Termination Of Employment
A variety of expressions are commonly utilized to describe scenarios 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 work is terminated if the company:
– dismisses or stops utilizing a staff member, consisting of where a worker is no longer utilized due to the bankruptcy or insolvency of the employer;
– “constructively” dismisses a worker and the employee resigns, in action, within an affordable time;
– lays a worker off for a period that is longer than a “short-term layoff”.
In many cases, when an employer ends the employment of a staff member who has been continually utilized for 3 months, the company should supply the employee with either written notice of termination, termination pay or a mix (as long as the notice and the variety of weeks of termination pay together equal the length of notification the employee is entitled to get).
The ESA does not require a company to provide an employee a reason why their work is being ended. There are, however, some circumstances where a company can not terminate a worker’s work even if the employer is prepared to give appropriate written notice or termination pay. For example, an employer can not end somebody’s work, or penalize them in any other way, if any part of the reason for the termination of work is based on the staff member asking questions about the ESA or working out a right under the ESA, such as declining to work in excess of the day-to-day or employment weekly hours of work maximums, or taking a leave of absence defined in the ESA. Please see the chapter on reprisals.
Receiving termination notice or pay in lieu
Certain employees are not entitled to see of termination or termination pay under the ESA. Examples include: employees who are guilty of wilful misconduct, disobedience, or wilful overlook of duty that is not trivial and has not been condoned by the company. Other examples include building workers, employees on temporary layoff, workers who decline a deal of affordable alternative work and workers who have actually been utilized less than three months.
There are a variety of other exemptions to the termination of employment arrangements of the ESA. See “Exemptions to see of termination or termination pay.” Please likewise describe the unique guideline tool.
The termination-of-employment guidelines are completely different from any privileges an employee might have to be paid severance pay under the ESA.
Constructive dismissal
A positive termination may happen when an employer makes a significant modification to a basic term or condition of a worker’s work without the employee’s actual or implied approval.
For instance, a worker might be constructively dismissed if the company makes changes to the employee’s conditions of work that lead to a significant reduction in wage or a substantial unfavorable modification in such things as the worker’s work place, hours of work, authority, or position. Constructive dismissal might also consist of situations where an employer bugs or abuses an employee, or an employer provides an employee a demand to “stop or be fired” and the worker resigns in action.
The employee would have to resign in response to the change within a reasonable duration of time in order for the employer’s actions to be considered a termination of employment for purposes of the ESA.
Constructive termination is a complex and difficult subject. For more information on positive termination, please contact the Employment Standards Information Centre at 1-800-531-5551.
Temporary layoff
An employee is on momentary layoff when a company cuts back or stops the staff member’s work without ending their employment (for example, laying somebody off at times when there is not sufficient work to do). The simple truth that the employer does not specify a recall date when laying the staff member off does not necessarily suggest that the lay-off is not momentary. Note, however, that a lay-off, even if intended to be short-term, may lead to useful termination if it is not permitted by the work contract.
For the functions of the termination arrangements of the ESA, a “week of layoff” is a week in which the employee made less than half of what they would ordinarily make (or earns on average) in a week.
A week of layoff does not include any week in which the worker did not work for several days since the employee was not able or available to work, underwent disciplinary suspension, or was not provided with work because of a strike or lockout at their location of employment or somewhere else.
Employers are not required under the ESA to supply employees with a written notification of a short-lived layoff, nor do they have to offer a factor 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 “momentary layoff” can last:
1. not more than 13 weeks of layoff in any duration of 20 consecutive weeks;
or
2. more than 13 weeks in any duration of 20 consecutive weeks, but less than 35 weeks of layoff in any duration of 52 successive weeks, where:- the worker continues to get significant payments from the company;
or
– the company continues to pay for the benefit of the staff member under a genuine group or employee insurance coverage strategy (such as a medical or drug insurance plan) or a legitimate retirement or employment pension;
or
– the employee gets supplementary joblessness benefits;
or
– the staff member would be entitled to get supplemental welfare however isn’t getting them because 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 employee within the time frame set out in an arrangement with a worker who is not represented by a trade union;
or
3. a layoff longer than a layoff explained in ‘B’ where the employer remembers a staff member who is represented by a trade union within the time set out in a contract between the union and the company.
If a staff member is laid off for a duration longer than a short-term layoff as set out above, the employer is considered to have actually terminated the worker’s employment. Generally, the employee 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 staff member who has actually been used constantly for three months or more if either:
– the employer has provided the employee correct written notification of termination and employment the notification period has expired
– the company pays termination pay to the employee where no composed notification or less notification than is needed is given
Written notice of termination
An employee is entitled to see of termination (or termination pay rather of notification) if they have actually been continually used for a minimum of three months. An individual is considered “employed” not only while they are actively working, but likewise during any time in which they are not working however the work relationship still exists (for example, time in which the worker is off sick or on leave or on lay-off).
