Termination Of Employment

A variety of expressions are commonly used to explain situations when employment is terminated. These consist of “release,” “released,” “dismissed,” “fired” and “permanently laid off.”

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

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

– “constructively” dismisses an employee and the staff member resigns, in response, within an affordable time;

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

For the most part, when an employer ends the work of an employee who has actually been continually used for three months, the employer needs to supply the worker with either composed notification of termination, termination pay or a mix (as long as the notification and the number of weeks of termination pay together equivalent the length of notice the worker is entitled to get).

The ESA does not need a company to provide a staff member a factor why their work is being ended. There are, nevertheless, some circumstances where an employer can not terminate a worker’s employment even if the company is prepared to give proper written notification or termination pay. For example, an employer can not end someone’s work, or punish them in any other way, if any part of the reason for the termination of employment is based on the worker asking questions about the ESA or exercising a right under the ESA, such as refusing to work in excess of the day-to-day 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 notification or pay in lieu

Certain employees are not entitled to discover of termination or termination pay under the ESA. Examples consist of: staff members who are guilty of wilful misconduct, disobedience, or wilful disregard of task that is not unimportant and has not been condoned by the employer. Other examples include building and construction staff members, staff members on short-term layoff, staff members who decline an offer of reasonable alternative work and staff members who have 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 see of termination or termination pay.” Please also refer to the unique rule tool.

The termination-of-employment rules are completely separate from any privileges an employee may have to be paid severance pay under the ESA.

Constructive termination

A positive dismissal may happen when a company makes a considerable modification to an essential term or condition of a staff member’s employment without the worker’s actual or implied approval.

For instance, a staff member might be constructively dismissed if the company makes modifications to the staff member’s terms and conditions of employment that lead to a substantial decrease in income or a significant unfavorable change in such things as the worker’s work area, hours of work, authority, or position. Constructive termination may also consist of scenarios where a company bugs or abuses a staff member, or an employer offers a worker a demand to “stop or be fired” and the worker resigns in action.

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

Constructive dismissal is a complex and hard subject. For more details on useful termination, please contact the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A staff member is on temporary layoff when a company cuts down or stops the worker’s work without ending their employment (for instance, laying somebody off at times when there is inadequate work to do). The mere reality that the employer does not define a recall date when laying the employee off does not always mean that the lay-off is not short-term. Note, nevertheless, that a lay-off, even if planned to be momentary, might lead to constructive dismissal if it is not enabled by the employment contract.

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 ordinarily make (or earns usually) in a week.

A week of layoff does not include any week in which the worker did not work for several days since the staff member was not able or readily available to work, was subject to disciplinary suspension, or was not supplied with work since of a strike or lockout at their place of employment or in other places.

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

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

1. not more than 13 weeks of layoff in any duration 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 period of 52 successive weeks, where:- the staff member continues to receive substantial payments from the company;
or

– the employer continues to pay for the advantage of the staff member under a legitimate group or worker insurance strategy (such as a medical or drug insurance coverage strategy) or a legitimate retirement or pension plan;
or

– the worker receives supplemental joblessness benefits;
or

– the staff member would be entitled to receive additional joblessness advantages but isn’t receiving them because they are used somewhere else;
or

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

– the company recalls the worker within the time frame set out in 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 recalls a staff member 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 period longer than a momentary layoff as set out above, the employer is thought about to have actually terminated the staff member’s work. Generally, the staff member will then be entitled to termination pay.

Written notification of termination and termination pay

Under the ESA, a company can end the work of a worker who has actually been utilized constantly for 3 months or more if either:

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

– the employer pays termination pay to the worker where no composed notice or less notification than is required is given

Written notice of termination

A staff member is entitled to discover of termination (or termination pay rather of notification) if they have actually been continually employed for at least 3 months. A person is considered “employed” not only while they are actively working, but also during at any time in which they are not working however the work relationship still exists (for example, time in which the employee is off ill or on leave or on lay-off).

