Termination Of Employment

A variety of expressions are commonly used to describe situations when work is terminated. These consist of “let go,” “released,” “dismissed,” “fired” and “completely laid off.”

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

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

– “constructively” dismisses a worker and the staff member resigns, in response, within a reasonable time;

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

For the most part, when a company ends the employment of a staff member who has been constantly utilized for three months, the employer must offer the employee with either composed notice of termination, termination pay or a mix (as long as the notice and the number of weeks of termination pay together equivalent the length of notice the worker is entitled to receive).

The ESA does not require an employer to offer an employee a reason that their employment is being ended. There are, nevertheless, some situations where a company can not end a staff member’s work even if the employer is prepared to provide appropriate composed notice or termination pay. For instance, an employer can not end someone’s work, or penalize them in any other method, if any part of the reason for the termination of work is based on the staff member asking questions about the ESA or exercising a right under the ESA, such as refusing to work in excess of the everyday or weekly hours of work optimums, or taking a leave of lack defined in the ESA. Please see the chapter on reprisals.

Qualifying for termination notice or pay in lieu

Certain workers are not entitled to discover of termination or termination pay under the ESA. Examples consist of: employees who are guilty of wilful misbehavior, disobedience, or wilful disregard of duty that is not insignificant and has not been excused by the company. Other examples include building staff members, employees on short-term layoff, employment employees who decline an offer of sensible alternative work and employees who have actually 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 observe of termination or termination pay.” Please also refer to the special guideline tool.

The termination-of-employment guidelines are completely separate from any privileges a worker might need to be paid severance pay under the ESA.

Constructive termination

A constructive termination might take place when a company makes a considerable modification to a fundamental term or condition of an employee’s work without the worker’s actual or implied permission.

For example, a worker may be constructively dismissed if the employer makes changes to the staff member’s terms of employment that lead to a considerable decrease in wage or a substantial negative modification in such things as the worker’s work area, hours of work, authority, or position. Constructive dismissal might likewise consist of circumstances where an employer harasses or abuses a staff member, or a company gives a staff member a final notice to “quit or be fired” and the employee resigns in reaction.

The worker would need to resign in reaction to the modification within a sensible period of time in order for the employer’s actions to be considered a termination of work for functions of the ESA.

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

Temporary layoff

An employee is on temporary layoff when a company 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 employer does not specify a recall date when laying the worker off does not necessarily imply that the lay-off is not short-term. Note, nevertheless, that a lay-off, even if intended to be momentary, might lead to useful dismissal if it is not permitted by the employment contract.

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 generally make (or makes typically) in a week.

A week of layoff does not include any week in which the staff member did not work for several days due to the fact that the employee was unable or readily available to work, underwent disciplinary suspension, or was not provided with work since of a strike or lockout at their place of work or in other places.

Employers are not required under the ESA to provide employees with a written notification of a temporary layoff, nor do they have to offer a factor for the lay-off. (They may, however, be required to do these things under a cumulative arrangement or an employment contract.)

Under the ESA, a “short-term 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 duration of 20 consecutive weeks, but less than 35 weeks of layoff in any period of 52 consecutive weeks, where:- the staff member continues to receive substantial payments from the employer;
or

– the company continues to pay for the benefit of the employee under a legitimate group or worker insurance strategy (such as a medical or drug insurance coverage plan) or a legitimate retirement or pension plan;
or

– the worker gets extra unemployment benefits;
or

– the staff member would be entitled to get supplementary unemployment benefits however isn’t getting them since they are employed elsewhere;
or

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

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

3. a layoff longer than a layoff explained in ‘B’ where the employer recalls an employee who is represented by a trade union within the time set out in a contract in between the union and the company.

If a worker is laid off for a period longer than a temporary layoff as set out above, the company is considered to have ended the worker’s work. Generally, the worker will then be entitled to termination pay.

