Termination Of Employment

A variety of expressions are commonly used to describe circumstances 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 work is ended if the employer:

– dismisses or stops employing a worker, consisting of where a staff member is no longer utilized due to the bankruptcy or insolvency of the company;

– « constructively » dismisses an employee and the staff member resigns, in reaction, within an affordable time;

– lays a worker off for a duration that is longer than a « temporary layoff ».

For the most part, when an employer ends the employment of a worker who has been constantly utilized for 3 months, the company needs to provide 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 equivalent the length of notification the staff member is entitled to get).

The ESA does not need a company to offer an employee a factor why their work is being terminated. There are, nevertheless, some circumstances where a company can not end an employee’s employment even if the company is prepared to offer proper composed notice or termination pay. For instance, a company can not end someone’s work, or punish them in any other method, if any part of the reason for the termination of employment is based on the worker asking concerns about the ESA or working out a right under the ESA, such as declining to work in excess of the daily or weekly hours of work optimums, or taking a leave of lack defined in the ESA. Please see the chapter on reprisals.

Receiving termination notice or pay in lieu

Certain employees are not entitled to observe of termination or termination pay under the ESA. Examples consist of: referall.us employees who are guilty of wilful misconduct, disobedience, or wilful overlook of task that is not trivial and has not been condoned by the company. Other examples consist of building and construction employees, employees on momentary layoff, staff members who decline an offer of reasonable alternative employment and workers who have been employed less than three months.

There are a number of other exemptions to the termination of work 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 entirely separate from any privileges an employee may need to be paid discontinuance wage under the ESA.

Constructive dismissal

A positive termination might occur when a company makes a substantial change to a basic term or condition of a worker’s work without the employee’s real or implied approval.

For instance, an employee may be constructively dismissed if the company makes modifications to the staff member’s terms and conditions of employment that result in a substantial decrease in salary or a significant unfavorable change in such things as the employee’s work location, hours of work, authority, or position. Constructive termination may likewise include circumstances where an employer harasses or abuses a worker, or a company gives an employee an ultimatum to « give up or be fired » and the staff member resigns in reaction.

The employee would need to resign in reaction to the change within a sensible time period in order for the company’s actions to be thought about a termination of work for purposes of the ESA.

Constructive termination is a complex and challenging topic. To find out more on constructive dismissal, please contact the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A staff member is on short-term layoff when a company cuts back or stops the employee’s work without ending their work (for example, laying somebody off at times when there is not enough work to do). The mere reality that the company does not specify a recall date when laying the employee off does not necessarily suggest that the lay-off is not short-term. Note, nevertheless, that a lay-off, even if planned to be short-lived, may lead to positive dismissal if it is not enabled 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 normally make (or makes on average) in a week.

A week of layoff does not consist of any week in which the worker did not work for one or more days since the staff member was unable or available to work, went through disciplinary suspension, or was not supplied with work because of a strike or lockout at their location of employment or in other places.

Employers are not required under the ESA to offer employees with a written notification of a short-lived layoff, nor do they need to provide a reason for the lay-off. (They may, however, be required to do these things under a collective contract 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 successive weeks, but less than 35 weeks of layoff in any duration of 52 successive weeks, where:- the worker continues to get substantial payments from the employer;
or

– the employer continues to make payments for the benefit of the worker under a legitimate group or employee insurance plan (such as a medical or drug insurance plan) or a genuine retirement or pension plan;
or

– the employee gets supplementary unemployment advantages;
or

– the worker would be entitled to receive supplementary joblessness advantages but isn’t getting them due to the fact that they are employed in other places;
or

– the company remembers the worker to work within the time frame approved by the Director of Employment Standards;
or

– the employer recalls the staff member within the time frame set out in an agreement 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 between the union and the company.

If an employee is laid off for a period longer than a short-term layoff as set out above, the company is considered to have terminated the worker’s employment. Generally, the worker will then be entitled to termination pay.

Written notification of termination and termination pay

Under the ESA, a company can terminate the employment of a staff member who has been used constantly for 3 months or more if either:

– the company has actually offered the employee appropriate composed notice of termination and the notice duration has actually ended

– the company pays termination pay to the employee where no written notification or less notice than is required is offered

Written notification of termination

A worker is entitled to discover of termination (or termination pay instead of notification) if they have been continually utilized for a minimum of 3 months. An individual is considered « employed » not only while they are actively working, however also throughout at any time in which they are not working but the employment relationship still exists (for instance, time in which the worker is off ill or on leave or on lay-off).

