Termination Of Employment
A number of expressions are frequently used to explain scenarios when employment is ended. These include „release,“ „discharged,“ „dismissed,“ „fired“ and „completely laid off.“
Under the Employment Standards Act, 2000 (ESA) a person’s work is ended if the employer:
– dismisses or stops utilizing a worker, consisting of where a staff member is no longer used due to the personal bankruptcy or insolvency of the company;
– „constructively“ dismisses a staff member and the worker resigns, in reaction, within a reasonable time;
– lays a worker off for a period that is longer than a „short-term layoff“.
In a lot of cases, when a company ends the work of a worker who has actually been continuously employed for 3 months, the company should provide the worker with either composed notice of termination, termination pay or a combination (as long as the notice and the number of weeks of termination pay together equal the length of notice the worker is entitled to get).
The ESA does not need an employer to offer a staff member a reason that their work is being ended. There are, nevertheless, some scenarios where an employer can not terminate a worker’s employment even if the employer is prepared to offer appropriate composed notification or termination pay. For example, a company can not end somebody’s work, or punish them in any other way, if any part of the reason for the termination of work is based upon the worker asking concerns about the ESA or exercising 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 lack specified in the ESA. Please see the chapter on reprisals.
Receiving termination notification or pay in lieu
Certain workers are not entitled to see of termination or termination pay under the ESA. Examples consist of: staff members who are guilty of wilful misconduct, disobedience, or wilful neglect of task that is not minor and has actually not been excused by the employer. Other examples consist of building and construction staff members, employees on temporary layoff, employees who decline an offer of reasonable alternative employment and employees who have been employed less than 3 months.
There are a number of other exemptions to the termination of work provisions of the ESA. See „Exemptions to discover of termination or termination pay.“ Please also describe the special guideline tool.
The termination-of-employment rules are completely different from any privileges an employee might have to be paid discontinuance wage under the ESA.
Constructive termination
A positive termination may take place when a company makes a substantial change to an essential term or condition of an employee’s employment without the employee’s real or implied consent.
For instance, a worker may be constructively dismissed if the company makes changes to the staff member’s terms of employment that result in a significant reduction in salary or a significant negative change in such things as the employee’s work location, hours of work, authority, or position. Constructive termination may likewise include scenarios where a company bugs or abuses an employee, or an employer provides a worker a demand to „quit or be fired“ and the employee resigns in reaction.
The employee would have to resign in response to the modification within a sensible period of time in order for the employer’s actions to be thought about a termination of employment for functions of the ESA.
Constructive dismissal is a complex and tough subject. To learn more on useful dismissal, please contact the Employment Standards Information Centre at 1-800-531-5551.
Temporary layoff
A worker is on temporary layoff when a company cuts back or stops the employee’s work without ending their work (for example, laying someone off sometimes when there is insufficient work to do). The simple truth that the company does not define a recall date when laying the staff member off does not always suggest that the lay-off is not short-lived. Note, however, that a lay-off, even if intended to be temporary, might lead to constructive dismissal if it is not enabled by the work 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 normally earn (or makes on average) in a week.
A week of layoff does not include any week in which the staff member did not work for several days since the worker was unable or readily available to work, underwent disciplinary suspension, or was not offered with work because of a strike or lockout at their location of work or in other places.
Employers are not needed under the ESA to offer employees with a composed notification of a short-term layoff, nor do they have to provide a reason for the lay-off. (They may, nevertheless, be required to do these things under a cumulative contract or an employment agreement.)
Under the ESA, a „momentary 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 duration of 20 successive weeks, however less than 35 weeks of layoff in any period of 52 consecutive weeks, where:- the worker continues to receive considerable payments from the company;
or
– the employer continues to make payments for the advantage of the worker under a genuine group or staff member insurance coverage plan (such as a medical or drug insurance coverage plan) or a legitimate retirement or pension;
or
– the worker receives extra joblessness advantages;
or
– the staff member would be entitled to get extra welfare however isn’t receiving them because they are employed somewhere else;
or
– the employer remembers the employee to work within the time frame authorized by the Director of Employment Standards;
or
– the company remembers the worker within the time frame set out in an arrangement with a staff member who is not represented by a trade union;
or
3. a layoff longer than a layoff described in ‚B‘ where the company recalls a worker who is represented by a trade union within the time set out in a contract in between the union and the employer.
