Termination Of Employment
A number of expressions are frequently utilized to describe circumstances when employment is terminated. These include „let go,“ „discharged,“ „dismissed,“ „fired“ and „completely laid off.“
Under the Employment Standards Act, 2000 (ESA) a person’s employment is terminated if the company:
– dismisses or stops employing a worker, including where a staff member is no longer utilized due to the personal bankruptcy or insolvency of the employer;
– „constructively“ dismisses a staff member and the worker resigns, in reaction, employment within a sensible time;
– lays an employee off for a duration that is longer than a „short-lived layoff“.
Most of the times, when an employer ends the work of an employee who has actually been continuously utilized for 3 months, the employer must supply the worker with either composed notice 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 employee is entitled to receive).
The ESA does not require a company to give an employee a reason that their work is being ended. There are, nevertheless, some scenarios where an employer can not end an employee’s employment even if the company is prepared to give correct composed notification or termination pay. For example, a company can not end somebody’s work, or penalize them in any other way, if any part of the factor for the termination of employment is based on the staff member asking questions about the ESA or working out a right under the ESA, such as refusing 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.
Receiving termination notification or pay in lieu
Certain staff members are not entitled to notice of termination or termination pay under the ESA. Examples include: employees who are guilty of wilful misbehavior, disobedience, or wilful disregard of task that is not insignificant and has actually not been condoned by the company. Other examples include construction workers, employees on temporary layoff, staff members who refuse a deal of sensible alternative employment and staff members who have been used less than 3 months.
There are a number of other exemptions to the termination of work provisions of the ESA. See „Exemptions to observe of termination or termination pay.“ Please likewise describe the unique rule tool.
The termination-of-employment guidelines are totally different from any entitlements an employee may need to be paid severance pay under the ESA.
Constructive dismissal
A useful dismissal might take place when an employer makes a significant change to a fundamental term or condition of a staff member’s work without the employee’s real or implied approval.
For example, a worker may be constructively dismissed if the company makes modifications to the employee’s terms and conditions of work that lead to a substantial reduction in salary or a substantial negative change in such things as the employee’s work area, hours of work, authority, or position. Constructive dismissal might also include circumstances where a company harasses or abuses a staff member, or a company gives a worker a final notice to „quit or be fired“ and the employee resigns in response.
The employee would have to resign in response to the modification within a reasonable duration 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 tough subject. For more info on positive dismissal, please call the Employment Standards Information Centre at 1-800-531-5551.
Temporary layoff
A worker is on temporary layoff when an employer cuts back or stops the employee’s work without ending their employment (for instance, laying someone off sometimes when there is inadequate work to do). The mere fact that the company does not define a recall date when laying the staff member off does not always imply that the lay-off is not short-lived. Note, nevertheless, that a lay-off, even if planned to be momentary, might lead to useful termination if it is not enabled by the work agreement.
For the functions of the termination provisions of the ESA, a „week of layoff“ is a week in which the employee earned less than half of what they would normally earn (or earns usually) 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 not able or readily available to work, underwent disciplinary suspension, or was not provided with work because of a strike or lockout at their place of work or in other places.
Employers are not needed under the ESA to supply staff members with a written notification of a short-lived layoff, nor do they have to supply 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 period of 20 consecutive weeks;
or
2. more than 13 weeks in any period of 20 successive weeks, however less than 35 weeks of layoff in any duration of 52 successive weeks, where:- the worker continues to get considerable payments from the company;
or
– the employer continues to make payments for the advantage of the staff member under a genuine group or staff member insurance coverage strategy (such as a medical or drug insurance coverage plan) or a legitimate retirement or pension;
or
– the worker gets supplementary welfare;
or
– the staff member would be entitled to receive supplementary joblessness benefits however isn’t receiving them because they are used in other places;
or
– the employer recalls the staff member to work within the time frame approved 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 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 company.
If an employee is laid off for a duration longer than a momentary layoff as set out above, the employer is thought about to have terminated the employee’s employment. Generally, the staff member will then be to termination pay.
Written notice of termination and termination pay
Under the ESA, a company can terminate the work of a worker who has actually been utilized continuously for 3 months or more if either:
– the employer has actually given the staff member proper written notification of termination and the notice period has ended
– the company pays termination pay to the staff member where no composed notification or less notification than is required is offered
Written notice of termination
An employee is entitled to notice of termination (or termination pay instead of notification) if they have been continually employed for a minimum of three months. An individual is thought about „employed“ not only while they are actively working, but likewise throughout whenever in which they are not working however the employment relationship still exists (for example, time in which the worker is off sick or on leave or on lay-off).
The amount of notification to which an employee is entitled depends upon their „duration of employment“. An employee’s period of work includes not just all time while the staff member is actively working but likewise at 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 staff member’s work is considered (or considered) to have 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 period of work, even though the employee might still be employed for functions of the „constantly used for 3 months“ qualification
– if two separate periods of work are separated by more than 13 weeks, just the most recent period counts for functions of notice of termination
It is possible, in some scenarios, for a person to have been „continuously employed“ for 3 months or more and yet have a duration of work of less than three months. In such situations, the employee would be entitled to observe because a staff member who has actually been constantly employed for at least three months is entitled to see, and the minimum notification entitlement of one week uses to a staff member with a duration of employment of any length less than one year.
