Termination Of Employment
A variety of expressions are frequently utilized to explain situations when employment is ended. These consist of «release,» «discharged,» «dismissed,» «fired» and «permanently laid off.»
Under the Employment Standards Act, 2000 (ESA) a person’s employment is ended if the company:
– dismisses or stops using an employee, including where a staff member is no longer utilized due to the personal bankruptcy or insolvency of the employer;
– «constructively» dismisses an employee and employment the staff member resigns, in action, within a sensible time;
– lays a staff member off for a duration that is longer than a «momentary layoff».
Most of the times, when an employer ends the employment of a worker who has actually been constantly utilized for 3 months, the company must supply the employee with either composed notification of termination, termination pay or a combination (as long as the notice and the variety of weeks of termination pay together equal the length of notice the worker is entitled to receive).
The ESA does not need an employer to give a staff member a reason their employment is being ended. There are, however, some circumstances where an employer can not end a staff member’s employment even if the employer is prepared to give appropriate composed notification 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 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 maximums, or taking a leave of absence specified in the ESA. Please see the chapter on reprisals.
Getting approved for termination notification or pay in lieu
Certain employees are not entitled to notice of termination or termination pay under the ESA. Examples consist of: staff members who are guilty of wilful misbehavior, disobedience, or wilful disregard of task that is not insignificant and has not been condoned by the company. Other examples include building and construction staff members, employees on momentary layoff, employees who refuse a deal of affordable alternative work and staff members who have actually been utilized less than three 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 likewise refer to the unique guideline tool.
The termination-of-employment rules are completely different from any privileges an employee may need to be paid severance pay under the ESA.
Constructive termination
A constructive termination might occur when a company makes a substantial modification to a fundamental term or condition of an employee’s employment without the worker’s real or implied approval.
For employment example, an employee might be constructively dismissed if the employer makes changes to the employee’s conditions of work that result in a substantial reduction in salary or a substantial negative change in such things as the employee’s work place, hours of work, authority, or position. Constructive dismissal might also include scenarios where a company bugs or employment abuses a staff member, or a company gives an employee an ultimatum to «give up or be fired» and the employee resigns in reaction.
The employee would have to resign in action to the change within a reasonable period of time in order for the employer’s actions to be thought about a termination of work for functions of the ESA.
Constructive dismissal is a complex and difficult topic. 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 momentary layoff when a company cuts down or stops the worker’s work without ending their employment (for example, laying someone off at times when there is insufficient work to do). The simple fact that the company does not define a recall date when laying the employee off does not necessarily imply that the lay-off is not momentary. Note, nevertheless, that a lay-off, even if meant to be short-lived, may result in constructive termination if it is not allowed by the employment agreement.
For the functions of the termination provisions of the ESA, a «week of layoff» is a week in which the employee made less than half of what they would generally make (or makes on average) in a week.
A week of layoff does not include any week in which the worker did not work for one or more days since the worker was unable or offered to work, underwent disciplinary suspension, or was not offered with work because of a strike or lockout at their location of work or elsewhere.
Employers are not required under the ESA to offer employees with a composed notice of a short-lived layoff, nor do they need to provide a factor for the lay-off. (They may, nevertheless, employment be needed to do these things under a collective arrangement or an employment agreement.)
Under the ESA, a «short-lived 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 successive weeks, but less than 35 weeks of layoff in any duration of 52 consecutive weeks, where:- the employee continues to get significant payments from the company;
or
– the company continues to make payments for the benefit of the staff member under a genuine group or staff member insurance plan (such as a medical or drug insurance coverage plan) or a genuine retirement or pension;
or
– the staff member receives supplemental unemployment advantages;
or
– the worker would be entitled to get supplementary unemployment advantages but isn’t getting them since they are used in other places;
or
– the company remembers the staff member to work within the time frame authorized by the Director of Employment Standards;
or
– the employer recalls the worker 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 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 staff member is laid off for employment a duration longer than a short-lived layoff as set out above, the employer is thought about to have actually terminated the employee’s employment. Generally, employment the worker will then be entitled to termination pay.
Written notification of termination and termination pay
Under the ESA, a company can terminate the work of a staff member who has actually been utilized continuously for three months or more if either:
– the employer has actually given the worker appropriate written notification of termination and the notification duration has ended
– the employer pays termination pay to the worker where no composed notification or less notification than is needed is offered
Written notification of termination
An employee is entitled to observe of termination (or termination pay rather of notice) if they have actually been constantly utilized for a minimum of 3 months. A person is considered «employed» not only while they are actively working, but also during any time in which they are not working however the employment relationship still exists (for instance, time in which the staff member 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 work consists of not only perpetuity while the employee is actively working but likewise at any time that they are not working however the work relationship still exists, with the following exceptions:
– if a lay-off goes on longer than a momentary lay-off, the staff member’s work is considered (or thought about) to have been ended on the very first day of the lay-off-any time after that does not count as part of the employee’s duration of work, despite the fact that the staff member may still be utilized for purposes of the «continuously employed for 3 months» certification
– if two separate periods 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 circumstances, for a person to have been «continuously employed» for 3 months or more and yet have a duration of employment of less than 3 months. In such situations, the worker would be entitled to discover because a staff member who has actually been constantly used for at least three months is entitled to discover, and the minimum notice privilege of one week uses to a worker with a period of work of any length less than one year.
