Termination Of Employment
A variety of expressions are frequently used to describe circumstances when employment is ended. These consist of «let go,» «released,» «dismissed,» «fired» and «completely laid off.»
Under the Employment Standards Act, 2000 (ESA) an individual’s employment is ended if the employer:
– dismisses or stops employing a staff member, consisting of where an employee is no longer utilized due to the personal bankruptcy or insolvency of the employer;
– «constructively» dismisses an employee and the staff member resigns, in action, within an affordable time;
– lays a worker off for a duration that is longer than a «momentary layoff».
For the most part, when a company ends the work of a worker who has actually been constantly employed for three months, the employer must offer the employee with either written notification of termination, termination pay or a combination (as long as the notice and the variety of weeks of termination pay together equivalent the length of notice the employee is entitled to receive).
The ESA does not need an employer to offer an employee a reason why their work is being ended. There are, however, some situations where an employer can not terminate an employee’s employment even if the employer is prepared to offer correct composed notice or termination pay. For example, a company can not end employment, or punish them in any other method, if any part of the reason for the termination of work is based upon the employee asking concerns about the ESA or exercising a right under the ESA, such as refusing to work in excess of the everyday or weekly hours of work optimums, or taking a leave of lack specified in the ESA. Please see the chapter on reprisals.
Getting approved for termination notification or pay in lieu
Certain workers are not entitled to discover of termination or termination pay under the ESA. Examples consist of: workers who are guilty of wilful misconduct, employment disobedience, or wilful disregard of duty that is not insignificant and has actually not been excused by the employer. Other examples include building staff members, employees on short-lived layoff, staff members who decline a deal of affordable alternative work and staff members who have actually been employed less than 3 months.
There are a number of other exemptions to the termination of work arrangements of the ESA. See «Exemptions to discover of termination or termination pay.» Please likewise refer to the unique guideline tool.
The termination-of-employment rules are entirely separate from any entitlements a worker may have to be paid severance pay under the ESA.
Constructive termination
A positive termination may take place when an employer makes a substantial modification to a basic term or condition of a staff member’s employment without the worker’s actual or implied authorization.
For instance, a worker may be constructively dismissed if the company makes changes to the staff member’s conditions of work that lead to a substantial decrease in wage or a significant unfavorable modification in such things as the employee’s work place, hours of work, authority, or position. Constructive termination may likewise consist of circumstances where a company harasses or abuses an employee, or a company provides an employee a final notice to «give up or be fired» and the employee resigns in response.
The staff member would have to resign in response to the modification within a reasonable amount of time in order for the employer’s actions to be thought about a termination of employment for functions of the ESA.
Constructive termination is a complex and difficult subject. To find out more on constructive dismissal, please call the Employment Standards Information Centre at 1-800-531-5551.
Temporary layoff
A staff member is on temporary layoff when an employer cuts back or stops the employee’s work without ending their work (for example, laying someone off at times when there is insufficient work to do). The mere reality that the employer does not define a recall date when laying the employee off does not necessarily imply that the lay-off is not temporary. Note, however, that a lay-off, even if planned to be momentary, may lead to positive dismissal 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 worker earned less than half of what they would ordinarily make (or earns typically) in a week.
A week of layoff does not consist of any week in which the staff member did not work for one or more days because the staff member was unable or offered to work, was subject to disciplinary suspension, or was not supplied with work since of a strike or lockout at their place of work or elsewhere.
Employers are not needed under the ESA to supply workers with a composed notification of a short-lived layoff, nor do they need to provide a reason for the lay-off. (They may, however, be needed to do these things under a cumulative agreement 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 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 consecutive weeks, where:- the staff member continues to receive substantial payments from the company;
or
– the employer continues to pay for the benefit of the worker under a genuine group or staff member insurance strategy (such as a medical or drug insurance coverage plan) or a legitimate retirement or pension;
or
– the worker receives supplemental welfare;
or
– the employee would be entitled to receive supplementary joblessness benefits but isn’t receiving them due to the fact that they are employed somewhere else;
or
– the employer recalls the employee to work within the time frame authorized by the Director of Employment Standards;
or
– the company recalls the worker within the time frame set out in an arrangement with a staff member who is not represented by a trade union;
or
3. a layoff longer than a layoff explained in ‘B’ where the employer remembers a worker who is represented by a trade union within the time set out in an arrangement between the union and the employer.
If an employee is laid off for a duration longer than a temporary layoff as set out above, the employer is considered to have actually ended the employee’s work. Generally, the staff member will then be entitled to termination pay.
Written notice of termination and termination pay
Under the ESA, an employer can end the work of a staff member who has actually been utilized continuously for 3 months or more if either:
– the employer has offered the staff member appropriate 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 provided
Written notice of termination
A worker is entitled to see of termination (or termination pay rather of notification) if they have actually been constantly used for at least three months. A person is considered «employed» not just while they are actively working, however also during whenever in which they are not working but the employment relationship still exists (for instance, time in which the staff member is off sick or on leave or on lay-off).