The following chart defines the amount of notification required:
Note: Special guidelines figure out the amount of notification needed in the case of mass terminations – where the employment of 50 or more workers is ended at an employer’s establishment within a four-week period.
Requirements throughout the statutory notification period
During the statutory notification period, an employer needs to:
– not decrease the staff member’s wage rate or change any other term or condition of employment;
– continue to make whatever contributions would be needed to preserve the staff member’s advantages strategies; and
– pay the employee the wages they are entitled to, which can not be less than the staff member’s regular earnings for a routine work week each week.
Regular rate
This is a staff member’s rate of pay for each non-overtime hour of operate in the employee’s work week.
Regular earnings
These are salaries besides overtime pay, vacation pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and discontinuance wage and particular legal privileges.
Regular work week
For an employee who normally works the very same variety of hours weekly, 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 weekly or they are paid on a basis besides time. For these staff members, the „regular incomes“ for a „regular work week“ is the average quantity of the regular salaries earned by the staff member in the weeks in which the worker worked throughout the duration of 12 weeks right away preceding the date the notice was offered.
A company is not permitted to arrange a staff member’s getaway time during the statutory notification duration unless the employee-after getting composed notification of termination of employment-agrees to take their vacation time during the notice duration.
If an employer provides longer notification than is required, the statutory part of the notice period is the tail end of the duration that ends on the date of termination.
How to provide written notice
Most of the times, composed notification of termination of employment must be resolved to the worker. It can be supplied in person or by mail, fax or email, as long as shipment can be verified.
There are unique rules for providing notification of termination if a worker has an agreement of work or a cumulative arrangement that supplies seniority rights that permit an employee who is to be laid off or whose employment is to be ended to displace (“ bump“) other staff members.
Because case, the company needs to post a notification in the workplace (where it will be seen by the employees) setting out the names, seniority and task classification of those workers the employer intends to end and the date of the proposed termination. The posting of the notice is thought about to be notification of termination, since the date of the publishing, to a worker who is „bumped“ by a staff member called in the notice. However, this notice of termination must still meet the length requirements set out in the ESA.
There are likewise unique rules relating to how notification is offered when there is a mass termination.
Termination pay
A worker who does not get the written notice needed under the ESA should be provided termination pay in lieu of notification. Termination pay is a swelling sum payment equal to the regular wages for a routine work week that a staff member would otherwise have been entitled to during the written notice period. A worker makes getaway pay on their termination pay. Employers must likewise continue to make whatever contributions would be required to maintain the benefits the employee would have been entitled to had they continued to be used through the notice period.
Example: Regular work week
Sarah has actually worked for three and a half years. Now her task has been removed and her work has been ended. Sarah was not offered any composed notification of termination.
Sarah worked 40 hours a week every week and was paid $20.00 an hour. She also received four percent 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 wages for employment a routine work week are determined:
$ 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 getaway pay on her termination pay is computed:
4% of $2,400.00 = $96.00
Finally, her vacation pay is added to her termination pay:
$ 2400.00 + $96.00 = $2,496.00
Result: Sarah is entitled to $2,496.00. The employer should also make sure ongoing protection for any advantage or pension plans that applied to her for three weeks.
Example: No regular work week
Gerry has actually worked at a retirement home for 4 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 percent vacation pay.
Gerry’s employer removed his position and did not give Gerry any composed notice of termination. Gerry was ill and off work for two of the 12 weeks immediately 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 4 weeks of termination pay.
Gerry’s typical earnings each week are computed:
$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off sick for 2 weeks therefore these weeks are not consisted of in the computation of average incomes) = $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 getaway pay is added to his termination pay:
$ 720.00 + $43.20 = $763.20
Result: Gerry is entitled to $763.20. The company should also make sure ongoing protection for any advantage or pension that used to him for four weeks.
When to pay termination pay
Termination pay should be paid to a staff member either 7 days after the staff member’s employment is ended or on the worker’s next regular pay date, whichever is later.
Mass termination
Special rules for notice of termination might use in cases of mass termination (when an employer is terminating 50 or more workers at its establishment within a four-week duration).
Meaning of „facility“
An „facility“ is a place at which the employer continues service. Separate areas can be considered one facility if either:
– they lie within the very same municipality, or
– an employee at one place has legal seniority rights that encompass the other location, allowing the worker to displace another staff member (likewise called „bumping rights“).
Effective October 26, 2023, in cases of mass termination, the term „establishment“ includes a staff member’s home, however just if the staff member works from home and employment does not work at any other location where the company carries on service.
This will need that workers who work solely remotely be thought about for addition in the count when figuring out whether 50 or more employees have actually been ended.
