Termination Of Employment

A number of expressions are frequently utilized to explain circumstances when work is terminated. These include “release,” “discharged,” “dismissed,” “fired” and “permanently laid off.”

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

– dismisses or stops employing an employee, consisting of where a worker is no longer utilized due to the bankruptcy or insolvency of the employer;

– “constructively” dismisses an employee and the worker resigns, in reaction, within an affordable time;

– lays a worker off for a duration that is longer than a “short-term layoff”.

Most of the times, when an employer ends the work of an employee who has been continuously employed for 3 months, the employer must supply the worker with either written notification 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 notification the employee is entitled to receive).

The ESA does not require an employer to give an employee a reason that their employment is being terminated. There are, however, some scenarios where a company can not terminate an employee’s employment even if the company is prepared to provide correct written notice or termination pay. For instance, a company can not end somebody’s work, or punish them in any other method, if any part of the reason for the termination of employment is based on the staff member asking concerns about the ESA or working out a right under the ESA, such as declining to work in excess of the daily or weekly hours of work optimums, or taking a leave of absence 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 include: staff members who are guilty of wilful misconduct, disobedience, or wilful neglect of responsibility that is not minor and has actually not been excused by the employer. Other examples include building and construction staff members, employees on short-term layoff, workers who refuse a deal of sensible alternative employment and staff members who have been utilized less than 3 months.

There are a variety of other exemptions to the termination of employment provisions of the ESA. See “Exemptions to observe of termination or termination pay.” Please likewise describe the unique guideline tool.

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

Constructive dismissal

A positive dismissal may occur when a company makes a substantial modification to a fundamental term or condition of an employee’s work without the worker’s actual or implied approval.

For example, a worker may be constructively dismissed if the employer makes changes to the worker’s terms and conditions of employment that result in a considerable decrease in income or a substantial unfavorable modification in such things as the staff member’s work area, hours of work, authority, or position. Constructive termination might also include scenarios where an employer harasses or abuses a worker, or a company provides an employee a final notice to “give up or be fired” and the staff member resigns in response.

The employee 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 employment for of the ESA.

Constructive termination is a complex and hard topic. To find out more on constructive dismissal, please call the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

An employee is on short-lived layoff when an employer cuts back or stops the worker’s work without ending their work (for example, laying somebody off at times when there is not enough work to do). The mere reality that the company does not define a recall date when laying the employee off does not always indicate that the lay-off is not short-term. Note, however, that a lay-off, even if planned to be momentary, might result in constructive dismissal if it is not allowed by the work agreement.

For the functions 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 normally make (or job earns on average) in a week.

A week of layoff does not include any week in which the staff member did not work for several days since the worker was unable or readily available to work, underwent disciplinary suspension, or was not provided with work because of a strike or lockout at their place of work or somewhere else.

Employers are not required under the ESA to provide staff members with a composed notification of a short-term layoff, nor do they need to supply a reason for the lay-off. (They may, however, be required to do these things under a cumulative arrangement or an employment agreement.)

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

– the employer continues to make payments for the benefit of the worker under a legitimate group or staff member insurance plan (such as a medical or drug insurance strategy) or a genuine retirement or pension plan;
or

– the worker gets additional welfare;
or

– the staff member would be entitled to get supplementary joblessness advantages but isn’t receiving them since they are employed elsewhere;
or

– the employer remembers the staff member to work within the time frame authorized by the Director of Employment Standards;
or

– the employer remembers the staff member within the time frame set out in a contract with a worker 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 an arrangement between the union and the employer.

If a worker is laid off for a duration longer than a momentary layoff as set out above, the employer is considered to have ended the employee’s employment. 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 work of an employee who has actually been utilized continually for three months or more if either:

– the employer has offered the worker appropriate written notification of termination and the notice duration has actually ended

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

Written notification of termination

A staff member is entitled to observe of termination (or termination pay rather of notification) if they have been constantly utilized for at least three months. A person is thought about “utilized” not just while they are actively working, but also throughout any time in which they are not working however the work relationship still exists (for instance, time in which the staff member is off ill or on leave or on lay-off).

The quantity of notification to which an employee is entitled depends upon their “duration of employment“. An employee’s period of employment includes not only all time while the worker is actively working but likewise 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 deemed (or thought about) to have actually been ended on the first day of the lay-off-any time after that does not count as part of the employee’s period of work, although the employee might still be employed for functions of the “constantly utilized for 3 months” qualification

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

It is possible, in some situations, for an individual to have been “constantly used” for three months or more and yet have a duration of employment of less than 3 months. In such situations, the staff member would be entitled to notice since a worker who has been continuously employed for at least three months is entitled to observe, and the minimum notice privilege of one week applies to a worker with a duration of work of any length less than one year.