The amount of notice to which an employee is entitled depends upon their «period of work». A staff member’s period of work consists of not only all time while the employee is actively working however likewise 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 short-lived lay-off, the staff member’s employment is considered (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 duration of work, even though the employee may still be employed for functions of the «continually used for 3 months» qualification
– if two different durations of employment are separated by more than 13 weeks, just the most recent duration counts for purposes of notice of termination
It is possible, in some situations, for an individual to have actually been «continuously used» for three months or more and yet have a period of employment of less than three months. In such situations, the staff member would be entitled to discover since a staff member who has been constantly employed for a minimum of 3 months is entitled to notice, 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 defines the quantity of notice needed:
Note: Special rules figure out the quantity of notification required when it comes to mass terminations – where the employment of 50 or more workers is terminated at an employer’s establishment within a four-week duration.
Requirements during the statutory notification duration
During the statutory notification period, a company needs to:
– not minimize the employee’s wage rate or change any other term or condition of work;
– continue to make whatever contributions would be needed to keep the staff member’s advantages strategies; and
– pay the staff member the incomes they are entitled to, which can not be less than the worker’s routine salaries for a routine work week weekly.
Regular rate
This is a worker’s rate of spend for each non-overtime hour of operate in the staff member’s work week.
Regular wages
These are wages besides overtime pay, getaway pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of task pay, termination pay and discontinuance wage and certain contractual entitlements.
Regular work week
For a staff member who typically works the exact same number of hours weekly, a routine work week is a week of that numerous hours, not consisting of overtime hours.
Some staff members do not have a regular work week. That is, they do not work the same number of hours each week or they are paid on a basis other than time. For these workers, the «routine wages» for a «regular work week» is the average quantity of the regular wages earned by the worker in the weeks in which the staff member worked throughout the period of 12 weeks instantly preceding the date the notice was provided.
An employer is not allowed to schedule an employee’s getaway time during the statutory notification period unless the employee-after receiving written notice of termination of employment-agrees to take their holiday time throughout the notice duration.
If a company offers longer notice than is required, the statutory part of the notification period is the last part of the period that ends on the date of termination.
How to provide written notification
For the most part, composed notice of termination of work should be addressed to the staff member. It can be provided face to face or by mail, fax or e-mail, as long as shipment can be validated.
There are special rules for offering notice of termination if a worker has an agreement of employment or a cumulative agreement that offers seniority rights that permit a staff member 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 workers) setting out the names, seniority and job category of those staff members the company means to end and the date of the proposed termination. The publishing of the notice is considered to be notice of termination, as of the date of the publishing, to a worker who is «bumped» by a staff member called in the notification. However, this notice of termination must still meet the length requirements set out in the ESA.
There are likewise special guidelines regarding how notice is provided when there is a mass termination.
Termination pay
A worker who does not get the written notice needed under the ESA needs to be provided termination pay in lieu of notice. Termination pay is a swelling sum payment equal to the routine wages for a regular work week that an employee would otherwise have been entitled to during the written notice duration. An employee makes vacation pay on their termination pay. Employers should also 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 duration.
Example: Regular work week
Sarah has worked for 3 and a half years. Now her job has actually been gotten rid of and her work has been ended. Sarah was not offered any composed notice of termination.
Sarah worked 40 hours a week weekly and was paid $20.00 an hour. She also received 4 per cent vacation pay. Because she worked for more than three years however less than 4 years, she is entitled to three weeks’ pay in lieu of notification.
Sarah’s routine incomes for a regular work week are determined:
$ 20.00 an hour X 40 hours a week = $800.00 a week
Her termination pay is determined:
$ 800.00 X 3 weeks = $2,400.00
Then her vacation pay on her termination pay is determined:
4% of $2,400.00 = $96.00
Finally, her trip pay is contributed 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 coverage for any benefit or pension that used to her for three weeks.
Example: No routine work week
Gerry has actually worked at a nursing home for 4 years. He works each week, however his hours differ 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 provide Gerry any composed notice of termination. Gerry was ill and off work for 2 of the 12 weeks right away preceding the day his work was terminated. Gerry made $1,800.00 in the 12 weeks before the day on which his work ended.
Gerry is entitled to 4 weeks of termination pay.
Gerry’s typical profits weekly are calculated:
$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off sick for employment two weeks therefore these weeks are not included in the estimation of average incomes) = $180.00 a week
His termination pay is computed:
$ 180.00 × 4 weeks = $720.00
Then his getaway pay on his termination pay is calculated:
6% of $720.00 = $43.20
Finally, his vacation pay is added to his termination pay:
$ 720.00 + $43.20 = $763.20
Result: Gerry is entitled to $763.20. The employer needs to likewise ensure ongoing protection for any advantage or pension that applied to him for four weeks.
When to pay termination pay
Termination pay should be paid to a worker either 7 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 notice of termination might apply in cases of mass termination (when a company is ending 50 or more workers at its facility within a four-week period).
Meaning of «establishment»
An «establishment» is an area at which the company brings on service. Separate areas can be thought about one establishment if either:
– they lie within the same municipality, or
– a worker at one location has contractual seniority rights that encompass the other area, permitting the employee to displace another employee (likewise called «bumping rights»).