Written notice of termination and termination pay

Under the ESA, an employer can end the employment of an employee who has actually been employed constantly for three months or more if either:

– the company has given the worker appropriate composed notice of termination and the notification period has actually ended

– the company pays termination pay to the employee where no written notification or less notice than is required is given

Written notification of termination

A worker is entitled to discover of termination (or termination pay rather of notice) if they have actually been constantly used for at least three months. A person is thought about “employed” not just while they are actively working, but also during whenever 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 amount of notification to which a worker is entitled depends upon their “duration of work”. A worker’s period of work consists of not just perpetuity while the worker is actively working however likewise any time that they are not working but the employment relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a lay-off, the staff member’s work is considered (or thought about) to have actually been terminated on the 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 staff member might still be employed for purposes of the “continuously utilized for 3 months” credentials

– if two different durations of work are separated by more than 13 weeks, just the most current duration counts for purposes of notification of termination

It is possible, in some situations, for a person to have been “continuously employed” for three months or more and yet have a duration of work of less than three months. In such situations, the employee would be entitled to see because an employee who has been constantly utilized 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 notification required:

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

Requirements throughout the statutory notification duration

During the statutory notice period, an employer should:

– 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 worker’s advantages strategies; and

– pay the staff member the incomes they are entitled to, employment which can not be less than the worker’s regular wages for a regular work week every week.

Regular rate

This is a worker’s rate of spend for each non-overtime hour of work in the worker’s work week.

Regular salaries

These are wages other than overtime pay, vacation pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and severance pay and certain contractual privileges.

Regular work week

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

Some employees do not have a routine work week. That is, they do not work the same variety of hours each week or they are paid on a basis aside from time. For these employees, the “routine earnings” for a “routine work week” is the typical quantity of the regular incomes made by the staff member in the weeks in which the worker worked during the duration of 12 weeks right away preceding the date the notification was given.

An employer is not allowed to set up a worker’s getaway time throughout the statutory notification period unless the employee-after receiving written notice of termination of employment-agrees to take their trip time throughout the notification period.

If an employer offers longer notice than is required, the statutory part of the notice duration is the tail end of the period that ends on the date of termination.

How to offer written notification

In the majority of cases, employment written notice of termination of employment need to be addressed to the staff member. It can be provided in individual or by mail, fax or e-mail, as long as delivery can be verified.

There are special rules for offering notice of termination if a worker has an agreement of employment or a collective arrangement that offers seniority rights that enable a worker who is to be laid off or whose employment is to be terminated to displace (” bump”) other employees.

In that case, the company should publish a notification in the office (where it will be seen by the staff members) setting out the names, seniority and task classification of those staff members the employer plans to terminate and the date of the proposed termination. The publishing of the notice is considered to be notification of termination, since the date of the publishing, to a staff member who is “bumped” by a worker named in the notice. However, this notification of termination need to still satisfy the length requirements set out in the ESA.

There are likewise special guidelines regarding how notice is provided when there is a mass termination.

Termination pay

An employee who does not receive the composed notice needed under the ESA should be offered termination pay in lieu of notice. Termination pay is a swelling amount payment equal to the routine salaries for a routine work week that a worker would otherwise have actually been entitled to throughout the composed notification duration. An employee makes trip pay on their termination pay. Employers should likewise continue to make whatever contributions would be needed to keep the advantages the worker would have been entitled to had they continued to be employed through the notification duration.

Example: Regular work week

Sarah has worked for three and a half years. Now her task has actually been removed and her employment has been ended. Sarah was not given any written notification of termination.

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

Sarah’s routine salaries for a routine work week are determined:

$ 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 computed:

4% of $2,400.00 = $96.00

Finally, her getaway 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 make sure ongoing coverage for any advantage or pension that applied to her for 3 weeks.

Example: No regular work week

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

Gerry’s employer removed his position and did not provide Gerry any composed notification of termination. Gerry was ill and off work for 2 of the 12 weeks instantly 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 average incomes per week are computed:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off sick for employment two weeks for that reason these weeks are not included in the computation of average 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 determined:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company must also make sure ongoing coverage for any advantage or pension that applied to him for four weeks.

When to pay termination pay

Termination pay must be paid to a worker either seven days after the worker’s employment is ended or on the employee’s next regular pay date, whichever is later on.

Mass termination

Special guidelines for notification of termination may apply in cases of mass termination (when a company is ending 50 or more workers at its facility within a four-week duration).

Meaning of “establishment”

An “facility” is an area at which the company continues organization. Separate locations can be considered one facility if either:

– they are located within the exact same town, or

– an employee at one area has legal seniority rights that extend to the other place, enabling the staff member to displace another staff member (also called “bumping rights”).

Effective October 26, 2023, in cases of mass termination, the term “establishment” includes a worker’s home, but only if the worker works from home and does not operate at any other area where the employer continues service.

This will require that workers who work exclusively from another location be thought about for addition in the count when figuring out whether 50 or more workers have been ended.

Note that where a worker performs work both from their home and from another place where the company carries on service (for instance, a workplace), their home is not included in the meaning of “facility”. Instead, the staff member is considered to have a connection to the workplace location and, therefore, for the function of mass termination, the staff member is consisted of with regard to that workplace location.

