Termination Of Employment
A number of expressions are commonly used to explain circumstances when work is ended. These consist of „let go,“ „discharged,“ „dismissed,“ „fired“ and „completely laid off.“
Under the Employment Standards Act, 2000 (ESA) a person’s employment is ended if the employer:
– dismisses or stops using a staff member, including where an employee is no longer employed due to the personal bankruptcy or insolvency of the company;
– „constructively“ dismisses an employee and the employee resigns, in reaction, within a sensible time;
– lays a staff member off for a duration that is longer than a „short-lived layoff“.
In many cases, when a company ends the employment of a worker who has actually been constantly utilized for three months, the company must offer the staff member with either composed notice of termination, termination pay or a mix (as long as the notification and the variety of weeks of termination pay together equal the length of notice the worker is entitled to receive).
The ESA does not require an employer to provide a worker a factor why their employment is being ended. There are, nevertheless, some scenarios where a company can not end an employee’s employment even if the company is prepared to offer correct composed notification or termination pay. For instance, an employer can not end somebody’s employment, or penalize them in any other way, if any part of the reason for the termination of employment is based upon the staff member asking questions about the ESA or working out a right under the ESA, such as declining to work in excess of the day-to-day or weekly hours of work maximums, or taking a leave of lack specified in the ESA. Please see the chapter on reprisals.
Qualifying for termination notification or pay in lieu
Certain staff members are not entitled to discover of termination or termination pay under the ESA. Examples consist of: workers who are guilty of wilful misbehavior, disobedience, or wilful disregard of duty that is not minor and has actually not been condoned by the employer. Other examples include building staff members, staff members on temporary layoff, employees who refuse a deal of affordable alternative work and workers who have actually been employed less than three months.
There are a variety of other exemptions to the termination of employment arrangements of the ESA. See „Exemptions to discover of termination or termination pay.“ Please also refer to the unique rule tool.
The termination-of-employment rules are entirely separate from any privileges an employee might need to be paid severance pay under the ESA.
Constructive termination
A useful termination might happen when a company makes a considerable change to a fundamental term or condition of a worker’s work without the employee’s actual or implied approval.
For example, a staff member might be constructively dismissed if the employer makes modifications to the staff member’s terms of work that result in a substantial reduction in income or a substantial negative modification in such things as the employee’s work place, hours of work, authority, or referall.us position. Constructive termination might also consist of scenarios where a company harasses or abuses a staff member, or an employer provides an employee a demand to „give up or be fired“ and the worker 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 functions of the ESA.
Constructive dismissal is a complex and hard subject. To learn more on positive termination, please contact 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 staff member’s work without ending their work (for instance, laying somebody off at times when there is insufficient work to do). The simple fact that the employer does not specify a recall date when laying the staff member off does not always suggest that the lay-off is not short-lived. Note, nevertheless, that a lay-off, even if intended to be temporary, may lead to useful termination if it is not permitted by the employment agreement.
For the purposes of the termination provisions of the ESA, a „week of layoff“ is a week in which the worker earned less than half of what they would ordinarily earn (or makes typically) in a week.
A week of layoff does not consist of any week in which the employee did not work for several days because the employee was unable or readily available to work, was subject to disciplinary suspension, or was not offered with work due to the fact that of a strike or lockout at their place of work or elsewhere.
Employers are not needed under the ESA to offer staff members with a written notice of a temporary 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 contract or an employment agreement.)
Under the ESA, a „short-term 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 successive weeks, but less than 35 weeks of layoff in any period of 52 successive weeks, where:- the staff member continues to get considerable payments from the employer;
or
– the company continues to make payments for the advantage of the staff member under a legitimate group or staff member insurance coverage plan (such as a medical or drug insurance coverage plan) or a genuine retirement or pension;
or
– the staff member receives additional welfare;
or
– the staff member would be entitled to get supplementary joblessness advantages but isn’t getting them since they are employed somewhere else;
or
– the company remembers the worker to work within the time frame approved by the Director of Employment Standards;
or
– the employer recalls the worker within the time frame set out in a contract with an employee who is not represented by a trade union;
or
3. a layoff longer than a layoff explained in ‚B‘ where the employer recalls a worker 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 short-term layoff as set out above, the company is considered to have terminated the employee’s work. Generally, the employee will then be entitled to termination pay.
