Termination Of Employment

A variety of expressions are typically utilized to explain situations when employment is terminated. These consist of “let go,” “discharged,” “dismissed,” “fired” and “completely laid off.”

Under the Employment Standards Act, 2000 (ESA) a person’s work is terminated if the company:

– dismisses or stops employing a staff member, consisting of where a staff member is no longer used due to the personal bankruptcy or insolvency of the company;

– “constructively” dismisses an employee and the employee resigns, in action, within a sensible time;

– lays a worker 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 constantly utilized for three months, the company should provide the worker with either composed notice of termination, termination pay or a mix (as long as the notification and the variety of weeks of termination pay together equivalent the length of notification the employee is entitled to receive).

The ESA does not require an employer to offer a worker a reason their work is being terminated. There are, however, some situations where a company can not terminate a worker’s employment even if the employer is prepared to offer appropriate written notice or termination pay. For instance, 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 employee asking concerns about the ESA or working out a right under the ESA, such as declining to work in excess of the day-to-day or weekly hours of work optimums, or taking a leave of lack specified in the ESA. Please see the chapter on reprisals.

Getting approved for termination notice or pay in lieu

Certain staff members are not entitled to discover of termination or termination pay under the ESA. Examples include: employees who are guilty of wilful misbehavior, disobedience, or wilful disregard of responsibility that is not insignificant and has actually not been condoned by the company. Other examples include construction staff members, workers on momentary layoff, staff members who refuse an offer of affordable alternative employment and employees who have been employed less than three months.

There are a number of other exemptions to the termination of employment arrangements of the ESA. See “Exemptions to discover of termination or termination pay.” Please also refer to the special guideline tool.

The termination-of-employment guidelines are entirely separate from any entitlements a worker might have to be paid discontinuance wage under the ESA.

Constructive termination

A constructive dismissal may occur when an employer makes a substantial change to a fundamental term or condition of an employee’s work without the worker’s actual or implied permission.

For instance, a worker may be constructively dismissed if the company makes changes to the staff member’s conditions of employment that lead to a substantial reduction in wage or a considerable unfavorable change in such things as the employee’s work location, hours of work, authority, or position. Constructive dismissal might likewise include situations where a company bugs or abuses an employee, or an employer gives a worker an ultimatum to “stop or be fired” and the worker resigns in action.

The staff member would have to resign in action to the modification within a reasonable period of time in order for the company’s actions to be considered a termination of employment for purposes of the ESA.

Constructive termination is a complex and hard subject. To find out more on constructive termination, please get in touch with the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A staff member is on short-lived layoff when an employer cuts back or stops the worker’s work without ending their employment (for instance, laying somebody off sometimes when there is inadequate work to do). The mere truth that the employer does not define a recall date when laying the worker off does not necessarily indicate that the lay-off is not temporary. Note, nevertheless, that a lay-off, even if intended to be short-lived, might result in constructive dismissal if it is not enabled by the employment agreement.

For the functions of the termination provisions of the ESA, a “week of layoff” is a week in which the worker made less than half of what they would generally earn (or earns on average) in a week.

A week of layoff does not consist of any week in which the worker did not work for one or more days because the employee was unable or readily available to work, underwent disciplinary suspension, or was not offered with work because of a strike or lockout at their location of work or somewhere else.

Employers are not required under the ESA to supply staff members with a composed notice of a momentary layoff, nor do they have to offer a reason for the lay-off. (They may, nevertheless, be needed to do these things under a collective agreement or an employment agreement.)

Under the ESA, a “momentary layoff” can last:

1. not more than 13 weeks of layoff in any duration of 20 consecutive weeks;
or

2. more than 13 weeks in any period of 20 successive weeks, but less than 35 weeks of layoff in any period of 52 successive weeks, where:- the worker continues to get substantial payments from the company;
or

– the company continues to make payments for the advantage of the worker under a genuine group or employee insurance coverage strategy (such as a medical or drug insurance strategy) or a genuine retirement or pension plan;
or

– the staff member receives additional unemployment advantages;
or

– the worker would be entitled to receive supplemental joblessness advantages however isn’t receiving them due to the fact that they are used somewhere else;
or

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

– the employer remembers the employee within the time frame set out in a contract with an employee who is not represented by a trade union;
or

3. a layoff longer than a layoff described in ‘B’ where the company recalls a staff member who is represented by a trade union within the time set out in a contract between the union and the company.