Note that where an employee performs work both from their home and from another place where the company continues business (for example, an office), their home is not consisted of in the meaning of „facility“. Instead, the employee is thought about to have a connection to the office area and, therefore, for the function of mass termination, the worker is included with respect to that workplace area.
Example: where several places are thought about one „establishment“
ABC Company has a workplace and a storage facility situated in London, ON. Sabrina resides in London and works for ABC Company exclusively remotely: she carries out work for the company from home and does not operate at the office.
For the purpose of mass termination, the business’s London workplace, London warehouse and Sabrina’s London home are considered one „facility.“
Employer obligations in a mass termination
When a mass termination takes place, the employer must finish and deliver 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.
– personal shipment to the Director’s workplace on a day and at a time when it is open.
– mail delivery to the Director’s workplace, if the shipment can be confirmed.
The office of the Director of Employment Standards is found on the 9th floor, 400 University Avenue, Toronto ON M7A 1T7.
Any notice to the affected workers is not considered to have been provided till the Form 1 is gotten by the Director; in other words, notice of mass termination is not efficient until the Director receives the Form 1.
In addition to offering staff members with individual notices of termination, the company must, on the very first day of the notice duration:
– publish a copy of the Form 1 offered to the Director in the work environment where it will concern the attention of the affected workers.
– supply a copy of the Form 1 to each affected employee.
The quantity of notification staff members need to receive in a mass termination is not based upon the employees‘ length of work, however on the variety of workers who have actually been terminated. An employer needs to offer:
– 8 weeks discover if the work of 50 to 199 workers is to be terminated
– 12 weeks discover if the work of 200 to 499 workers is to be ended
– 16 weeks observe if the work of 500 or more employees is to be ended
Exception to the mass termination guidelines
The mass termination rules do not apply if these 2 things use:
– the variety of employees whose employment is being terminated represents not more than 10 per cent of the employees who have been utilized for a minimum of 3 months at the facility
– none of the terminations are triggered by the permanent discontinuance of all or part of the company’s company at the facility
Mass termination: resignation by a worker
A worker who has actually received termination notice under the mass termination rules who wishes to resign before the termination date supplied in the company’s notice need to give the employer a minimum of one week’s composed notification of resignation if the worker has been utilized for less than 2 years. If the work period has actually been two years or more, the staff member should provide a minimum of two weeks‘ written notification of resignation. However, the staff member does not have to offer notice of resignation if the employer constructively dismisses the staff member or breaches a regard to the agreement.
Temporary work after termination date in notice
An employer can supply work to an employee who has been offered notification of termination on a momentary basis in the 13-week period after the termination date set out in the notice without affecting the initial date of the termination and without being needed to provide any more notification of termination to the staff member when the short-term work ends.
If a worker works beyond the 13-week period after the termination date and after that has their work ended, the worker will be entitled to a brand-new composed notice of termination as if the previous notice had never been offered. The worker’s period of employment will then likewise consist of the period of short-term work.
Recall rights
A „recall right“ is the right of a staff member on a layoff to be recalled to work by their employer under a term or condition of employment. This right is typically discovered in cumulative contracts.
A staff member who has recall rights and who is entitled to termination pay because 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 severance pay) at that time;
or
– give up their recall rights and get termination pay (and discontinuance wage, if they were entitled to severance pay).
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 stops working to make a choice, the employer needs to send out the amount 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 fails to choose, the company and the trade union need to try to come to an arrangement to hold the termination pay (and severance pay, if any) in trust for the worker. 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 stopped working, the employer should 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 chooses to quit their recall rights or if the recall rights end, the cash that is kept in trust should be sent out to the staff member.
If the staff member accepts a recall back to work, the cash that is kept in trust will be gone back to the employer.
Exemptions to observe of termination or termination pay
Much of these exemptions are complex. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you need more details. Please likewise refer to the special guideline tool.
The notice of termination and termination pay requirements of the ESA do not use to a worker who:
– is guilty of wilful misbehavior, disobedience or wilful disregard of task that is not trivial and has actually not been excused by the employer. Note: „wilful“ includes when a worker intended the resulting repercussion or acted recklessly if they understood or should have understood the effects their conduct would have. Poor work conduct that is unexpected or unintended is generally not considered wilful;
– was worked with for a specific length of time or until the conclusion of a specific job. However, such a worker 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 job is not completed more than 12 months after the work began; or
– the employment continues for 3 months or more after the term ends or the job is completed;
See likewise: Employment Standards Self-Service Tool
Wrongful dismissal
Rights higher than ESA notification of termination, termination pay, discontinuance wage
The guidelines under the ESA about termination and severance of employment are minimum requirements. Some employees may have rights under the typical law that are greater than the rights to see of termination (or termination pay) and severance pay under the ESA. A staff member may wish to sue their former employer in court for „wrongful termination“. Employees should be conscious that they can not sue an employer for wrongful dismissal and sue for termination pay or severance pay with the ministry for the same termination or severance of work. A worker must select one or the other. Employees might want to get legal suggestions concerning their rights.
