Termination Of Employment
A number of expressions are typically used to describe situations when employment is terminated. These include “let go,” “discharged,” “dismissed,” “fired” and “completely laid off.”
Under the Employment Standards Act, 2000 (ESA) an individual’s employment is ended if the company:
– dismisses or stops utilizing a worker, consisting of where an employee is no longer employed due to the personal bankruptcy or insolvency of the employer;
– “constructively” dismisses an employee and the employee resigns, in response, within an affordable time;
– lays a staff member off for a period that is longer than a “temporary layoff”.
Most of the times, when a company ends the employment of an employee who has actually been continuously used for three months, the employer needs to supply the employee with either written notification of termination, termination pay or a mix (as long as the notification and the number of weeks of termination pay together equal the length of notification the staff member is entitled to get).
The ESA does not require an employer to provide an employee a reason their employment is being ended. There are, nevertheless, some circumstances where an employer can not end a worker’s employment even if the company is prepared to give appropriate composed notice or termination pay. For example, a company can not end somebody’s employment, or penalize them in any other method, if any part of the reason for the termination of employment is based upon the employee asking questions about the ESA or working out a right under the ESA, such as declining to work in excess of the everyday or weekly hours of work maximums, or taking a leave of absence specified in the ESA. Please see the chapter on reprisals.
Receiving termination notification or pay in lieu
Certain staff members are not entitled to observe of termination or termination pay under the ESA. Examples include: workers who are guilty of wilful misbehavior, disobedience, or wilful neglect of responsibility that is not trivial and has actually not been condoned by the employer. Other examples consist of construction employees, workers on temporary layoff, employees who refuse an offer of reasonable alternative work and employees who have actually been used less than three months.
There are a number of other exemptions to the termination of employment provisions of the ESA. See “Exemptions to notice of termination or termination pay.” Please also describe the special guideline tool.
The termination-of-employment rules are completely separate from any entitlements an employee might have to be paid discontinuance wage under the ESA.
Constructive termination
A constructive termination may happen when an employer makes a significant change to a fundamental term or condition of an employee’s employment without the worker’s actual or implied consent.
For instance, an employee might be constructively dismissed if the employer makes changes to the worker’s conditions of work that result in a considerable decrease in income or a significant unfavorable modification in such things as the worker’s work area, hours of work, authority, or position. Constructive termination might also consist of circumstances where a company pesters or abuses an employee, or an employer provides a staff member a demand to “give up or be fired” and the worker resigns in action.
The employee would need to resign in reaction to the change within a sensible amount of time in order for the employer’s actions to be considered a termination of work for functions of the ESA.
Constructive dismissal is a complex and hard subject. For more details on positive termination, please get in touch with the Employment Standards Information Centre at 1-800-531-5551.
Temporary layoff
A worker is on momentary layoff when an employer cuts back or stops the employee’s work without ending their work (for instance, laying somebody 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 worker off does not necessarily imply that the lay-off is not short-term. Note, however, that a lay-off, even if meant to be momentary, might result in constructive dismissal if it is not permitted 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 ordinarily make (or makes usually) in a week.
A week of layoff does not include any week in which the worker did not work for several days due to the fact that the employee was not able or readily available to work, went through disciplinary suspension, or was not supplied with work since of a strike or lockout at their place of work or somewhere else.
Employers are not required under the ESA to supply employees with a written notice of a momentary layoff, nor do they need to provide a reason for the lay-off. (They may, nevertheless, be needed to do these things under a cumulative contract or a work agreement.)