If a staff member is laid off for a duration longer than a temporary layoff as set out above, the employer is thought about to have actually terminated the staff member’s employment. Generally, the employee will then be entitled to termination pay.
Written notice of termination and termination pay
Under the ESA, a company can terminate the employment of an employee who has actually been employed constantly for three months or more if either:
– the company has actually provided the employee appropriate written notification of termination and the notification duration has ended
– the company pays termination pay to the employee where no composed notification or less notice than is required is given
Written notification of termination
An employee is entitled to notice of termination (or termination pay instead of notice) if they have been constantly employed for at least 3 months. An individual is considered „employed“ not only while they are actively working, however also throughout any time in which they are not working but the employment relationship still exists (for instance, time in which the employee is off ill or on leave or on lay-off).
The quantity of notice to which an employee is entitled depends on their „period of work“. An employee’s period of work includes not just all time while the worker is actively working however also any time that they are not working but the work relationship still exists, with the following exceptions:
– if a lay-off goes on longer than a temporary lay-off, the employee’s work is considered (or considered) to have actually been ended on the first day of the lay-off-any time after that does not count as part of the worker’s period of employment, even though the staff member may still be utilized for functions of the „continuously utilized for three months“ credentials
– if 2 separate periods of employment are separated by more than 13 weeks, only the most recent period counts for employment purposes of notification of termination
It is possible, in some scenarios, for an individual to have actually been „continuously used“ for 3 months or more and yet have a duration of employment of less than 3 months. In such scenarios, the worker would be entitled to see since a staff member who has been continuously used for at least three months is entitled to discover, and the minimum notice entitlement 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 quantity of notification required:
Note: Special rules identify the quantity of notice needed when it comes to mass terminations – where the work of 50 or more staff members is terminated at an employer’s facility within a four-week duration.
Requirements throughout the statutory notification duration
During the statutory notice period, a company must:
– not reduce the employee’s wage rate or change any other term or condition of work;
– continue to make whatever contributions would be needed to preserve the staff member’s advantages plans; and
– pay the worker the earnings 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 staff member’s work week.
Regular salaries
These are incomes aside from overtime pay, getaway pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and discontinuance wage and certain legal entitlements.
Regular work week
For an employee who generally works the same variety of hours each week, a routine work week is a week of that many hours, not including overtime hours.
Some workers 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 „routine wages“ for a „regular work week“ is the typical quantity of the regular earnings made by the staff member in the weeks in which the worker worked during the duration of 12 weeks instantly preceding the date the notice was offered.
A company is not permitted to arrange a worker’s vacation time during the statutory notification period unless the employee-after receiving written notification of termination of employment-agrees to take their vacation time throughout the notice duration.
If a company provides longer notice than is required, the statutory part of the notification period is the last part of the period that ends on the date of termination.
How to offer written notification
For the most part, composed notice of termination of employment must be resolved to the worker. It can be offered face to face or by mail, fax or e-mail, as long as shipment can be validated.
There are special guidelines for supplying notification of termination if a worker has an agreement of employment or a collective contract that provides seniority rights that enable a worker who is to be laid off or whose work is to be ended to displace (“ bump“) other staff members.
In that case, the employer must publish a notice in the work environment (where it will be seen by the employees) setting out the names, seniority and task category of those employees the employer plans to terminate and the date of the proposed termination. The posting of the notification is considered to be notification of termination, as of the date of the publishing, to a worker who is „bumped“ by a worker called in the notice. However, this notice of termination must still fulfill the length requirements set out in the ESA.
There are likewise unique rules regarding how notification is provided when there is a mass termination.
