Termination Of Employment

A variety of expressions are typically used to describe circumstances when employment is terminated. These include «release,» «released,» «dismissed,» «fired» and «completely laid off.»

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

— dismisses or stops using a staff member, including where an employee is no longer utilized due to the personal bankruptcy or insolvency of the company;

— «constructively» dismisses a worker and the worker resigns, in action, within a sensible time;

— lays a staff member off for a duration that is longer than a «temporary layoff».

In many cases, when an employer ends the employment of a staff member who has been continually used for three months, the company must supply the staff member with either written notification of termination, termination pay or a combination (as long as the notice and the number of weeks of termination pay together equivalent the length of notification the employee is entitled to receive).

The ESA does not require an employer to provide an employee a reason why their work 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 give correct composed notification or termination pay. For instance, a company can not end somebody’s work, or punish them in any other way, if any part of the factor for the termination of employment is based upon the employee 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 optimums, or taking a leave of absence defined in the ESA. Please see the chapter on reprisals.

Receiving termination notification or pay in lieu

Certain workers are not entitled to observe of termination or termination pay under the ESA. Examples consist of: workers who are guilty of wilful misbehavior, disobedience, or wilful overlook of responsibility that is not insignificant and has actually not been excused by the company. Other examples consist of building staff members, workers on short-term layoff, staff members who decline a deal of affordable alternative employment and employees who have actually been utilized less than three months.

There are a number of other exemptions to the termination of employment provisions of the ESA. See «Exemptions to discover of termination or termination pay.» Please likewise refer to the special rule tool.

The termination-of-employment guidelines are completely separate from any entitlements a worker may need to be paid discontinuance wage under the ESA.

Constructive dismissal

A useful dismissal may occur when an employer makes a significant modification to an essential term or condition of a staff member’s work without the worker’s actual or implied permission.

For example, a staff member may be constructively dismissed if the company makes changes to the worker’s terms of employment that result in a substantial reduction in income or a significant negative change in such things as the employee’s work area, hours of work, authority, or position. Constructive dismissal might also consist of circumstances where an employer bothers or abuses a staff member, or employment a company offers an employee a final notice to «stop or be fired» and the employee resigns in action.

The staff member would need to resign in reaction to the modification within a sensible time period in order for the company’s actions to be thought about a termination of work for functions of the ESA.

Constructive termination is a complex and difficult topic. For more information on positive termination, please contact the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A staff member is on short-term layoff when an employer cuts back or stops the staff member’s work without ending their employment (for instance, laying somebody off at times when there is insufficient work to do). The simple reality that the company does not define a recall date when laying the staff member off does not always indicate that the lay-off is not short-lived. Note, however, that a lay-off, even if meant to be short-term, may result in constructive termination if it is not allowed by the employment agreement.

For the purposes of the termination arrangements of the ESA, a «week of layoff» is a week in which the worker earned 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 one or more days due to the fact that the worker was not able or available to work, went through disciplinary suspension, or was not offered with work because of a strike or lockout at their location of employment or somewhere else.

Employers are not required under the ESA to supply employees with a written notification of a short-lived layoff, nor do they need to offer a reason for the lay-off. (They may, nevertheless, be required to do these things under a collective arrangement 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 successive weeks;
or

2. more than 13 weeks in any period of 20 consecutive weeks, however less than 35 weeks of layoff in any duration of 52 successive weeks, where:- the employee continues to get substantial payments from the employer;
or

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

— the staff member gets extra joblessness benefits;
or

— the worker would be entitled to get additional unemployment benefits however isn’t getting them since they are used in other places;
or

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

— the employer recalls the staff member within the time frame set out in a contract 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 remembers an employee who is represented by a trade union within the time set out in an arrangement between the union and the employer.

If an employee is laid off for a period longer than a short-lived layoff as set out above, the company is thought about to have ended the employee’s work. Generally, the worker will then be entitled to termination pay.

Written notice of termination and termination pay

Under the ESA, a company can end the work of an employee who has actually been used continuously for three months or more if either:

— the company has actually given the staff member correct composed notice of termination and the notice duration has actually ended

— the employer pays termination pay to the staff member where no composed notification or less notification than is needed is given

Written notice of termination

A staff member is entitled to notice of termination (or termination pay rather of notice) if they have actually been continually employed for at least three months. An individual is thought about «utilized» not just while they are actively working, but also throughout any time in which they are not working but the employment relationship still exists (for instance, time in which the worker is off sick or on leave or on lay-off).