The following chart specifies the quantity of notice needed:

Note: Special guidelines figure out the amount of notification needed in the case of mass terminations – where the work of 50 or more staff members is ended at an employer’s establishment within a four-week period.

Requirements during the statutory notice duration

During the statutory notice duration, a company needs to:

– not decrease the worker’s wage rate or modify any other term or condition of employment;

– continue to make whatever contributions would be required to maintain the employee’s advantages strategies; and

– pay the staff member the wages 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 an employee’s rate of pay for each non-overtime hour of operate in the staff member’s work week.

Regular earnings

These are wages besides overtime pay, vacation pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and severance pay and specific legal entitlements.

Regular work week

For a worker who normally works the very same variety of hours weekly, a routine work week is a week of that lots of hours, not consisting of overtime hours.

Some staff members do not have a routine work week. That is, they do not work the exact same variety of hours every week or they are paid on a basis aside from time. For these employees, the “routine salaries” for a “regular work week” is the typical amount of the routine incomes earned by the worker in the weeks in which the staff member worked during the period of 12 weeks right away preceding the date the notice was provided.

An employer is not enabled to schedule a staff member’s trip time during the statutory notice period unless the employee-after getting composed notification of termination of employment-agrees to take their holiday time throughout the notice duration.

If a company offers longer notification than is needed, the statutory part of the notice duration is the last part of the duration that ends on the date of termination.

How to provide written notice

In many cases, written notification of termination of employment need to be addressed to the employee. It can be supplied personally or by mail, fax or email, as long as delivery can be verified.

There are unique guidelines for supplying notice of termination if a staff member has an agreement of work or a cumulative arrangement that supplies seniority rights that allow a staff member who is to be laid off or whose work is to be ended to displace (” bump”) other staff members.

In that case, the company should publish a notification in the office (where it will be seen by the workers) setting out the names, seniority and job category of those workers the employer means to end and the date of the proposed termination. The posting of the notification is thought about to be notice of termination, job since the date of the publishing, to an employee who is “bumped” by an employee called in the notification. However, this notification of termination need to still fulfill the length requirements set out in the ESA.

There are also special guidelines concerning how notification is offered when there is a mass termination.

Termination pay

A worker who does not get the written notice required under the ESA needs to be given termination pay in lieu of notice. Termination pay is a lump sum payment equivalent to the regular earnings for a regular work week that an employee would otherwise have been entitled to throughout the written notification period. An employee earns vacation pay on their termination pay. Employers must also continue to make whatever contributions would be needed to keep the benefits the employee would have been entitled to had they continued to be utilized through the notification duration.

Example: Regular work week

Sarah has actually worked for 3 and a half years. Now her job has actually been eliminated and her employment has been ended. Sarah was not provided any written notification of termination.

Sarah worked 40 hours a week each week and was paid $20.00 an hour. She likewise received 4 per cent holiday pay. Because she worked for more than 3 years however less than four years, she is entitled to 3 weeks’ pay in lieu of notification.

Sarah’s regular wages for a routine work week are computed:

$ 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 vacation pay on her termination pay is computed:

4% of $2,400.00 = $96.00

Finally, her vacation pay is included to her termination pay:

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The employer needs to also guarantee ongoing coverage for any advantage or pension strategies that applied to her for three weeks.

Example: No routine work week

Gerry has worked at a nursing home for 4 years. He works weekly, however his hours vary from week to week. His rate of pay is $25.00 an hour, and he is paid 6 percent trip pay.

Gerry’s company eliminated 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 ended. Gerry earned $1,800.00 in the 12 weeks before the day on which his employment ended.

Gerry is entitled to 4 weeks of termination pay.

Gerry’s average profits per week are determined:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for 2 weeks therefore these weeks are not consisted of in the estimation of typical earnings) = $180.00 a week

His termination pay is computed:

$ 180.00 × 4 weeks = $720.00

Then his vacation pay on his termination pay is determined:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer needs to likewise guarantee continued protection for any benefit or pension that applied to him for 4 weeks.

When to pay termination pay

Termination pay should be paid to a worker either 7 days after the employee’s work is ended or on the employee’s next regular pay date, whichever is later.

Mass termination

Special rules for notice of termination might use in cases of mass termination (when a company is terminating 50 or more staff members at its establishment within a four-week period).

Meaning of “establishment”

An “establishment” is an area at which the company continues service. Separate locations can be thought about one facility if either:

– they lie within the exact same municipality, or

– a worker at one location has legal seniority rights that extend to the other place, allowing the employee to displace another staff member (also called “bumping rights”).