Termination pay
An employee who does not receive the composed notification required under the ESA needs to be provided termination pay in lieu of notice. Termination pay is a lump amount payment equal to the routine wages for a routine work week that a staff member would otherwise have been entitled to throughout the composed notice duration. An employee earns holiday pay on their termination pay. Employers must likewise continue to make whatever contributions would be required to keep the benefits the staff member would have been entitled to had they continued to be utilized through the notification duration.
Example: Regular work week
Sarah has actually worked for three and a half years. Now her job has been gotten rid of and her work has been ended. Sarah was not given any written notice of termination.
Sarah worked 40 hours a week each week and was paid $20.00 an hour. She also got four per cent getaway pay. Because she worked for more than three years however less than 4 years, she is entitled to three weeks‘ pay in lieu of notification.
Sarah’s routine incomes for a regular work week are determined:
$ 20.00 an hour X 40 hours a week = $800.00 a week
Her termination pay is calculated:
$ 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 trip pay is included to her termination pay:
$ 2400.00 + $96.00 = $2,496.00
Result: Sarah is entitled to $2,496.00. The company should likewise guarantee continued protection for any advantage or pension strategies that applied to her for three weeks.
Example: No routine work week
Gerry has actually operated at a nursing home for four years. He works every 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 holiday pay.
Gerry’s company removed his position and did not provide Gerry any composed notice of termination. Gerry was ill and off work for 2 of the 12 weeks instantly preceding the day his work was ended. Gerry made $1,800.00 in the 12 weeks before the day on which his employment ended.
Gerry is entitled to 4 weeks of termination pay.
Gerry’s typical earnings per week are calculated:
$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off sick for two weeks for that reason these weeks are not included in the estimation of average incomes) = $180.00 a week
His termination pay is computed:
$ 180.00 × 4 weeks = $720.00
Then his getaway pay on his termination pay is computed:
6% of $720.00 = $43.20
Finally, his holiday pay is added to his termination pay:
$ 720.00 + $43.20 = $763.20
Result: Gerry is entitled to $763.20. The employer must also guarantee ongoing coverage for any advantage or pension that applied to him for four weeks.
When to pay termination pay
Termination pay should be paid to an employee either 7 days after the worker’s work is terminated or on the employee’s next routine pay date, whichever is later.
Mass termination
Special guidelines for notification of termination may apply in cases of mass termination (when an employer is ending 50 or more workers at its facility within a four-week duration).
Meaning of „establishment“
An „establishment“ is a place at which the employer brings on company. Separate areas can be considered one facility if either:
– they are located within the very same municipality, or
– a worker at one location has legal seniority rights that reach the other area, allowing the employee to displace another employee (likewise called „bumping rights“).
Effective October 26, 2023, in cases of mass termination, the term „establishment“ includes an employee’s home, however only if the worker works from home and does not operate at any other location where the company brings on organization.
This will require that staff members who work specifically remotely be thought about for addition in the count when figuring out whether 50 or more staff members have been ended.
Note that where an employee carries out work both from their home and from another place where the company continues company (for instance, a workplace), their home is not consisted of in the definition of „establishment“. Instead, the employee is considered to have a connection to the office location and, for that reason, for the purpose of mass termination, the staff member is included with regard to that office area.
Example: where multiple areas are considered one „facility“
ABC Company has an office and a warehouse located in London, ON. Sabrina resides in London and works for ABC Company solely from another location: she carries out work for the company from home and does not operate at the workplace.
For the purpose of mass termination, the business’s London office, London warehouse and Sabrina’s London home are considered one „facility.“
Employer commitments in a mass termination
When a mass termination takes place, the employer should complete and provide the Form 1 (Notice of termination of work) to the Director of Employment Standards (Director) by:
– e-mail 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 office, if the delivery can be verified.
The workplace of the Director of Employment Standards is found on the 9th flooring, 400 University Avenue, Toronto ON M7A 1T7.
Any notice to the impacted staff members is not thought about to have been offered until the Form 1 is gotten by the Director; to put it simply, notification of mass termination is ineffective till the Director gets the Form 1.