The amount of notice to which an employee is entitled depends on their “duration of employment”. A staff member’s duration of employment includes not only perpetuity while the staff member is actively working but 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 momentary lay-off, the staff member’s employment is considered (or thought about) to have been terminated on the very first day of the lay-off-any time after that does not count as part of the employee’s period of work, although the staff member might still be employed for purposes of the “continually utilized for 3 months” certification

– if 2 different periods of work are separated by more than 13 weeks, only the most recent period counts for purposes of notification of termination

It is possible, in some situations, for a person to have actually been “continuously used” for 3 months or more and yet have a duration of work of less than three months. In such scenarios, the employee would be entitled to see since an employee who has been continually employed for a minimum of 3 months is entitled to see, and the minimum notification privilege of one week uses to an employee with a duration of employment of any length less than one year.

The following chart specifies the amount of notification required:

Note: Special rules figure out the amount of notice needed in the case of mass terminations – where the employment of 50 or more staff members is ended at a company’s facility within a four-week duration.

Requirements during the statutory notification duration

During the statutory notification period, a company must:

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

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

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

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 wages

These are earnings besides overtime pay, getaway pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and discontinuance wage and particular contractual privileges.

Regular work week

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

Some workers do not have a regular work week. That is, they do not work the very same variety of hours weekly or they are paid on a basis aside from time. For these staff members, the “routine salaries” for a “routine work week” is the typical amount of the regular incomes made by the staff member in the weeks in which the staff member worked during the period of 12 weeks immediately preceding the date the notice was given.

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

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

How to provide written notice

For the most part, written notification of termination of work need to be addressed to the employee. It can be offered face to face or by mail, fax or email, as long as delivery can be verified.

There are special rules for providing notification of termination if an employee has a contract of work or a cumulative contract that provides seniority rights that permit a worker who is to be laid off or whose work is to be terminated to displace (” bump”) other employees.

Because case, the company must publish a notification in the workplace (where it will be seen by the employees) setting out the names, seniority and job classification of those employees the employer means to end and the date of the proposed termination. The posting of the notice is thought about to be notification of termination, as of the date of the posting, to a staff member who is “bumped” by an employee named in the notice. However, this notification of termination need to still satisfy the length requirements set out in the ESA.

There are also unique rules regarding how notification is supplied when there is a mass termination.

Termination pay

A worker who does not get the composed notification required under the ESA must be provided termination pay in lieu of notice. Termination pay is a lump amount payment equal to the regular salaries for a routine work week that a worker would otherwise have actually been entitled to throughout the composed notification duration. A staff member earns vacation pay on their termination pay. Employers must likewise continue to make whatever contributions would be required to maintain the advantages the employee would have been entitled to had they continued to be used through the notification duration.

Example: Regular work week

Sarah has worked for 3 and a half years. Now her task has actually been removed and her employment has been terminated. Sarah was not given any composed notice of termination.

Sarah worked 40 hours a week each week and was paid $20.00 an hour. She likewise got four percent getaway pay. Because she worked for more than 3 years but less than four years, she is entitled to 3 weeks’ pay in lieu of notice.

Sarah’s routine earnings for referall.us 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 trip pay on her termination pay is determined:

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 company needs to also guarantee ongoing coverage for any advantage or pension plans that applied to her for 3 weeks.

Example: No routine work week

Gerry has actually worked at a retirement home for four years. He works weekly, however his hours differ from week to week. His rate of pay is $25.00 an hour, and he is paid 6 per cent vacation pay.

Gerry’s employer eliminated his position and did not give Gerry any composed notice of termination. Gerry was ill and off work for 2 of the 12 weeks immediately preceding the day his work was ended. 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 calculated:

$ 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 average profits) = $180.00 a week

His termination pay is determined:

$ 180.00 × 4 weeks = $720.00

Then his trip pay on his termination pay is computed:

6% of $720.00 = $43.20

Finally, his trip pay is added to his termination pay:

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer must likewise ensure continued protection for any advantage or pension that used to him for 4 weeks.

When to pay termination pay

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

Mass termination

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

Meaning of “establishment”

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

– they are located within the same town, or

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

Effective October 26, 2023, in cases of mass termination, the term “establishment” includes an employee’s home, however only if the staff member works from home and does not work at any other area where the company continues company.