Effective October 26, 2023, in cases of mass termination, the term “establishment” consists of a staff member’s home, but just if the employee works from home and does not operate at any other place where the employer carries on service.

This will require that staff members who work solely remotely be considered for inclusion in the count when identifying whether 50 or more workers have actually been terminated.

Note that where a staff member performs work both from their home and from another area where the company carries on service (for example, a workplace), their home is not included in the definition of “establishment”. Instead, the staff member is considered to have a connection to the office location and, for that reason, for the purpose of mass termination, the worker is consisted of with regard to that workplace place.

Example: where multiple places are thought about one “establishment”

ABC Company has an office and a warehouse situated 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 purpose of mass termination, the company’s London workplace, London storage facility and Sabrina’s London home are thought about one “establishment.”

Employer commitments in a mass termination

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

– email to [email protected].

– fax to (416) 326-7061.

– individual delivery 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 confirmed.

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

Any notice to the impacted employees is not considered to have been offered till the Form 1 is gotten by the Director; to put it simply, notice of mass termination is not effective up until the Director receives the Form 1.

In addition to offering staff members with individual notifications of termination, the company must, on the first day of the notification period:

– post a copy of the Form 1 supplied to the Director in the work environment where it will come to the attention of the impacted employees.

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

The amount of notification workers must receive in a mass termination is not based on the employees’ length of work, but on the variety of workers who have been ended. An employer must provide:

– 8 weeks notice if the work of 50 to 199 staff members is to be terminated

– 12 weeks notice if the employment of 200 to 499 employees is to be terminated

– 16 weeks discover if the work of 500 or more staff members is to be terminated

Exception to the mass termination guidelines

The mass termination guidelines do not apply if these 2 things use:

– the number of workers whose employment is being terminated represents not more than 10 per cent of the workers who have actually been used for a minimum of 3 months at the establishment

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

Mass termination: resignation by a worker

An employee who has actually received termination notice under the mass termination guidelines who desires to resign before the termination date supplied in the employer’s notice must offer the company at least one week’s written notification of resignation if the employee has actually been used for less than 2 years. If the work duration has actually been 2 years or more, the employee needs to provide at least 2 weeks’ composed notification of resignation. However, the employee does not have to notify of resignation if the employer constructively dismisses the employee or breaches a regard to the contract.

Temporary work after termination date in notice

An employer can supply work to an employee who has actually been notified of termination on a temporary 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 offer any additional notice of termination to the employee when the temporary work ends.

If a worker works beyond the 13-week period after the termination date and then has their work ended, the worker will be entitled to a new composed notification of termination as if the previous notice had actually never been provided. The staff member’s duration of employment will then likewise 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 work. This right is typically found in collective agreements.

An employee who has recall rights and who is entitled to termination pay because of a layoff of 35 weeks or more might select 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

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

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

If an employee who is not represented by a trade union elects to keep their recall rights or stops working to make an option, the employer should send the quantity of the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.

If a staff member who is represented by a trade union elects to keep their recall rights or fails to choose, the company and the trade union need to try to come to a plan to hold the termination pay (and severance pay, if any) in trust for the staff member. If they can not come to a plan, and the trade union encourages the company 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 staff member picks to provide up their recall rights or if the recall rights expire, the money that is held in trust should 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 returned to the company.

Exemptions to observe of termination or termination pay

A number of these exemptions are complicated. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you require more info. Please likewise refer to the unique rule tool.

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

– is guilty of wilful misbehavior, disobedience or wilful disregard of responsibility that is not unimportant and has actually not been excused by the employer. Note: “wilful” includes when a staff member meant the resulting consequence or acted recklessly if they understood or should have known the results their conduct would have. Poor work conduct that is unexpected or job unintentional is usually not thought about wilful;

– was worked with for a particular length of time or until the conclusion of a particular task. However, such an employee will be entitled to see of termination or termination pay if:- the employment ends before the term ends or the task is completed; or

– the term ends or the task is not finished more than 12 months after the employment started; or

– the work continues for three months or more after the term expires or the job is finished;

See also: Employment Standards Self-Service Tool

Wrongful dismissal

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

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 higher than the rights to see of termination (or termination pay) and discontinuance wage under the ESA. An employee might desire to sue their previous company in court for “wrongful termination”. Employees must understand that they can not sue a company for wrongful dismissal and sue for job termination pay or discontinuance wage with the ministry for the exact same termination or severance of work. A worker must pick one or the other. Employees might wish to acquire legal recommendations worrying their rights.