The quantity of notification to which an employee is entitled depends upon their «period of employment». An employee’s duration of employment includes not only perpetuity while the worker is actively working but also any time that they are not working however the employment relationship still exists, with the following exceptions:

— if a lay-off goes on longer than a short-lived lay-off, the worker’s employment is considered (or considered) to have been terminated 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 employment, although the staff member might still be used for functions of the «continuously utilized for 3 months» certification

— if two different durations of employment are separated by more than 13 weeks, only the most current period counts for purposes of notification of termination

It is possible, in some scenarios, for an individual to have been «continually utilized» for 3 months or more and yet have a period of employment of less than three months. In such scenarios, the staff member would be entitled to see due to the fact that an employee who has been continually utilized for a minimum of 3 months is entitled to see, and the minimum notice privilege of one week applies to an employee with a duration of work of any length less than one year.

The following chart defines the quantity of notice needed:

Note: Special guidelines identify the quantity of notification required when it comes to mass terminations — where the work of 50 or more staff members is terminated at a company’s establishment within a four-week period.

Requirements during the statutory notice duration

During the statutory notification period, a company should:

— not lower the worker’s wage rate or change any other term or condition of work;

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

— pay the staff member the incomes they are entitled to, which can not be less than the staff member’s regular earnings 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 wages

These are salaries aside from overtime pay, getaway pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and severance pay and certain contractual entitlements.

Regular work week

For a worker who usually works the exact same number of hours every week, a regular work week is a week of that many hours, not including overtime hours.

Some employees do not have a regular work week. That is, they do not work the very same number of hours weekly or they are paid on a basis other than time. For these staff members, the «regular earnings» for a «routine work week» is the typical amount of the routine wages earned by the staff member in the weeks in which the staff member worked throughout the duration of 12 weeks immediately preceding the date the notice was given.

A company is not allowed to set up a staff member’s getaway time during the statutory notification period unless the employee-after receiving composed notice of termination of employment-agrees to take their trip time throughout the notification duration.

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

How to offer written notification

In many cases, composed notice of termination of employment need to be resolved to the staff member. It can be provided personally or by mail, fax or email, as long as delivery can be validated.

There are special rules for providing notification of termination if a staff member has a contract of work or employment a cumulative contract that provides seniority rights that enable a staff member who is to be laid off or whose employment is to be ended to displace (» bump») other workers.

In that case, the employer must post a notification in the workplace (where it will be seen by the workers) setting out the names, seniority and job classification of those staff members the company means to terminate and the date of the proposed termination. The posting of the notification is thought about to be notification of termination, as of the date of the publishing, to an employee who is «bumped» by a staff member named in the notice. However, this notice of termination must still satisfy the length requirements set out in the ESA.

There are also unique guidelines regarding how notice is offered when there is a mass termination.

Termination pay

A worker who does not get the written notification needed under the ESA must be offered termination pay in lieu of notice. Termination pay is a swelling amount payment equivalent to the routine incomes for a regular work week that a worker would otherwise have actually been entitled to throughout the composed notice period. A worker earns trip pay on their termination pay. Employers should likewise continue to make whatever contributions would be needed to maintain the benefits the worker would have been entitled to had they continued to be utilized through the notice period.

Example: Regular work week

Sarah has actually worked for three and a half years. Now her job has actually been eliminated and her employment has actually been terminated. Sarah was not offered any written notice of termination.

Sarah worked 40 hours a week every week and was paid $20.00 an hour. She also got four per cent trip pay. Because she worked for more than 3 years but less than 4 years, she is entitled to 3 weeks’ pay in lieu of notice.

Sarah’s routine earnings for a regular 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 vacation pay on her termination pay is calculated:

4% of $2,400.00 = $96.00

Finally, her holiday pay is contributed to her pay:

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The employer should likewise make sure ongoing coverage for any benefit or pension strategies that used to her for three weeks.

Example: No routine work week

Gerry has operated at a retirement home for four years. He works every week, but his hours vary from week to week. His rate of pay is $25.00 an hour, and he is paid 6 per cent vacation pay.

Gerry’s company eliminated his position and did not give Gerry any composed notification of termination. Gerry was ill and off work for 2 of the 12 weeks right away preceding the day his employment 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 incomes per week are determined:

$ 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 estimation of typical profits) = $180.00 a week

His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00

Then his trip 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 company needs to also make sure ongoing coverage for any advantage or pension that used to him for 4 weeks.

When to pay termination pay

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

Mass termination

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

Meaning of «facility»

An «facility» is an area at which the company continues organization. Separate locations can be thought about one establishment if either:

— they lie within the same municipality, or

— an employee at one place has legal seniority rights that encompass the other area, enabling the staff member to displace another employee (also called «bumping rights»).

Effective October 26, 2023, in cases of mass termination, the term «establishment» includes a staff member’s home, but just if the worker works from home and does not work at any other area where the employer continues business.

This will need that workers who work exclusively remotely be considered for addition in the count when figuring out whether 50 or more workers have been terminated.

Note that where an employee performs work both from their home and from another area where the employer continues service (for instance, a workplace), their home is not consisted of in the definition of «establishment». Instead, the staff member is thought about to have a connection to the office place and, employment therefore, for the function of mass termination, the staff member is consisted of with regard to that office place.