Effective October 26, 2023, in cases of mass termination, the term «facility» consists of a worker’s home, but just if the staff member works from home and does not operate at any other location where the company brings on organization.
This will need that workers who work solely remotely be considered for addition in the count when identifying whether 50 or more employees have actually been ended.
Note that where a worker carries out work both from their home and from another place where the company brings on organization (for instance, an office), their home is not included in the definition of «establishment». Instead, the staff member is thought about to have a connection to the workplace place and, therefore, for the function of mass termination, the employee is included with regard to that workplace area.
Example: where several locations are thought about one «facility»
ABC Company has an office and a warehouse situated in London, ON. Sabrina resides in London and works for ABC Company specifically from another location: she performs work for the business from home and does not operate at the workplace.
For employment the function of mass termination, the business’s London workplace, London storage facility and Sabrina’s London home are considered one «facility.»
Employer obligations in a mass termination
When a mass termination happens, the company needs to complete and provide the Form 1 (Notice of termination of employment) to the Director of Employment Standards (Director) by:
– e-mail to esa_form1_notice@ontario.ca.
– fax to (416) 326-7061.
– personal 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 found on the 9th floor, 400 University Avenue, Toronto ON M7A 1T7.
Any notice to the affected workers is ruled out to have been given until the Form 1 is gotten by the Director; to put it simply, notification of mass termination is not efficient till the Director receives the Form 1.
In addition to offering staff members with individual notices of termination, the company must, on the very first day of the notice duration:
– publish a copy of the Form 1 offered to the Director in the office where it will pertain to the attention of the affected staff members.
– offer a copy of the Form 1 to each affected staff member.
The quantity of notification staff members need to receive in a mass termination is not based upon the workers’ length of employment, but on the variety of employees who have actually been ended. An employer needs to provide:
– 8 weeks observe if the work of 50 to 199 workers 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 workers is to be ended
Exception to the mass termination rules
The mass termination guidelines do not use if these two things use:
– the number of staff members whose employment is being ended represents not more than 10 per cent of the employees who have actually been used for at least three months at the facility
– none of the terminations are triggered by the irreversible discontinuance of all or part of the company’s service at the establishment
Mass termination: resignation by a staff member
A worker who has actually gotten termination notification under the mass termination rules who wishes to resign before the termination date supplied in the company’s notification should provide the employer a minimum of one week’s written notification of resignation if the worker has been utilized for less than 2 years. If the work duration has actually been two years or more, the worker must give at least two weeks’ composed notification of resignation. However, the worker does not need to notify of resignation if the company constructively dismisses the staff member or breaches a term of the agreement.
Temporary work after termination date in notification
A company can provide work to a worker who has been notified of termination on a short-term basis in the 13-week duration after the termination date set out in the notification without affecting the original date of the termination and without being required to provide any more notification of termination to the staff member when the short-term work ends.
If a staff member 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 written notice of termination as if the previous notification had actually never been given. The staff member’s period of work will then likewise consist of the duration of temporary 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 discovered in cumulative agreements.
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 pick 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
– provide up their recall rights and receive termination pay (and severance pay, if they were entitled to discontinuance wage).
If a worker is entitled to both termination pay and discontinuance wage, they need to make the very same choice for both.
If a staff member who is not represented by a trade union elects to keep their recall rights or stops working to choose, the employer should send the quantity of the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the money in trust.
If a worker who is represented by a trade union chooses to keep their recall rights or stops working to decide, the company and the trade union need to try to come to a plan to hold the termination pay (and severance pay, if any) in trust for the worker. If they can not concern a plan, employment and the trade union recommends the company and the Director of Employment Standards in composing that efforts have actually failed, the employer needs to send the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.
If a worker picks to provide up their recall rights or if the recall rights expire, the cash that is held in trust must be sent to the employee.
If the worker accepts a recall back to work, the cash that is held in trust will be returned to the employer.
Exemptions to discover of termination or termination pay
A lot of these exemptions are complex. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you require more info. Please also describe the unique guideline tool.
The notification of termination and termination pay requirements of the ESA do not use to an employee who:
– is guilty of wilful misbehavior, disobedience or wilful neglect of duty that is not trivial and has actually not been condoned by the employer. Note: «wilful» consists of when a staff member meant the resulting repercussion or acted recklessly if they knew or ought to have understood the impacts their conduct would have. Poor work conduct that is unintentional or unintentional is normally ruled out wilful;
– was hired for a particular length of time or till the conclusion of a particular task. However, such a worker 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 expires or the task is not finished more than 12 months after the work began; or
– the employment continues for 3 months or more after the term expires or the job is completed;
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 staff members may have rights under the typical law that are higher than the rights to discover of termination (or termination pay) and discontinuance wage under the ESA. A staff member might wish to sue their previous employer in court for «wrongful termination». Employees need to be mindful that they can not sue an employer for wrongful termination and submit a claim for termination pay or severance pay with the ministry for the same termination or severance of employment. A worker must pick one or the other. Employees may want to get legal guidance concerning their rights.
