Termination Of Employment

A variety of expressions are typically used to explain situations when work is ended. These consist of “release,” “released,” “dismissed,” “fired” and “completely laid off.”

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

– dismisses or stops employing a worker, consisting of where an employee is no longer utilized due to the insolvency or insolvency of the company;

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

– lays a worker off for a duration that is longer than a “temporary layoff”.

Most of the times, when an employer ends the employment of an employee who has actually been continually used for 3 months, the employer 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 notice the employee is entitled to get).

The ESA does not require a company to provide a staff member a reason their employment is being ended. There are, however, some circumstances where a company can not terminate an employee’s employment even if the employer is prepared to give appropriate composed notification or termination pay. For instance, an employer can not end somebody’s work, or punish them in any other method, if any part of the factor for the termination of employment is based on the staff member asking concerns about the ESA or exercising a right under the ESA, such as refusing to work in excess of the everyday or weekly hours of work optimums, or taking a leave of lack specified in the ESA. Please see the chapter on reprisals.

Receiving termination notice or pay in lieu

Certain employees are not entitled to notice of termination or termination pay under the ESA. Examples include: staff members who are guilty of wilful misconduct, disobedience, or wilful neglect of task that is not trivial and has not been condoned by the company. Other examples consist of building and construction workers, workers on momentary layoff, workers who decline an offer of reasonable alternative work and workers who have been employed less than 3 months.

There are a variety 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 unique guideline tool.

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

Constructive termination

A positive dismissal may happen when an employer makes a significant modification to a fundamental term or condition of a worker’s work without the employee’s real or implied permission.

For instance, a worker may be constructively dismissed if the company makes modifications to the staff member’s terms of employment that result in a substantial decrease in wage or a significant negative modification in such things as the worker’s work area, hours of work, authority, or position. Constructive dismissal might likewise consist of scenarios where an employer pesters or abuses a staff member, or an employer gives an employee a demand to “stop or be fired” and the staff member resigns in response.

The employee would have to resign in action to the modification within an affordable period of time in order for the company’s actions to be considered a termination of employment for functions of the ESA.

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

Temporary layoff

A staff member is on short-term layoff when a company cuts back or stops the employee’s work without ending their work (for example, laying somebody off at times when there is not sufficient work to do). The simple reality that the employer does not specify a recall date when laying the staff member off does not necessarily indicate that the lay-off is not momentary. Note, however, that a lay-off, even if meant to be temporary, might lead to constructive 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 employee made less than half of what they would generally earn (or earns typically) in a week.

A week of layoff does not consist of any week in which the staff member did not work for one or more days since the staff member was unable or offered to work, went through disciplinary suspension, or was not offered with work since of a strike or lockout at their place of employment or somewhere else.

Employers are not needed under the ESA to provide employees with a composed notice of a short-term layoff, nor do they have to provide a reason for the lay-off. (They may, however, be needed to do these things under a cumulative agreement or an employment agreement.)

Under the ESA, a “short-lived 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 period of 20 consecutive weeks, however less than 35 weeks of layoff in any period of 52 successive weeks, where:- the employee continues to get significant payments from the company;
or

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

– the employee gets additional welfare;
or

– the employee would be entitled to receive supplemental welfare but isn’t getting them due to the fact that they are employed elsewhere;
or

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

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

3. a layoff longer than a layoff explained in ‘B’ where the employer remembers a staff member who is represented by a trade union within the time set out in an agreement 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 considered to have actually terminated the employee’s employment. Generally, the staff member will then be entitled to termination pay.

Written notification of termination and termination pay

Under the ESA, an employer can end the employment of an employee who has actually been utilized continuously for 3 months or more if either:

– the company has offered the employee proper composed notification of termination and the notification duration has ended

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

Written notice of termination

An employee is entitled to notice of termination (or termination pay instead of notification) if they have been constantly utilized for at least 3 months. A person is thought about “employed” not only while they are actively working, but likewise during whenever in which they are not working but the work 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 a staff member is entitled depends on their “duration of work”. A staff member’s period of work includes not just all time while the worker is actively working however likewise any time that they are not working but 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 considered (or considered) to have actually been ended on the very first day of the lay-off-any time after that does not count as part of the staff member’s duration of work, even though the employee might still be employed for purposes of the “continually used for 3 months” credentials

– if 2 different durations of work are separated by more than 13 weeks, only the most current duration counts for job functions of notice of termination

It is possible, in some circumstances, for an individual to have been “continuously employed” for 3 months or more and yet have a duration of work of less than 3 months. In such circumstances, the employee would be entitled to see because a staff member who has been constantly used for a minimum of 3 months is entitled to discover, and the minimum notice privilege of one week applies to a staff member with a duration of employment of any length less than one year.

The following chart specifies the amount of notification required:

Note: Special guidelines identify the amount of notification required in the case of mass terminations – where the employment of 50 or more staff members is terminated at an employer’s establishment 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 modify any other term or condition of employment;

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

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

Regular rate

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

Regular earnings

These are salaries aside from overtime pay, getaway pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and job severance pay and specific legal entitlements.

Regular work week

For an employee who typically works the exact same number 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 variety of hours each week or they are paid on a basis besides time. For these staff members, the “routine incomes” for a “regular work week” is the typical amount of the regular salaries made by the worker in the weeks in which the worker worked throughout the period of 12 weeks immediately preceding the date the notification was given.

A company is not enabled to schedule a worker’s trip time throughout the statutory notification period unless the employee-after getting written notification of termination of employment-agrees to take their getaway time throughout the notice period.

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

How to provide written notification

In the majority of cases, job composed notice of termination of work need to be addressed to the staff member. It can be provided in individual or by mail, fax or email, as long as delivery can be confirmed.