Written notification of termination and termination pay
Under the ESA, a company can terminate the employment of an employee who has actually been employed continuously for 3 months or more if either:
– the employer has given the worker proper composed notice of termination and the notice period has ended
– the employer pays termination pay to the employee where no written notice or less notification than is needed is offered
Written notification of termination
A staff member is entitled to discover of termination (or termination pay rather of notification) if they have actually been constantly utilized for a minimum of three months. An individual is considered „employed“ not just while they are actively working, but also throughout any time in which they are not working however the employment relationship still exists (for instance, time in which the staff member is off sick or on leave or on lay-off).
The quantity of notification to which a worker is entitled depends upon their „duration of employment“. An employee’s period of work includes not just perpetuity while the staff member is actively working however 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 short-lived lay-off, the work is deemed (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 work, even though the worker may still be used for purposes of the „constantly used for 3 months“ credentials
– if two different durations of employment are separated by more than 13 weeks, just the most current period counts for functions of notification of termination
It is possible, in some circumstances, for an individual to have actually been „constantly utilized“ for 3 months or more and yet have a duration of employment of less than three months. In such circumstances, the worker would be entitled to discover because a staff member who has been continuously employed for a minimum of three months is entitled to discover, and the minimum notification entitlement of one week applies to a worker with a period of work of any length less than one year.
The following chart defines the quantity of notice needed:
Note: Special guidelines determine the amount of notice needed in the case of mass terminations – where the employment of 50 or more staff members is terminated at an employer’s facility within a four-week period.
Requirements throughout the statutory notification period
During the statutory notice duration, an employer needs to:
– not reduce the employee’s wage rate or alter any other term or condition of work;
– continue to make whatever contributions would be required to preserve the worker’s advantages strategies; and
– pay the employee the earnings they are entitled to, which can not be less than the staff member’s routine incomes for a regular work week every week.
Regular rate
This is a staff member’s rate of pay for each non-overtime hour of operate in the staff member’s work week.
Regular incomes
These are incomes aside from overtime pay, trip pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of task pay, termination pay and severance pay and particular contractual privileges.
Regular work week
For a staff member who normally works the very same variety of hours each week, a regular work week is a week of that many hours, not including overtime hours.
Some staff members do not have a routine work week. That is, they do not work the same number of hours each week or they are paid on a basis other than time. For these workers, the „regular wages“ for a „routine work week“ is the typical quantity of the regular wages earned by the employee in the weeks in which the employee worked throughout the duration of 12 weeks instantly preceding the date the notification was given.
An employer is not allowed to schedule an employee’s getaway time throughout the statutory notification period unless the employee-after getting written notice of termination of employment-agrees to take their getaway time throughout the notice period.
If a company supplies 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 provide written notice
Most of the times, written notification of termination of employment need to be addressed to the employee. It can be offered face to face or by mail, fax or e-mail, as long as shipment can be verified.
There are unique guidelines for offering notification of termination if a worker has a contract of employment or a collective contract that supplies seniority rights that permit a worker who is to be laid off or whose employment is to be ended to displace (“ bump“) other workers.
In that case, the employer should post a notification in the workplace (where it will be seen by the staff members) setting out the names, seniority and task category of those employees the employer plans to end and the date of the proposed termination. The publishing of the notification is thought about to be notice of termination, since the date of the publishing, to a worker who is „bumped“ by an employee called in the notification. However, this notification of termination need to still meet the length requirements set out in the ESA.