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

Written notification of termination and termination pay

Under the ESA, an employer can end the work of an employee who has been utilized continuously for three months or more if either:

– the employer has actually provided the employee proper written notification of termination and the notification period has actually expired

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

Written notification of termination

A worker is entitled to see of termination (or termination pay instead of notice) if they have actually been constantly employed for a minimum of three months. A person is considered “utilized” not just while they are actively working, however likewise throughout at any time in which they are not working but the work relationship still exists (for employment example, time in which the worker is off sick or on leave or on lay-off).

The amount of notification to which a worker is entitled depends on their “period of employment”. A staff member’s period of work consists of not just perpetuity while the worker is actively working but likewise at 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 short-lived lay-off, the worker’s work 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 duration of employment, despite the fact that the worker might still be utilized for functions of the “continuously utilized for 3 months” certification

– if two different periods of work are separated by more than 13 weeks, only the most recent duration counts for employment functions of notice of termination

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

The following chart defines the amount of notice needed:

Note: Special guidelines figure out the amount of notice required when it comes to mass terminations – where the employment of 50 or employment more staff members is ended at a company’s facility within a four-week period.

Requirements during the statutory notice duration

During the statutory notification period, an employer needs to:

– not reduce 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 employee the wages they are entitled to, which can not be less than the employee’s routine earnings for a regular work week every week.

Regular rate

This is a staff member’s rate of pay for each non-overtime hour of operate in the staff member’s work week.

Regular earnings

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

Regular work week

For an employee who usually works the exact same variety of hours weekly, employment a regular work week is a week of that lots of hours, not including overtime hours.

Some staff members do not have a regular work week. That is, they do not work the same number of hours every week or they are paid on a basis aside from time. For these employees, the “regular wages” for a “routine work week” is the average amount of the regular earnings made by the employee 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 allowed to schedule a staff member’s vacation time during the statutory notification duration unless the employee-after getting written notice of termination of employment-agrees to take their holiday time throughout the notification duration.

If an employer provides longer notice than is needed, the statutory part of the notice duration 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 should be addressed to the employee. It can be provided face to face or by mail, fax or e-mail, as long as shipment can be verified.

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

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

There are likewise unique guidelines relating to how notice is supplied when there is a mass termination.

Termination pay

A staff member who does not receive the composed notice needed under the ESA needs to be offered termination pay in lieu of notice. Termination pay is a swelling sum payment equal to the regular earnings for a routine work week that an employee would otherwise have actually been entitled to during the composed notice duration. A worker makes holiday pay on their termination pay. should also continue to make whatever contributions would be required to maintain the advantages the employee would have been entitled to had they continued to be utilized through the notification duration.

Example: Regular work week

Sarah has worked for three and a half years. Now her job has been eliminated and her work has been ended. Sarah was not given any composed notification of termination.

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

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 calculated:

$ 800.00 X 3 weeks = $2,400.00

Then her holiday pay on her termination pay is calculated:

4% of $2,400.00 = $96.00

Finally, her holiday pay is added to her termination pay:

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The employer needs to likewise make sure ongoing coverage for any benefit or pension that used to her for 3 weeks.

Example: No routine work week

Gerry has worked at a retirement home for 4 years. He works each week, but his hours differ from week to week. His rate of pay is $25.00 an hour, and he is paid 6 percent getaway pay.

Gerry’s company removed his position and did not provide Gerry any written notice of termination. Gerry was ill and off work for two of the 12 weeks instantly preceding the day his employment was terminated. Gerry made $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 each week are determined:

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

His termination pay is calculated:

$ 180.00 × 4 weeks = $720.00

Then his vacation pay on his termination pay is computed:

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 employer should also guarantee continued protection for any advantage or pension plans that applied to him for four weeks.

When to pay termination pay

Termination pay should 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 might use in cases of mass termination (when an employer is ending 50 or more employees at its establishment within a four-week duration).

Meaning of “facility”

An “establishment” is a location at which the company carries on service. Separate places can be thought about one establishment if either:

– they lie within the same town, or

– a worker at one area has legal seniority rights that reach the other location, permitting the worker to displace another employee (also called “bumping rights”).