The amount of notification to which an employee is entitled depends upon their “duration of employment”. A worker’s duration of work includes not just all time while the employee is actively working however likewise whenever that they are not working however the employment relationship still exists, with the following exceptions:
– if a lay-off goes on longer than a temporary lay-off, the worker’s work is deemed (or employment thought about) to have actually 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 employment, even though the employee might still be used for purposes of the “continually used for 3 months” certification
– if two separate durations of work are separated by more than 13 weeks, only the most current period counts for purposes 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 work of less than 3 months. In such situations, the staff member would be entitled to discover due to the fact that a staff member who has actually been continually utilized for a minimum of three months is entitled to see, and the minimum notification privilege of one week applies to an employee with a duration of employment of any length less than one year.
The following chart defines the amount of notice required:
Note: Special rules identify the quantity of notification needed in the case of mass terminations – where the employment of 50 or more employees is ended at a company’s facility within a four-week period.
Requirements during the statutory notice duration
During the statutory notice period, a company needs to:
– not reduce the employee’s wage rate or modify any other term or condition of employment;
– continue to make whatever contributions would be required to maintain the staff member’s benefits strategies; and
– pay the employee the incomes they are entitled to, which can not be less than the employee’s regular earnings for a regular work week every week.
Regular rate
This is a staff member’s rate of spend for each non-overtime hour of operate in the staff member’s work week.
Regular incomes
These are salaries other than overtime pay, trip pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of task pay, termination pay and discontinuance wage and certain legal privileges.
Regular work week
For an employee who typically works the exact same number of hours weekly, a routine 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 exact same number of hours every week or they are paid on a basis other than 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 staff member worked during the period of 12 weeks instantly preceding the date the notice was given.
An employer is not allowed to schedule a staff member’s holiday time during the statutory notification duration unless the employee-after receiving written notice of termination of employment-agrees to take their holiday time throughout the notice period.
If a company supplies 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 offer written notification
In the majority of cases, written notification of termination of employment should be addressed to the worker. It can be offered in person or by mail, fax or email, as long as delivery can be confirmed.
There are special rules for offering notification of termination if an employee has an agreement of employment or a cumulative arrangement that supplies seniority rights that enable an employee who is to be laid off or whose employment is to be ended to displace (” bump”) other staff members.
Because case, the employer should post a notification in the work environment (where it will be seen by the employees) setting out the names, seniority and task classification of those staff members the company plans to terminate and the date of the proposed termination. The posting of the notice is considered to be notice of termination, since the date of the publishing, to a worker who is “bumped” by a worker named in the notice. However, this notification of termination should still meet the length requirements set out in the ESA.
There are likewise special guidelines relating to how notification is provided when there is a mass termination.
Termination pay
A staff member who does not get the composed notice required under the ESA needs to be offered termination pay in lieu of notification. Termination pay is a lump amount payment equal to the routine salaries for a regular work week that an employee would otherwise have been entitled to during the written notification period. An employee earns trip pay on their termination pay. Employers need to also continue to make whatever contributions would be required to preserve the benefits the staff member would have been entitled to had they continued to be used through the notification period.
Example: Regular work week
Sarah has worked for 3 and a half years. Now her job has been gotten rid of and her work has been ended. Sarah was not provided any composed notification of termination.
Sarah worked 40 hours a week every week and was paid $20.00 an hour. She likewise received 4 per cent getaway pay. Because she worked for more than three years however less than four years, she is entitled to 3 weeks’ pay in lieu of notification.
Sarah’s routine salaries for a regular work week are determined:
$ 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 getaway pay on her termination pay is calculated:
4% of $2,400.00 = $96.00
Finally, her vacation 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 likewise ensure continued coverage for any benefit or pension that used to her for three weeks.
Example: No routine work week
Gerry has actually operated at a nursing home for four years. He works every 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 vacation pay.
Gerry’s employer eliminated 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 employment was terminated. Gerry made $1,800.00 in the 12 weeks before the day on which his work ended.
Gerry is entitled to four weeks of termination pay.
Gerry’s typical incomes per week are computed:
$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for two weeks for that reason these weeks are not included in the computation of typical earnings) = $180.00 a week
His termination pay is calculated:
$ 180.00 × 4 weeks = $720.00
Then his holiday 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 employer should also guarantee continued protection for any advantage or pension that used to him for four weeks.
When to pay termination pay
Termination pay should be paid to an employee either seven days after the employee’s work is ended or on the employee’s next regular pay date, whichever is later.
Mass termination
Special rules for notification of termination may apply in cases of mass termination (when a company is terminating 50 or more employees at its establishment within a four-week period).
Meaning of “establishment”
An “establishment” is a place at which the company continues organization. Separate areas can be thought about one facility if either:
– they lie within the exact same town, or
– an employee at one location has legal seniority rights that reach the other area, enabling the staff member to displace another staff member (likewise called “bumping rights”).
Effective October 26, 2023, in cases of mass termination, the term “facility” includes a staff member’s home, however just if the staff member works from home and does not operate at any other place where the employer carries on service.
