that where an employee performs work both from their home and from another area where the employer continues company (for example, a workplace), their home is not included in the definition of “facility”. Instead, the staff member is considered to have a connection to the workplace place and, therefore, for the purpose of mass termination, the worker is included with respect to that office area.

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

ABC Company has an office and a warehouse situated in London, ON. Sabrina resides in London and works for ABC Company solely from another location: she carries out work for the business from home and does not operate at the office.

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

Employer responsibilities in a mass termination

When a mass termination takes place, the company should complete and deliver 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 shipment to the Director’s office on a day and at a time when it is open.

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

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

Any notification to the impacted employees is not thought about to have been provided up until the Form 1 is received by the Director; to put it simply, notification of mass termination is ineffective till the Director receives the Form 1.

In addition to supplying staff members with individual notices of termination, the employer must, on the first day of the notice period:

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

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

The quantity of notice employees need to receive in a mass termination is not based upon the staff members’ length of employment, but on the number of employees who have been terminated. A company must offer:

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

– 12 weeks notice if the employment of 200 to 499 employees is to be ended

– 16 weeks discover if the work of 500 or more employees is to be ended

Exception to the mass termination rules

The mass termination rules do not use if these 2 things apply:

– the number of workers whose work is being ended represents not more than 10 per cent of the workers who have actually been utilized for a minimum of three months at the facility

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

Mass termination: resignation by an employee

An employee who has actually gotten termination notice under the mass termination rules who desires to resign before the termination date supplied in the employer’s notice should give the employer a minimum of one week’s composed notice of resignation if the staff member has been utilized for less than 2 years. If the work duration has been 2 years or more, the employee must give a minimum of 2 weeks’ written notification of resignation. However, the worker does not need to provide notification of resignation if the company constructively dismisses the worker or breaches a regard to the contract.

Temporary work after termination date in notice

A company can provide work to a staff member who has 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 initial date of the termination and without being needed to offer any more notice of termination to the staff member when the momentary work ends.

If a staff member works beyond the 13-week period after the termination date and then has their work ended, the staff member will be entitled to a new composed notification of termination as if the previous notification had actually never been given. The staff member’s duration of work will then likewise consist of the duration of short-term 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 found in collective agreements.

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

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

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

If a worker who is not represented by a trade union chooses to keep their recall rights or stops working to make an option, the company needs to send the quantity 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 fails to choose, the company and the trade union need to try to come to a plan to hold the termination pay (and discontinuance wage, if any) in trust for the employee. If they can not come to an arrangement, and the trade union advises the company 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 cash in trust.

If an employee picks to give up their recall rights or if the recall rights end, the money that is held in trust must be sent to the employee.

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

Exemptions to discover of termination or termination pay

A number of these exemptions are complicated. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you need more info. Please also refer to the special guideline tool.

The notice of termination and termination pay requirements of the ESA do not use to an employee who:

– is guilty of wilful misbehavior, disobedience or wilful overlook of task that is not minor and has not been condoned by the company. Note: “wilful” consists of when a worker planned the resulting consequence or acted recklessly if they understood or need to have known the impacts their conduct would have. Poor work that is unintentional or unintentional is typically not considered wilful;

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

– the term ends or referall.us the task is not finished more than 12 months after the work began; or

– the employment continues for three months or more after the term ends or the job is finished;

See also: Employment Standards 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 common law that are greater than the rights to see of termination (or termination pay) and discontinuance wage under the ESA. An employee might want to sue their former company in court for “wrongful termination”. Employees need to understand that they can not sue a company for wrongful termination and submit a claim for termination pay or severance pay with the ministry for the very same termination or severance of work. A staff member should pick one or the other. Employees may want to acquire legal advice concerning their rights.