Effective October 26, 2023, in cases of mass termination, the term “establishment” consists of an employee’s home, however only if the worker works from home and does not operate at any other place where the company carries on company.

This will need that employees who work exclusively from another location be thought about for inclusion in the count when identifying whether 50 or more employees have been terminated.

Note that where a staff member carries out work both from their home and from another place where the employer continues service (for instance, employment an office), their home is not consisted of in the meaning of “facility”. Instead, employment the employee is thought about to have a connection to the workplace place and, therefore, for the purpose of mass termination, the employee is included with regard to that office place.

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

ABC Company has a workplace and a storage facility located in London, ON. Sabrina lives in London and works for ABC Company solely remotely: 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 considered one “establishment.”

Employer obligations in a mass termination

When a mass termination happens, the employer should finish and deliver 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 office on a day and at a time when it is open.

– mail shipment to the Director’s workplace, 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 notification to the impacted staff members is not considered to have actually been provided till the Form 1 is gotten by the Director; to put it simply, notification of mass termination is not efficient until the Director receives the Form 1.

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

– publish a copy of the Form 1 supplied to the Director in the workplace where it will come to the attention of the impacted employees.

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

The quantity of notice staff members need to get in a mass termination is not based on the employees’ length of employment, however on the number of workers who have been ended. An employer must provide:

– 8 weeks notice if the work of 50 to 199 employees is to be ended

– 12 weeks observe if the work of 200 to 499 staff members is to be ended

– 16 weeks discover if the work of 500 or more employees is to be ended

Exception to the mass termination rules

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

– the variety of workers whose employment is being ended represents not more than 10 per cent of the workers who have been utilized for a minimum of three months at the facility

– none of the terminations are caused by the irreversible discontinuance of all or part of the employer’s service at the establishment

Mass termination: resignation by a worker

A staff member who has gotten termination notification under the mass termination rules who wishes to resign before the termination date provided in the employer’s notice need to provide the company a minimum of one week’s written notice of resignation if the employee has been utilized for less than two years. If the employment duration has been 2 years or more, the worker needs to give a minimum of 2 weeks’ written notification of resignation. However, the employee does not need to notify of resignation if the employer constructively dismisses the staff member or breaches a regard to the contract.

Temporary work after termination date in notice

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

If a worker works beyond the 13-week duration after the termination date and after that has their employment ended, the employee will be entitled to a brand-new composed notification of termination as if the previous notice had never ever been given. The worker’s duration of work will then also include the duration 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 work. This right is commonly found in collective agreements.

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 select to:

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

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

If an employee is entitled to both termination pay and discontinuance wage, they must make the very same choice for both.

If a worker who is not represented by a trade union elects to keep their recall rights or fails to choose, the company should send out the amount of the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If an employee who is represented by a trade union elects to keep their recall rights or fails to choose, the company and the trade union must attempt to come to an arrangement to hold the termination pay (and severance pay, if any) in trust for the staff member. If they can not pertain to an arrangement, and the trade union advises the employer and the Director of Employment Standards in writing that efforts have stopped working, the company should send out 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 kept in trust should be sent out to the worker.

If the employee accepts a recall back to work, the cash that is held in trust will be gone back to the company.

Exemptions to observe of termination or termination pay

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

The notice 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 overlook of task that is not minor and has not been excused by the company. Note: “wilful” includes when an employee planned the resulting consequence or acted recklessly if they knew or must have known the impacts their conduct would have. Poor work conduct that is accidental or unintentional is generally not considered wilful;

– was worked with for a particular length of time or until the completion of a specific job. However, such a worker will be entitled to notice of termination or termination pay if:- the work ends before the term expires or the job is finished; or

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

– the work continues for 3 months or more after the term ends or the job is finished;

See also: Employment Standards Self-Service Tool

Wrongful termination

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

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 greater than the rights to observe of termination (or termination pay) and severance pay under the ESA. A worker might want to sue their former company in court for “wrongful termination”. Employees should understand that they can not take legal action against an employer for wrongful dismissal and sue for termination pay or severance pay with the ministry for the same termination or severance of employment. An employee should choose one or the other. Employees might wish to obtain legal recommendations concerning their rights.