This will need that staff members who work solely from another location be considered for addition in the count when figuring out whether 50 or more employees have been terminated.
Note that where a staff member performs work both from their home and from another area where the employer continues organization (for example, an office), their home is not consisted of in the meaning of “facility”. Instead, the staff member is considered to have a connection to the office area and, therefore, for the purpose of mass termination, the employee is included with regard to that workplace area.
Example: where multiple places 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 solely from another location: 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 considered one “establishment.”
Employer responsibilities in a mass termination
When a mass termination happens, the company should finish and deliver the Form 1 (Notice of termination of employment) to the Director of Employment Standards (Director) by:
– email to esa_form1_notice@ontario.ca.
– fax to (416) 326-7061.
– individual delivery to the Director’s office on a day and at a time when it is open.
– mail delivery to the Director’s office, if the delivery can be confirmed.
The workplace of the Director of Employment Standards is located on the 9th floor, 400 University Avenue, Toronto ON M7A 1T7.
Any notification to the affected staff members is ruled out to have been provided till the Form 1 is gotten by the Director; simply put, notice of mass termination is not efficient up until the Director gets the Form 1.
In addition to providing staff members with individual notifications of termination, the employer must, on the first day of the notice period:
– post a copy of the Form 1 provided to the Director in the workplace where it will pertain to the attention of the affected staff members.
– supply a copy of the Form 1 to each affected worker.
The quantity of notice staff members must receive in a mass termination is not based upon the employees’ length of employment, but on the variety of employees who have actually been terminated. An employer must provide:
– 8 weeks discover if the work of 50 to 199 employees is to be terminated
– 12 weeks discover if the work of 200 to 499 staff members is to be ended
– 16 weeks notice if the employment of 500 or more employees is to be ended
Exception to the mass termination guidelines
The mass termination guidelines do not apply if these two things apply:
– the variety of employees whose employment is being terminated represents not more than 10 per cent of the staff members who have been employed for at least three months at the facility
– none of the terminations are brought on by the permanent discontinuance of all or part of the company’s organization at the facility
Mass termination: resignation by an employee
A staff member who has actually received termination notification under the mass termination guidelines who wishes to resign before the termination date offered in the employer’s notification must offer the company at least one week’s written notice of resignation if the employee has actually been used for less than two years. If the employment duration has been 2 years or more, the worker should provide a minimum of 2 weeks’ composed notification of resignation. However, the staff member does not need to notify of resignation if the employer constructively dismisses the staff member or breaches a regard to the contract.
Temporary work after termination date in notice
An employer can supply work to an employee who has actually been offered notification 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 required to offer any further notice of termination to the employee when the short-term work ends.
If a worker works beyond the 13-week period after the termination date and after that has their work terminated, the worker will be entitled to a new composed notification of termination as if the previous notification had never been provided. The employee’s duration of employment will then likewise include the duration 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 collective agreements.
A staff member who has recall rights and who is entitled to termination pay due to the fact that of a layoff of 35 weeks or more may choose 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
– provide up their recall rights and get termination pay (and severance pay, if they were entitled to severance pay).
If a worker is entitled to both termination pay and discontinuance wage, they must 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 stops working to make a choice, the employer must 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 staff member 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 must try to come to an arrangement to hold the termination pay (and severance pay, if any) in trust for the employee. If they can not come to a plan, and the trade union encourages the company and the Director employment of Employment Standards in writing that efforts have stopped working, the company must send the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.
If an employee picks to quit their recall rights or if the recall rights end, the cash that is held in trust must be sent out to the staff member.
If the employee accepts a recall back to work, the cash that is held in trust will be returned to the company.
Exemptions to notice of termination or termination pay
Much of these exemptions are intricate. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you require more information. Please also describe the unique rule tool.
The notice of termination and termination pay requirements of the ESA do not apply to an employee who:
– is guilty of wilful misconduct, disobedience or wilful neglect of task that is not trivial and has actually not been excused by the company. Note: “wilful” includes when a staff member intended the resulting effect or acted recklessly if they understood or should have understood the results their conduct would have. Poor employment work conduct that is accidental or unintended is generally not considered wilful;
– was employed for a particular length of time or till the completion of a specific job. However, such a staff member will be entitled to observe of termination or if:- the employment ends before the term expires or the job is completed; or
– the term ends or the job is not finished more than 12 months after the employment started; or
– the employment continues for three months or more after the term expires or the job is finished;
See likewise: Employment Standards Self-Service Tool
Wrongful dismissal
Rights higher than ESA notice of termination, termination pay, discontinuance wage
The guidelines under the ESA about termination and severance of employment are minimum requirements. Some staff members might have rights under the common law that are higher than the rights to notice of termination (or termination pay) and severance pay under the ESA. A worker might wish to sue their previous company in court for “wrongful dismissal”. Employees should know that they can not take legal action against an employer for employment wrongful dismissal and sue for termination pay or severance pay with the ministry for the very same termination or severance of work. A worker should choose one or the other. Employees may want to get legal suggestions worrying their rights.