This will require that staff members who work solely remotely be thought about for addition in the count when figuring out whether 50 or more employees have actually been terminated.

Note that where a staff member carries out work both from their home and from another location where the company brings on organization (for example, a workplace), their home is not consisted of in the meaning of “facility”. Instead, the worker is thought about to have a connection to the workplace place and, therefore, for the function of mass termination, the staff member is included with respect to that workplace area.

Example: where multiple locations are considered one “facility”

ABC Company has a workplace and a warehouse located in London, ON. Sabrina resides in London and works for ABC Company specifically from another location: she carries out work for the company from home and does not operate at the office.

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

Employer obligations in a mass termination

When a mass termination occurs, the employer must finish 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 delivery to the Director’s office, if the delivery can be validated.

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

Any notice to the impacted workers is not considered to have been given till the Form 1 is received by the Director; simply put, notification of is ineffective up until the Director gets the Form 1.

In addition to offering employees with specific notices of termination, the company must, on the very first day of the notification duration:

– publish a copy of the Form 1 offered to the Director in the workplace where it will pertain to the attention of the affected workers.

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

The quantity of notice workers must get in a mass termination is not based on the staff members’ length of work, but on the variety of staff members who have actually been terminated. A company should provide:

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

– 12 weeks discover if the employment of 200 to 499 workers is to be terminated

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

Exception to the mass termination guidelines

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

– the variety of workers whose work is being ended represents not more than 10 percent of the staff members who have been employed 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 organization at the facility

Mass termination: resignation by an employee

A worker who has received termination notice under the mass termination rules who wishes to resign before the termination date supplied in the company’s notification must provide the employer at least one week’s composed notification of resignation if the employee has been utilized for less than 2 years. If the employment duration has been two years or more, the employee should provide a minimum of two weeks’ composed notification of resignation. However, the worker does not have 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 notification

A company can provide 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 supply any further notice of termination to the worker when the temporary work ends.

If an employee works beyond the 13-week duration after the termination date and then has their employment ended, the worker will be entitled to a new composed notice of termination as if the previous notification had never been provided. The worker’s duration of employment will then also include the period of short-lived work.

Recall rights

A “recall right” is the right of a staff member on a layoff to be recalled to work by their company under a term or condition of work. This right is frequently found in collective agreements.

A worker who has recall rights and who is entitled to termination pay since 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 discontinuance wage) at that time;
or

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

If a worker is entitled to both termination pay and severance pay, they must make the very same option for both.

If a staff member who is not represented by a trade union chooses to keep their recall rights or stops working to make a choice, the company needs to send out the amount of the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.

If a worker who is represented by a trade union elects to keep their recall rights or stops working to make a choice, the company and the trade union should try to come to an arrangement to hold the termination pay (and severance pay, if any) in trust for the worker. If they can not pertain to a plan, and the trade union encourages the company and the Director of Employment Standards in writing that efforts have actually stopped working, the company needs to send out the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the money in trust.

If a worker chooses to quit their recall rights or if the recall rights end, the cash that is kept in trust needs to be sent 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 company.

Exemptions to observe of termination or termination pay

A lot of these exemptions are intricate. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you need more info. Please also describe the special guideline tool.

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

– is guilty of wilful misconduct, disobedience or wilful neglect of task that is not insignificant and has actually not been excused by the employer. Note: “wilful” consists of when an employee meant the resulting repercussion or acted recklessly if they understood or ought to have understood the impacts their conduct would have. Poor work conduct that is accidental or unintended is typically ruled out wilful;

– was hired for a specific length of time or till the completion of a particular task. However, such an employee will be entitled to discover of termination or termination pay if:- the work ends before the term expires or the job is completed; or

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

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

See likewise: 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 staff members may have rights under the common law that are higher than the rights to see of termination (or termination pay) and severance pay under the ESA. A worker might wish to sue their former company in court for “wrongful dismissal”. Employees ought to 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 same termination or severance of work. A worker must pick one or the other. Employees may wish to get legal recommendations concerning their rights.