Example: where numerous locations are considered one «establishment»

ABC Company has an office and a warehouse located in London, ON. Sabrina lives in London and works for ABC Company exclusively from another location: she carries out work for the business from home and does not work at the workplace.

For the function of mass termination, the company’s London office, London warehouse and Sabrina’s London home are thought about one «establishment.»

Employer responsibilities in a mass termination

When a mass termination happens, the employer must complete and deliver the Form 1 (Notice of termination of employment) to the Director of Employment Standards (Director) by:

— email to esa_form1_notice@ontario.ca.

— fax to (416) 326-7061.

— individual shipment to the Director’s workplace on a day and at a time when it is open.

— mail delivery to the Director’s office, if the delivery 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 affected workers is ruled out to have been given till the Form 1 is gotten by the Director; in other words, notification of mass termination is not effective until the Director gets the Form 1.

In addition to supplying staff members with individual notifications of termination, the company must, on the very first day of the notification duration:

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

— supply a copy of the Form 1 to each impacted staff member.

The amount of notification employees need to get in a mass termination is not based on the staff members’ length of employment, but on the variety of employees who have actually been ended. A company needs to give:

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

— 12 weeks notice if the work of 200 to 499 staff members is to be terminated

— 16 weeks observe if the employment of 500 or more workers 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 staff members whose work is being ended represents not more than 10 percent of the staff members who have been used for a minimum of three months at the facility

— none of the terminations are triggered by the irreversible discontinuance of all or part of the company’s business at the establishment

Mass termination: resignation by a staff member

An employee who has received termination notice under the mass termination guidelines who wants to resign before the termination date supplied in the company’s notice should give the company at least one week’s written notification of resignation if the employee has actually been employed for less than two years. If the work period has actually been two years or more, the worker should give a minimum of 2 weeks’ written notification of resignation. However, the worker does not have to notify of resignation if the employer constructively dismisses the worker or breaches a term of the agreement.

Temporary work after termination date in notice

A company can supply work to a staff member who has actually been notified of termination on a short-lived basis in the 13-week period after the termination date set out in the notification without affecting the initial date of the termination and without being required to offer any additional notification of termination to the staff member when the momentary work ends.

If an employee works beyond the 13-week period after the termination date and after that has their employment ended, the staff member will be entitled to a new written notification of termination as if the previous notification had never ever been provided. The staff member’s period of employment will then also consist of the period of momentary 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 frequently found in cumulative contracts.

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 discontinuance wage, if they were entitled to discontinuance wage) at that time;
or

— quit their recall rights and receive termination pay (and discontinuance wage, if they were entitled to discontinuance wage).

If a worker is entitled to both termination pay and discontinuance wage, they need to make the exact same option for both.

If a staff member who is not represented by a trade union elects to keep their recall rights or fails to decide, the employer should send out the quantity of the termination pay (and discontinuance wage, 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 decide, the company and the trade union must attempt to come to a plan to hold the termination pay (and severance pay, if any) in trust for the worker. If they can not concern an arrangement, and the trade union advises the company and the Director of Employment Standards in composing that efforts have actually stopped working, the company should send the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If an employee selects to quit their recall rights or if the recall rights end, the cash that is held in trust must be sent out to the staff member.

If the staff member accepts a recall back to work, the cash that is held in trust will be gone back to the employer.

Exemptions to notice of termination or termination pay

A lot of these exemptions are complex. Please contact the Employment Standards Information Centre, 1-800-531-5551, if you require more information. Please also refer to the unique guideline tool.

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

— is guilty of wilful misconduct, disobedience or wilful neglect of duty that is not minor and has not been excused by the employer. Note: «wilful» consists of when a worker planned the resulting consequence or acted recklessly if they knew or should have known the results their conduct would have. Poor work conduct that is unintentional or unintentional is normally not thought about wilful;

— was worked with for a specific length of time or up until the conclusion of a particular task. However, such a worker will be entitled to see of termination or termination pay if:- the employment ends before the term expires or the task is finished; or

— the term expires or the task is not finished more than 12 months after the work started; or

— the employment continues for 3 months or more after the term ends or the job is completed;

See also: Employment Standards Self-Service Tool

Wrongful dismissal

Rights greater than ESA notice of termination, termination pay, severance pay

The guidelines under the ESA about termination and severance of work are minimum requirements. Some employees may have rights under the typical law that are greater than the rights to discover of termination (or termination pay) and discontinuance wage under the ESA. An employee may wish to sue their previous employer in court for «wrongful dismissal». Employees must understand that they can not take legal action against a company for wrongful dismissal and sue for termination pay or severance pay with the ministry for the very same termination or severance of work. A worker should pick one or the other. Employees may want to get legal recommendations worrying their rights.