There are unique rules for providing notification of termination if a worker has an agreement of work or a cumulative arrangement that offers seniority rights that enable an employee who is to be laid off or whose work is to be ended to displace (” bump”) other staff members.

In that case, the employer needs to post a notification in the workplace (where it will be seen by the staff members) setting out the names, seniority and job classification of those employees the employer intends to terminate and the date of the proposed termination. The publishing of the notification is considered to be notification of termination, as of the date of the posting, to a worker who is “bumped” by a worker named in the notice. However, this notification of termination must still meet the length requirements set out in the ESA.

There are likewise special rules regarding how notification is provided when there is a mass termination.

Termination pay

A worker who does not get the composed notification needed under the ESA needs to be given termination pay in lieu of notification. Termination pay is a swelling amount payment equivalent to the routine wages for a routine work week that a worker would otherwise have actually been entitled to throughout the composed notice period. A worker earns holiday pay on their termination pay. Employers need to 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 utilized through the notice period.

Example: Regular work week

Sarah has worked for three and a half years. Now her task has been gotten rid of and her work has actually been terminated. Sarah was not given any composed notice of termination.

Sarah worked 40 hours a week every week and was paid $20.00 an hour. She likewise got 4 percent getaway pay. Because she worked for more than 3 years however less than 4 years, job she is entitled to three weeks’ pay in lieu of notification.

Sarah’s regular 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 determined:

4% of $2,400.00 = $96.00

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

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The employer must also make sure ongoing coverage for any advantage or pension that used to her for 3 weeks.

Example: No routine work week

Gerry has operated at an assisted living home for four years. He works weekly, however his hours differ from week to week. His rate of pay is $25.00 an hour, and he is paid 6 percent getaway pay.

Gerry’s employer removed his position and did not provide 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 ended. 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 typical incomes per week are calculated:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for two weeks for that reason these weeks are not consisted of in the computation of typical earnings) = $180.00 a week

His termination pay is determined:

$ 180.00 × 4 weeks = $720.00

Then his vacation pay on his termination pay is calculated:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer must also ensure ongoing coverage for any benefit or pension strategies that applied to him for 4 weeks.

When to pay termination pay

Termination pay must be paid to an employee either 7 days after the worker’s work is ended or on the staff member’s next regular pay date, whichever is later.

Mass termination

Special guidelines for notice of termination may apply in cases of mass termination (when an employer is ending 50 or more employees at its establishment within a four-week duration).

Meaning of “facility”

An “establishment” is a location at which the company brings on organization. Separate places can be considered one establishment if either:

– they lie within the same town, or

– an employee at one place has contractual seniority rights that encompass the other place, enabling the employee to displace another worker (also called “bumping rights”).

Effective October 26, 2023, in cases of mass termination, the term “facility” consists of a staff member’s home, however just if the staff member works from home and does not work at any other area where the company carries on service.

This will require that staff members who work specifically remotely be thought about for inclusion in the count when determining whether 50 or more employees have actually been terminated.

Note that where an employee carries out work both from their home and from another area where the company carries on service (for instance, an office), their home is not included in the definition of “facility”. Instead, the employee is thought about to have a connection to the office area and, therefore, for the purpose of mass termination, the employee is included with regard to that workplace place.

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

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

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

Employer commitments in a mass termination

When a mass termination takes place, job the company should finish and provide the Form 1 (Notice of termination of employment) to the Director of Employment Standards (Director) by:

– email to [email protected].

– fax to (416) 326-7061.

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

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

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

Any notice to the impacted workers is ruled out to have been offered till the Form 1 is gotten by the Director; simply put, notice of mass termination is not efficient up until the Director receives the Form 1.

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

– publish a copy of the Form 1 supplied to the Director in the office where it will pertain to the attention of the impacted employees.

– provide 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 employees’ length of employment, however on the variety of staff members who have been terminated. A company should provide:

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

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

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

Exception to the mass termination guidelines

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

– the number of workers whose employment is being terminated represents not more than 10 percent of the workers who have actually been employed for a minimum of 3 months at the establishment

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

Mass termination: resignation by a staff member

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

Temporary work after termination date in notification

An employer can supply work to a staff member who has been given notice of termination on a temporary basis in the 13-week duration after the termination date set out in the notification without impacting the initial date of the termination and without being needed to provide any more notice of termination to the employee when the short-lived work ends.

If a worker works beyond the 13-week period after the termination date and then has their ended, the staff member will be entitled to a brand-new composed notification of termination as if the previous notification had actually never been offered. The worker’s period of work 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 called back 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 may select 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

– give up their recall rights and receive termination pay (and severance pay, if they were entitled to severance pay).

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

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

If a worker who is represented by a trade union elects to keep their recall rights or fails to decide, the employer 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 worker. If they can not pertain to an arrangement, and the trade union encourages the company and the Director of Employment Standards in composing that efforts have stopped working, the company must send the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If a staff member selects to quit their recall rights or if the recall rights expire, the cash that is kept in trust must be sent out to the worker.

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

Exemptions to see of termination or termination pay

A lot 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 also describe the unique rule tool.

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

– is guilty of wilful misconduct, 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 intended the resulting repercussion or acted recklessly if they knew or must have known the results their conduct would have. Poor work conduct that is unintentional or unintended is generally ruled out wilful;

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

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

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

See likewise: Employment Standards Self-Service Tool

Wrongful dismissal

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

The guidelines under the ESA about termination and severance of work are minimum requirements. Some employees might have rights under the common law that are greater than the rights to observe of termination (or termination pay) and discontinuance wage under the ESA. A worker might wish to sue their former company in court for “wrongful dismissal”. Employees ought to be mindful 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 exact same termination or severance of employment. A staff member must choose one or the other. Employees may wish to obtain legal advice worrying their rights.