Under the ESA, a “momentary 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 period of 20 consecutive weeks, but less than 35 weeks of layoff in any duration of 52 consecutive weeks, where:- the worker continues to receive considerable payments from the employer;
or
– the employer continues to make payments for the advantage of the worker under a genuine group or worker insurance strategy (such as a medical or drug insurance strategy) or a legitimate retirement or pension strategy;
or
– the worker receives supplemental unemployment advantages;
or
– the staff member would be entitled to receive additional welfare but isn’t getting them since they are utilized somewhere else;
or
– the company remembers the worker to work within the time frame approved by the Director of Employment Standards;
or
– the company remembers the worker within the time frame set out in an arrangement with an employee who is not represented by a trade union;
or
3. a layoff longer than a layoff described in ‘B’ where the employer recalls an employee who is represented by a trade union within the time set out in an agreement between the union and the employer.
If a worker is laid off for a period longer than a temporary layoff as set out above, the employer is thought about to have terminated the worker’s work. Generally, the worker will then be entitled to termination pay.
Written notice of termination and termination pay
Under the ESA, an employer can terminate the work of a worker who has actually been utilized constantly for 3 months or more if either:
– the employer has actually given the worker proper written notice of termination and the notification period has actually expired
– the employer pays termination pay to the staff member where no composed notice or less notification than is required is provided
Written notification of termination
A worker is entitled to notice of termination (or termination pay rather of notice) if they have actually been constantly employed for at least three months. A person is thought about “employed” not only while they are actively working, however also during whenever in which they are not working but the employment relationship still exists (for example, time in which the employee is off sick or on leave or on lay-off).
The amount of notification to which a staff member is entitled depends upon their “period of employment”. An employee’s duration of employment includes not only all time while the employee is actively working but likewise whenever 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 worker’s employment is considered (or considered) to have actually been terminated on the first day of the lay-off-any time after that does not count as part of the staff member’s period of employment, despite the fact that the staff member might still be used for functions of the “continuously employed for three months” certification
– if 2 separate periods of employment are separated by more than 13 weeks, just the most recent period counts for functions of notice of termination
It is possible, in some circumstances, for a person to have actually been “constantly employed” for 3 months or more and yet have a period of employment of less than three months. In such circumstances, the worker would be entitled to notice since a worker who has actually been continually utilized for at least 3 months is entitled to see, and the minimum notification entitlement of one week applies to an employee with a period of work of any length less than one year.
The following chart defines the amount of notification needed:
Note: Special rules determine the quantity of notification required when it comes to mass terminations – where the employment of 50 or more employees is ended at a company’s establishment within a four-week period.
Requirements throughout the statutory notification duration
During the statutory notification period, an employer should:
– not minimize the staff member’s wage rate or modify any other term or condition of work;
– continue to make whatever contributions would be needed to preserve the worker’s advantages strategies; and
– pay the staff member the salaries they are entitled to, which can not be less than the employee’s regular salaries for a routine work week each week.
Regular rate
This is a staff member’s rate of pay for each non-overtime hour of work in the employee’s work week.
Regular earnings
These are wages aside from overtime pay, holiday pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and discontinuance wage and particular contractual privileges.
Regular work week
For a staff member who generally works the same variety of hours every week, a routine work week is a week of that lots of hours, not consisting of overtime hours.
Some workers do not have a routine work week. That is, they do not work the very same variety of hours each week or they are paid on a basis besides time. For these workers, the “routine earnings” for a “routine work week” is the average amount of the regular salaries earned by the staff member in the weeks in which the employee worked throughout the period of 12 weeks instantly preceding the date the notification was offered.
An employer is not permitted to schedule an employee’s vacation time throughout the statutory notification duration unless the employee-after receiving written notification of termination of employment-agrees to take their trip time during the notification duration.
If a company supplies longer notification than is required, the statutory part of the notice period is the tail end of the duration that ends on the date of termination.
How to provide written notice
In many cases, written notification of termination of work must be addressed to the employee. It can be supplied personally or by mail, fax or e-mail, as long as delivery can be validated.
There are special rules for providing notice of termination if a staff member has a contract of work or a cumulative contract that supplies seniority rights that permit a worker who is to be laid off or whose work is to be ended to displace (” bump”) other employees.