The following chart specifies the amount of notice needed:
Note: Special guidelines determine the quantity of notice needed when it comes to mass terminations – where the work of 50 or more staff members is ended at an employer’s facility within a four-week duration.
Requirements throughout the statutory notice duration
During the statutory notification period, a company should:
– not reduce the staff member’s wage rate or change any other term or condition of work;
– continue to make whatever contributions would be required to maintain the worker’s benefits plans; and
– pay the employee the earnings they are entitled to, which can not be less than the employee’s routine wages for a routine work week every week.
Regular rate
This is a staff member’s rate of pay for each non-overtime hour of operate in the worker’s work week.
Regular salaries
These are salaries other than overtime pay, trip pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and severance pay and specific contractual privileges.
Regular work week
For an employee who typically works the same variety of hours each week, a regular work week is a week of that many hours, not including overtime hours.
Some workers do not have a routine work week. That is, they do not work the very same variety of hours weekly or they are paid on a basis besides time. For these employees, the «routine wages» for a «regular work week» is the typical quantity of the regular earnings made by the staff member in the weeks in which the worker worked during the period of 12 weeks immediately preceding the date the notice was offered.
An employer is not enabled to arrange a worker’s trip time during the statutory notification period unless the employee-after getting written notification of termination of employment-agrees to take their holiday time during the notification period.
If a company provides longer notice than is required, the statutory part of the notification duration is the last part of the duration that ends on the date of termination.
How to provide written notification
Most of the times, written notification of termination of employment need to be dealt with to the employee. It can be offered personally or by mail, fax or e-mail, as long as delivery can be verified.
There are unique rules for supplying notice of termination if a staff member has a contract of work or a collective agreement that provides seniority rights that enable an employee who is to be laid off or whose work is to be ended to displace (» bump») other employees.
In that case, the employer needs to publish a notification in the workplace (where it will be seen by the staff members) setting out the names, seniority and job classification of those employees the company plans to terminate and the date of the proposed termination. The posting of the notice is thought about to be notice of termination, since the date of the posting, to an employee who is «bumped» by a worker named in the notification. However, this notification of termination need to still fulfill the length requirements set out in the ESA.
There are likewise special rules relating to how notification is provided when there is a mass termination.
Termination pay
An employee who does not receive the composed notice required under the ESA should be provided termination pay in lieu of notification. Termination pay is a swelling sum payment equal to the regular wages for a regular work week that a staff member would otherwise have been entitled to throughout the composed notification duration. A worker makes holiday pay on their termination pay. Employers should likewise continue to make whatever contributions would be required to preserve the advantages the employee would have been entitled to had they continued to be utilized through the notification period.
Example: Regular work week
Sarah has actually worked for 3 and a half years. Now her task has actually 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 percent holiday pay. Because she worked for more than three years but less than four years, she is entitled to 3 weeks’ pay in lieu of notification.
Sarah’s regular earnings 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 trip pay on her termination pay is calculated:
4% of $2,400.00 = $96.00
Finally, her holiday pay is included to her termination pay:
$ 2400.00 + $96.00 = $2,496.00
Result: Sarah is entitled to $2,496.00. The company must also make sure continued protection for any advantage or pension that used to her for 3 weeks.
Example: No routine work week
Gerry has worked at a home for 4 years. He works each week, but his hours vary from week to week. His rate of pay is $25.00 an hour, and he is paid 6 per cent trip pay.
Gerry’s employer removed his position and did not offer Gerry any composed notification of termination. Gerry was ill and off work for 2 of the 12 weeks instantly 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 typical revenues per week are computed:
$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for 2 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 calculated:
6% of $720.00 = $43.20
Finally, his trip pay is contributed to his termination pay:
$ 720.00 + $43.20 = $763.20
Result: Gerry is entitled to $763.20. The company should likewise guarantee continued coverage for any benefit or pension that used to him for 4 weeks.
When to pay termination pay
Termination pay need to be paid to a worker either 7 days after the employee’s employment is terminated or on the worker’s next regular pay date, whichever is later on.
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 duration).
Meaning of «facility»
An «facility» is a place at which the employer carries on service. Separate places can be thought about one facility if either:
– they are situated within the very same municipality, or
– a worker at one location has legal seniority rights that reach the other place, enabling the worker to displace another worker (also called «bumping rights»).
Effective October 26, 2023, in cases of mass termination, the term «establishment» includes a worker’s home, however only if the staff member works from home and does not operate at any other location where the employer continues organization.
This will require that staff members who work exclusively remotely be considered for addition in the count when figuring out whether 50 or more workers have been ended.