In addition to supplying employees with specific notifications of termination, the employer must, on the very first day of the notice duration:
– publish a copy of the Form 1 provided to the Director in the work environment where it will come to the attention of the impacted employees.
– offer a copy of the Form 1 to each affected worker.
The amount of notification staff members must receive in a mass termination is not based on the staff members‘ length of employment, but on the number of workers who have been terminated. An employer needs to offer:
– 8 weeks notice if the work of 50 to 199 workers is to be ended
– 12 weeks observe if the work of 200 to 499 employees is to be terminated
– 16 weeks discover if the work of 500 or more employees is to be terminated
Exception to the mass termination guidelines
The mass termination guidelines do not apply if these two things apply:
– the variety of employees whose work is being ended represents not more than 10 percent of the staff members who have been utilized for at least three months at the facility
– none of the terminations are caused 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 actually gotten termination notification under the mass termination rules who wishes to resign before the termination date provided in the company’s notification should give the employer a minimum of one week’s written notice of resignation if the staff member has been utilized for less than two years. If the employment period has actually been two years or more, the worker must offer at least 2 weeks‘ composed notification of resignation. However, the worker does not have to notify of resignation if the company constructively dismisses the staff member or employment breaches a term of the contract.
Temporary work after termination date in notice
An employer can provide work to a staff member who has actually been provided notice of termination on a momentary basis in the 13-week duration after the termination date set out in the notification without affecting the original date of the termination and without being required to offer any further notification of termination to the employee when the short-term work ends.
If an employee works beyond the 13-week duration after the termination date and after that has their work terminated, the employee will be entitled to a new composed notice of termination as if the previous notification had never ever been offered. The worker’s duration of work will then likewise include 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 work. This right is frequently found in collective arrangements.
A staff member who has recall rights and who is entitled to termination pay due to the fact that of a layoff of 35 weeks or more may pick 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
– quit their recall rights and receive termination pay (and severance pay, if they were entitled to discontinuance wage).
If an employee is entitled to both termination pay and severance pay, they need to make the same option for both.
If a worker who is not represented by a trade union elects to keep their recall rights or fails to choose, the company should send the quantity of the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.
If a staff member who is represented by a trade union 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 come to an arrangement, and the trade union recommends the employer and the Director of Employment Standards in composing that efforts have actually failed, the company must send out the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the money in trust.
If a worker picks to quit their recall rights or if the recall rights expire, the cash that is kept in trust should 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 employer.
Exemptions to discover of termination or termination pay
Many of these exemptions are complicated. Please call the Employment Standards Information Centre, 1-800-531-5551, if you require more info. Please also describe the unique rule tool.
The notice of termination and termination pay requirements of the ESA do not apply to an who:
– is guilty of wilful misconduct, disobedience or wilful overlook of task that is not unimportant and has actually not been excused by the company. Note: „wilful“ includes when an employee planned the resulting consequence or acted recklessly if they knew or need to have known the effects their conduct would have. Poor work conduct that is unintentional or unintended is generally not thought about wilful;
– was hired for a specific length of time or up until the completion of a particular job. However, such a staff member will be entitled to see of termination or termination pay if:- the work ends before the term expires or the job is finished; or
– the term ends or the job is not finished more than 12 months after the work started; or
– the employment continues for 3 months or more after the term expires or the task is finished;
See also: Employment Standards Self-Service Tool
Wrongful dismissal
Rights greater than ESA notice of termination, termination pay, severance pay
The rules under the ESA about termination and severance of work are minimum requirements. Some workers might have rights under the common law that are greater than the rights to discover of termination (or termination pay) and discontinuance wage under the ESA. A staff member might desire to sue their former employer in court for „wrongful dismissal“. Employees must understand that they can not take legal action against a company for employment wrongful dismissal and file a claim for termination pay or discontinuance wage with the ministry for the exact same termination or severance of employment. An employee should choose one or the other. Employees may wish to get legal advice worrying their rights.