Example: where several locations are thought about one “facility”

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

For the purpose of mass termination, the company’s London workplace, London warehouse and Sabrina’s London home are considered one “establishment.”

Employer commitments in a mass termination

When a mass termination happens, the employer should finish and deliver the Form 1 (Notice of termination of work) to the Director of Employment Standards (Director) by:

– e-mail to [email protected].

– fax to (416) 326-7061.

– personal delivery 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 shipment can be verified.

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

Any notice to the affected employees is ruled out to have been offered until the Form 1 is received by the Director; simply put, notification of mass termination is not effective until the Director gets the Form 1.

In addition to offering workers with private notices of termination, the employer must, on the very first day of the notification duration:

– post a copy of the Form 1 provided to the Director in the office where it will pertain to the attention of the impacted staff members.

– offer a copy of the Form 1 to each impacted employee.

The quantity of notification workers must receive in a mass termination is not based on the employees’ length of employment, however on the variety of employees who have been ended. An employer needs to give:

– 8 weeks see if the employment of 50 to 199 employees is to be ended

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

– 16 weeks see if the work of 500 or more staff members is to be ended

Exception to the mass termination guidelines

The mass termination guidelines do not use if these two things apply:

– the variety of staff members whose work is being terminated represents not more than 10 per cent of the employees who have actually been employed for a minimum of three months at the establishment

– none of the terminations are brought on by the irreversible discontinuance of all or part of the company’s organization at the establishment

Mass termination: resignation by an employee

A staff member who has actually gotten termination notification under the mass termination rules who wishes to resign before the termination date offered in the employer’s notice must give the employer a minimum of one week’s composed notice of resignation if the staff member has actually been utilized for less than 2 years. If the work duration has been two years or more, the employee must provide at least two weeks’ written notice of resignation. However, the staff member does not have to notify of resignation if the company constructively dismisses the employee or breaches a term of the contract.

Temporary work after termination date in notification

A company can supply work to a worker who has been notified of termination on a temporary basis in the 13-week duration after the termination date set out in the notification without impacting the original date of the termination and without being needed to provide any further notification of termination to the worker when the short-term work ends.

If an employee works beyond the 13-week duration after the termination date and after that has their employment terminated, the worker will be entitled to a brand-new written notification of termination as if the previous notification had actually never ever been offered. The worker’s duration of employment will then likewise 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 commonly found in collective arrangements.

A staff member who has recall rights and who is entitled to termination pay because of a layoff of 35 weeks or more may select to:

– keep their recall rights and not be paid termination pay (or discontinuance wage, if they were entitled to discontinuance wage) at that time;
or

– quit their recall rights and get termination pay (and severance pay, if they were entitled to discontinuance wage).

If a staff member is entitled to both termination pay and discontinuance wage, they must make the same option for both.

If an employee who is not represented by a trade union chooses to keep their recall rights or fails to decide, the employer must send the amount of the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the money in trust.

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

If a worker picks to offer up their recall rights or if the recall rights end, the cash that is held in trust should be sent out to the staff member.

If the staff member accepts a recall back to work, the money that is kept in trust will be returned to the company.

Exemptions to see of termination or termination pay

Much of these exemptions are intricate. Please call the Employment Standards Information Centre, 1-800-531-5551, if you require more information. Please likewise refer to the special rule tool.

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

– is guilty of wilful misbehavior, disobedience or wilful disregard of responsibility that is not minor and has not been condoned by the employer. Note: “wilful” consists of when an employee planned the resulting consequence or acted recklessly if they knew or should have known the effects their conduct would have. Poor work conduct that is unintentional or unintentional is normally ruled out wilful;

– was worked with for employment a particular 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 task is finished; or

– the term ends or the job is not finished more than 12 months after the work began; or

– the employment continues for three months or more after the term expires or the task is completed;

See also: Employment Standards Self-Service Tool

Wrongful dismissal

Rights higher than ESA notice of termination, termination pay, discontinuance wage

The rules under the ESA about termination and severance of employment are minimum requirements. Some employees may have rights under the common law that are higher than the rights to notice of termination (or termination pay) and severance pay under the ESA. An employee may wish to sue their former employer in court for “wrongful dismissal”. Employees must be aware that they can not take legal action against a company for wrongful termination and submit a claim for termination pay or severance pay with the ministry for the same termination or severance of employment. A staff member must choose one or the other. Employees might wish to obtain legal advice concerning their rights.