In that case, the employer should publish a notice in the work environment (where it will be seen by the workers) setting out the names, seniority and task category of those employees the company intends to terminate and the date of the proposed termination. The posting of the notification is considered to be notice of termination, since the date of the publishing, to a staff member who is “bumped” by a staff member called in the notification. However, this notice of termination must still satisfy the length requirements set out in the ESA.
There are also special rules concerning how notification is supplied when there is a mass termination.
Termination pay
An employee who does not get the composed notification required under the ESA should be offered termination pay in lieu of notice. Termination pay is a lump sum payment equivalent to the routine earnings for a routine work week that an employee would otherwise have actually been entitled to throughout the written notification period. A worker makes vacation pay on their termination pay. Employers must also continue to make whatever contributions would be needed to keep the benefits the worker would have been entitled to had they continued to be employed 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 actually been ended. Sarah was not provided any composed notice of termination.
Sarah worked 40 hours a week every week and was paid $20.00 an hour. She also got 4 percent getaway pay. Because she worked for more than 3 years however less than 4 years, she is entitled to 3 weeks’ pay in lieu of notification.
Sarah’s regular earnings for a routine work week are calculated:
$ 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 trip pay on her termination pay is calculated:
4% of $2,400.00 = $96.00
Finally, her getaway pay is contributed to her termination pay:
$ 2400.00 + $96.00 = $2,496.00
Result: Sarah is entitled to $2,496.00. The company needs to likewise make sure ongoing protection for any advantage or pension strategies that used to her for 3 weeks.
Example: No routine work week
Gerry has operated at a nursing home for four years. He works weekly, but 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 provide Gerry any written notice of termination. Gerry was ill and off work for 2 of the 12 weeks immediately preceding the day his work was terminated. Gerry made $1,800.00 in the 12 weeks before the day on which his employment ended.
Gerry is entitled to four weeks of termination pay.
Gerry’s typical revenues weekly are calculated:
$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off sick for 2 weeks for that reason these weeks are not consisted of in the calculation of average profits) = $180.00 a week
His termination pay is determined:
$ 180.00 × 4 weeks = $720.00
Then his getaway pay on his termination pay is computed:
6% of $720.00 = $43.20
Finally, his getaway pay is contributed to his termination pay:
$ 720.00 + $43.20 = $763.20
Result: Gerry is entitled to $763.20. The employer should likewise make sure continued protection for any advantage or pension strategies that used to him for four weeks.
When to pay termination pay
Termination pay must be paid to an employee either seven days after the worker’s work is terminated or on the staff member’s next routine pay date, whichever is later.
Mass termination
Special guidelines for notification of termination may use in cases of mass termination (when a company is terminating 50 or more employees at its facility within a four-week duration).
Meaning of “establishment”
An “facility” is a place at which the employer brings on organization. Separate locations can be thought about one establishment if either:
– they lie within the exact same town, or
– a worker at one area has legal seniority rights that reach the other location, allowing the staff member 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 just if the worker works from home and does not operate at any other area where the employer continues service.
This will need that workers who work exclusively remotely be thought about for addition in the count when determining whether 50 or more staff members have actually 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 example, an office), their home is not consisted of in the meaning of “facility”. Instead, the staff member is thought about to have a connection to the office area and, therefore, for the function of mass termination, the employee is consisted of with respect to that office area.
Example: where several locations are considered one “establishment”
ABC Company has an office and a warehouse located in London, ON. Sabrina resides in London and works for ABC Company solely remotely: she performs work for the company from home and does not work at the workplace.
For the function of mass termination, the business’s London office, London storage facility and Sabrina’s London home are thought about one “establishment.”
Employer commitments in a mass termination
When a mass termination happens, the company should complete and deliver the Form 1 (Notice of termination of work) to the Director of Employment Standards (Director) by:
– email 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 confirmed.
The office of the Director of Employment Standards is located on the 9th flooring, 400 University Avenue, Toronto ON M7A 1T7.