There are likewise special guidelines regarding how notification is supplied when there is a mass termination.
Termination pay
An employee who does not receive the written notice required under the ESA should be provided termination pay in lieu of notification. Termination pay is a lump amount payment equivalent to the routine incomes for a routine work week that a staff member would otherwise have actually been entitled to throughout the composed notice duration. A worker earns trip pay on their termination pay. Employers need to likewise continue to make whatever contributions would be required to keep the advantages the worker would have been entitled to had they continued to be used through the notice duration.
Example: Regular work week
Sarah has actually worked for three and a half years. Now her task has actually been removed and her work has actually been terminated. Sarah was not given any composed notice of termination.
Sarah worked 40 hours a week weekly and was paid $20.00 an hour. She likewise got four per cent trip pay. Because she worked for more than three years but less than 4 years, she is entitled to three weeks‘ pay in lieu of notification.
Sarah’s regular wages for a regular work week are calculated:
$ 20.00 an hour X 40 hours a week = $800.00 a week
Her termination pay is determined:
$ 800.00 X 3 weeks = $2,400.00
Then her trip pay on her termination pay is calculated:
4% of $2,400.00 = $96.00
Finally, her holiday pay is contributed to her termination pay:
$ 2400.00 + $96.00 = $2,496.00
Result: Sarah is entitled to $2,496.00. The employer must also guarantee continued coverage for any benefit or pension that used to her for three weeks.
Example: No routine work week
Gerry has worked at a retirement home for four 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 percent holiday pay.
Gerry’s employer eliminated his position and did not offer Gerry any written notice of termination. Gerry was ill and off work for two of the 12 weeks right away preceding the day his work 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 typical revenues each week are calculated:
$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off sick for two weeks therefore these weeks are not included in the calculation of average revenues) = $180.00 a week
His termination pay is determined:
$ 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 included to his termination pay:
$ 720.00 + $43.20 = $763.20
Result: Gerry is entitled to $763.20. The employer needs to also make sure continued coverage for any advantage or pension that applied to him for 4 weeks.
When to pay termination pay
Termination pay must be paid to an employee either seven days after the employee’s work is ended or on the employee’s next routine pay date, whichever is later on.
Mass termination
Special guidelines for notification of termination might use in cases of mass termination (when a company is ending 50 or more workers at its establishment within a four-week period).
Meaning of „facility“
An „establishment“ is a location at which the employer continues company. Separate areas can be thought about one establishment if either:
– they lie within the very same municipality, or
– a worker at one location has contractual seniority rights that extend to the other area, enabling the staff member to displace another worker (likewise called „bumping rights“).
Effective October 26, 2023, in cases of mass termination, the term „establishment“ includes an employee’s home, but just if the employee works from home and does not operate at any other location where the employer brings on company.
This will need that staff members who work exclusively from another location be thought about for inclusion in the count when identifying whether 50 or more workers have actually been terminated.
Note that where an employee performs work both from their home and from another location where the employer continues organization (for instance, a workplace), their home is not consisted of in the definition of „facility“. Instead, the employee is thought about to have a connection to the workplace area and, for that reason, for the function of mass termination, the staff member is consisted of with regard to that workplace location.
Example: where multiple areas are considered one „facility“
ABC Company has a workplace and a storage facility located 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 workplace.
For the purpose of mass termination, the business’s London workplace, London storage facility and Sabrina’s London home are thought about one „facility.“
Employer commitments in a mass termination
When a mass termination occurs, the company must complete and deliver the Form 1 (Notice of termination of employment) 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 workplace on a day and at a time when it is open.
– mail shipment to the Director’s office, if the shipment can be verified.
The workplace of the Director of Employment Standards is located on the 9th floor, 400 University Avenue, Toronto ON M7A 1T7.
Any notice to the impacted employees is not considered to have been offered until the Form 1 is gotten by the Director; simply put, notification of mass termination is not efficient until the Director receives the Form 1.