Note that where a staff member carries out work both from their home and from another place where the company continues organization (for instance, a workplace), their home is not included in the meaning of «establishment». Instead, the worker is thought about to have a connection to the office area and, therefore, for the function of mass termination, the staff member is consisted of with respect to that office place.
Example: where several places are considered one «establishment»
ABC Company has a workplace and a storage facility located in London, ON. Sabrina lives in London and works for ABC Company specifically from another location: she carries out work for the company from home and does not work 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 responsibilities in a mass termination
When a mass termination occurs, the company must complete and provide the Form 1 (Notice of termination of work) to the Director of Employment Standards (Director) by:
– e-mail to esa_form1_notice@ontario.ca.
– fax to (416) 326-7061.
– personal shipment 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 validated.
The office of the Director of Employment Standards is found on the 9th floor, 400 University Avenue, Toronto ON M7A 1T7.
Any notification to the impacted employees is not thought about to have been offered till the Form 1 is gotten by the Director; simply put, notice of mass termination is not reliable until the Director gets the Form 1.
In addition to providing workers with private notifications of termination, the company must, on the first day of the notification duration:
– publish a copy of the Form 1 provided to the Director in the office where it will come to the attention of the affected workers.
– supply a copy of the Form 1 to each impacted staff member.
The amount of notification staff members must receive in a mass termination is not based on the employees’ length of work, however on the variety of employees who have actually been terminated. An employer 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 employees is to be ended
– 16 weeks observe if the work of 500 or more employees is to be ended
Exception to the mass termination guidelines
The mass termination rules do not use if these 2 things use:
– the number of staff members whose work is being terminated represents not more than 10 per cent of the staff members who have actually been used for a minimum of 3 months at the facility
– none of the terminations are triggered by the irreversible discontinuance of all or part of the company’s organization at the establishment
Mass termination: resignation by a worker
An employee who has received termination notification under the mass termination guidelines who desires to resign before the termination date offered in the employer’s notice must offer the company at least one week’s written notification of resignation if the worker has been utilized for less than two years. If the work duration has been 2 years or more, the staff member must give a minimum of two weeks’ composed notification of resignation. However, the employee does not have to notify of resignation if the employer constructively dismisses the staff member or breaches a regard to the agreement.
Temporary work after termination date in notice
An employer can offer work to a staff member who has actually been given notification of termination on a temporary basis in the 13-week period after the termination date set out in the notice without impacting the initial date of the termination and without being needed to supply any additional notice of termination to the worker when the short-term work ends.
If a worker works beyond the 13-week period after the termination date and then has their work terminated, the staff member will be entitled to a new composed notification of termination as if the previous notification had actually never been offered. The employee’s duration of work will then also consist of the period of short-lived work.
Recall rights
A «recall right» is the right of a worker on a layoff to be recalled to work by their employer under a term or condition of employment. This right is typically discovered in collective contracts.
A worker 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 choose to:
– keep their recall rights and not be paid termination pay (or employment discontinuance wage, if they were entitled to discontinuance wage) at that time;
or
– quit their recall rights and receive termination pay (and discontinuance wage, if they were entitled to discontinuance wage).
If an employee is entitled to both termination pay and severance pay, they need to make the very same option for both.
If a worker who is not represented by a trade union elects to keep their recall rights or stops working to make a choice, the employer needs to send out the quantity of the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.
If an employee who is represented by a trade union chooses to keep their recall rights or fails to make a choice, the employer and the trade union need to attempt to come to a plan to hold the termination pay (and severance pay, if any) in trust for the worker. If they can not come to an arrangement, and the trade union recommends the company and the Director of Employment Standards in writing that efforts have failed, the employer needs to send out the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the money in trust.
If an employee chooses to offer up their recall rights or if the recall rights end, the cash that is kept in trust needs to be sent out to the employee.
If the employee accepts a recall back to work, the money that is kept in trust will be gone back to the company.
Exemptions to discover of termination or termination pay
A number of these exemptions are complicated. Please call the Employment Standards Information Centre, 1-800-531-5551, if you need more information. Please also refer to the unique 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 duty that is not minor and has actually not been excused by the company. Note: «wilful» consists of when a staff member meant the resulting consequence or acted recklessly if they knew or must have understood the effects their conduct would have. Poor work conduct that is unexpected or unintentional is generally not considered wilful;
– was hired for a particular length of time or up until the completion of a particular task. However, such a staff member will be entitled to notice of termination or termination pay if:- the employment ends before the term ends or the task is finished; or
– the term ends or the job is not completed more than 12 months after the employment started; or
– the employment continues for 3 months or more after the term expires or the job is finished;
See likewise: Employment Standards Self-Service Tool
Wrongful termination
Rights higher than ESA notice of termination, termination pay, discontinuance wage
The guidelines under the ESA about termination and severance of work are minimum requirements. Some staff members may have rights under the typical law that are greater than the rights to discover of termination (or termination pay) and severance pay under the ESA. A worker might desire to sue their former employer in court for «wrongful dismissal». Employees must know 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 very same termination or severance of work. A staff member must select one or the other. Employees might wish to get legal suggestions concerning their rights.