Any notice to the affected workers is ruled out to have been given till the Form 1 is gotten by the Director; simply put, notification of mass termination is ineffective until the Director receives the Form 1.
In addition to providing workers with individual notifications of termination, referall.us the company must, on the very first day of the notification duration:
– post a copy of the Form 1 offered to the Director in the office where it will come to the attention of the affected staff members.
– offer a copy of the Form 1 to each impacted staff member.
The amount of notification staff members should receive in a mass termination is not based on the staff members’ length of work, however on the variety of staff members who have been ended. A company needs to provide:
– 8 weeks observe if the work of 50 to 199 staff members is to be terminated
– 12 weeks see if the work of 200 to 499 workers 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 rules do not apply if these two things apply:
– the variety of staff members whose employment is being ended represents not more than 10 per cent of the workers who have been utilized for a minimum of 3 months at the
– none of the terminations are caused by the long-term discontinuance of all or part of the employer’s service at the facility
Mass termination: resignation by a worker
An employee who has actually received termination notification under the mass termination rules who wishes to resign before the termination date offered in the employer’s notification should offer 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 staff member needs to provide a minimum of 2 weeks’ written notice of resignation. However, the staff member does not have to give notification of resignation if the company constructively dismisses the employee or breaches a term of the agreement.
Temporary work after termination date in notification
A company can provide work to an employee who has been provided notice of termination on a momentary 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 provide any more notice of termination to the employee when the temporary work ends.
If an employee works beyond the 13-week duration after the termination date and after that has their work terminated, the staff member will be entitled to a new composed notice of termination as if the previous notification had actually never ever been offered. The employee’s period of employment will then likewise consist of the period of short-lived work.
Recall rights
A “recall right” is the right of a worker on a layoff to be called back to work by their company under a term or condition of work. This right is typically found in cumulative agreements.
An employee who has recall rights and who is entitled to termination pay because 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 discontinuance wage) at that time;
or
– offer up their recall rights and receive termination pay (and discontinuance wage, if they were entitled to discontinuance wage).
If a worker is entitled to both termination pay and severance pay, they need to make the very same option for both.
If an employee who is not represented by a trade union elects to keep their recall rights or fails to choose, the employer needs to send out the amount of the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the money in trust.
If an employee who is represented by a trade union elects to keep their recall rights or stops working to make an option, the company and the trade union should attempt to come to a plan to hold the termination pay (and discontinuance wage, if any) in trust for the worker. If they can not pertain to an arrangement, and the trade union recommends the employer and the Director of Employment Standards in writing that efforts have actually stopped working, the company should 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 quit their recall rights or if the recall rights expire, the cash that is held in trust needs to be sent out to the staff member.
If the worker accepts a recall back to work, the money that is kept in trust will be gone back to the company.
Exemptions to see of termination or termination pay
Many of these exemptions are complicated. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you require more info. Please also refer to the special guideline tool.
The notification 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 disregard of duty that is not trivial and has not been condoned by the company. Note: “wilful” includes when a staff member planned the resulting consequence or acted recklessly if they knew or ought to have known the effects their conduct would have. Poor work conduct that is unexpected or unintentional is normally not considered wilful;
– was worked with for a specific length of time or up until the conclusion of a particular job. However, such a staff member will be entitled to observe of termination or termination pay if:- the work ends before the term ends or the task is finished; or
– the term ends or the task is not completed more than 12 months after the employment started; or
– the work continues for 3 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 notification of termination, termination pay, severance pay
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 see of termination (or termination pay) and discontinuance wage under the ESA. A staff member may want to sue their former employer in court for “wrongful dismissal”. Employees must understand that they can not take legal action against a company for wrongful dismissal and file a claim for termination pay or severance pay with the ministry for the very same termination or severance of work. An employee must choose one or the other. Employees might want to get legal suggestions worrying their rights.