In addition to offering staff members 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 pertain to the attention of the impacted workers.
– provide a copy of the Form 1 to each affected staff member.
The amount of notification staff members should receive in a mass termination is not based on the workers‘ length of employment, however on the number of staff members who have been terminated. An employer needs to provide:
– 8 weeks see 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 ended
– 16 weeks notice if the work of 500 or more employees is to be ended
Exception to the mass termination rules
The mass termination guidelines do not use if these two things use:
– the number of workers whose employment is being terminated represents not more than 10 per cent of the employees who have been employed for a minimum of 3 months at the facility
– none of the terminations are triggered by the irreversible discontinuance of all or part of the company’s service at the establishment
Mass termination: resignation by a worker
An employee who has actually gotten termination notification under the mass termination guidelines who wishes to resign before the termination date supplied in the employer’s notice need to offer the company a minimum of one week’s written notification of resignation if the employee has been used for less than 2 years. If the work period has actually been two years or more, the employee needs to provide at least 2 weeks‘ written notification of resignation. However, the worker does not have to provide notice of resignation if the company constructively dismisses the staff member or breaches a term of the agreement.
Temporary work after termination date in notice
An employer can provide work to a staff member who has actually been provided notification of termination on a temporary basis in the 13-week period after the termination date set out in the notice without affecting the original date of the termination and without being required to offer any more notification of termination to the employee when the temporary work ends.
If an employee 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 brand-new written notice of termination as if the previous notice had never ever been provided. The employee’s period of work will then also include the duration of short-term 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 typically found in collective contracts.
A staff member who has recall rights and who is entitled to termination pay because of a layoff of 35 weeks or more might pick 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
– provide up their recall rights and receive termination pay (and severance pay, if they were entitled to severance pay).
If a staff member is entitled to both termination pay and severance pay, they must make the same choice for both.
If a staff member who is not represented by a trade union chooses to keep their recall rights or fails to choose, the company needs to 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 worker who is represented by a trade union elects to keep their recall rights or stops working to choose, the company and the trade union should try to come to a plan to hold the termination pay (and severance pay, if any) in trust for the employee. If they can not come to an arrangement, and the trade union recommends the company and the Director of Employment Standards in composing that efforts have actually stopped working, the employer should send out the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the money in trust.
If a staff member picks to provide up their recall rights or if the recall rights expire, the money that is held in trust must be sent to the staff member.
If the employee accepts a recall back to work, the money that is kept in trust will be gone back to the company.
Exemptions to observe of termination or termination pay
A number of these exemptions are complex. Please call the Employment Standards Information Centre, 1-800-531-5551, if you require more details. Please likewise refer to the special rule tool.
The notice of termination and termination pay requirements of the ESA do not apply to an employee who:
– is guilty of wilful misconduct, disobedience or wilful disregard of duty that is not trivial and has actually not been excused by the employer. Note: „wilful“ consists of when an employee intended the resulting effect or acted recklessly if they understood or ought to have understood the effects their conduct would have. Poor work conduct that is unexpected or unintentional is typically not thought about wilful;
– was employed for a particular length of time or till the completion of a specific task. However, such a staff member will be entitled to observe of termination or termination pay if:- the work ends before the term expires or the task is finished; or
– the term ends or the task is not finished more than 12 months after the work began; or
– the work continues for 3 months or more after the term expires or the job is completed;
See also: Employment Standards Self-Service Tool
Wrongful termination
Rights higher than ESA notification of termination, termination pay, discontinuance wage
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 notice of termination (or termination pay) and discontinuance wage under the ESA. A staff member may wish to sue their former employer in court for „wrongful termination“. Employees ought to understand that they can not take legal action against a company for wrongful termination and file a claim for termination pay or discontinuance wage with the ministry for the same termination or severance of employment. A worker should select one or the other. Employees may wish to get legal suggestions worrying their rights.