The amount of notification to which a worker is entitled depends on their « period of work ». An employee’s duration of work includes not only all time while the staff member is actively working but likewise any time that they are not working but the work relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a temporary lay-off, the worker’s work is considered (or considered) to have been terminated on the first day of the lay-off-any time after that does not count as part of the worker’s period of work, although the worker might still be used for purposes of the « continually utilized for 3 months » credentials

– if two separate periods of employment are separated by more than 13 weeks, only the most recent duration counts for purposes of notification of termination

It is possible, in some circumstances, for a person to have been « continually used » for 3 months or more and yet have a duration of employment of less than three months. In such scenarios, the worker would be entitled to discover since a staff member who has actually been continually used for at least three months is entitled to discover, and the minimum notice 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 amount of notice needed:

Note: Special guidelines identify the quantity of notice required when it comes to mass terminations – where the employment of 50 or more workers is ended at a company’s establishment within a four-week period.

Requirements during the statutory notification duration

During the statutory notification period, an employer must:

– not reduce the employee’s wage rate or modify any other term or condition of work;

– continue to make whatever contributions would be needed to maintain the worker’s benefits plans; and

– pay the employee the wages they are entitled to, which can not be less than the staff member’s routine wages for a regular work week each week.

Regular rate

This is a worker’s rate of spend for each non-overtime hour of work in the employee’s work week.

Regular salaries

These are wages other than overtime pay, getaway pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and severance pay and certain contractual entitlements.

Regular work week

For a staff member who typically works the exact same number of hours weekly, a regular work week is a week of that many hours, not consisting of overtime hours.

Some staff members do not have a routine work week. That is, they do not work the same variety of hours every week or they are paid on a basis other than time. For these workers, the « regular earnings » for a « routine work week » is the typical amount of the regular incomes earned by the staff member in the weeks in which the staff member worked throughout the period of 12 weeks instantly preceding the date the notice was provided.

A company is not allowed to set up a worker’s trip time during the statutory notification period unless the employee-after getting composed notification of termination of employment-agrees to take their holiday time throughout the notice period.

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

How to provide written notification

For the most part, written notification of termination of employment must be dealt with to the employee. It can be supplied personally or by mail, fax or e-mail, as long as delivery can be confirmed.

There are special rules for providing notice of termination if a worker has an agreement of employment or a collective contract that supplies seniority rights that allow an employee who is to be laid off or whose work is to be ended to displace ( » bump ») other staff members.

In that case, the employer should post a notice in the office (where it will be seen by the workers) 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 publishing of the notice is considered to be notification of termination, since the date of the posting, to a staff member who is « bumped » by an employee called in the notification. However, this notice of termination should still meet the length requirements set out in the ESA.

There are also special rules regarding how notice is provided when there is a mass termination.

Termination pay

A worker who does not get the composed notification required under the ESA should be given termination pay in lieu of notification. Termination pay is a swelling amount payment equivalent to the routine wages for a routine work week that a worker would otherwise have been entitled to during the composed notification period. A worker makes trip pay on their termination pay. Employers need to likewise continue to make whatever contributions would be required to maintain the benefits the staff member would have been entitled to had they continued to be used through the notice period.

Example: Regular work week

Sarah has actually worked for three and a half years. Now her task has actually been removed and her employment has been terminated. Sarah was not given any written notification of termination.

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

Sarah’s routine incomes 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 vacation pay on her termination pay is computed:

4% of $2,400.00 = $96.00

Finally, her getaway pay is included to her termination pay:

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The employer should likewise ensure ongoing protection for any benefit or that used to her for three weeks.

Example: No routine work week

Gerry has worked at a nursing home for 4 years. He works weekly, but his hours vary from week to week. His rate of pay is $25.00 an hour, and he is paid 6 percent trip pay.

Gerry’s employer eliminated his position and did not provide Gerry any written notification of termination. Gerry was ill and off work for 2 of the 12 weeks instantly preceding the day his employment was ended. Gerry earned $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 average earnings weekly are determined:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for two weeks therefore these weeks are not consisted of in the calculation of average earnings) = $180.00 a week

His termination pay is determined:

$ 180.00 × 4 weeks = $720.00

Then his trip pay on his termination pay is computed:

6% of $720.00 = $43.20

Finally, his getaway pay is included to his termination pay:

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company must likewise guarantee continued protection for any benefit or pension that applied to him for 4 weeks.

When to pay termination pay

Termination pay need to be paid to a staff member either 7 days after the worker’s employment is ended or on the employee’s next regular pay date, whichever is later on.

Mass termination

Special guidelines for notification of termination may use in cases of mass termination (when an employer is ending 50 or more workers at its facility within a four-week period).

Meaning of « establishment »

An « facility » is a place at which the company carries on company. Separate locations can be considered one establishment if either:

– they are situated within the very same municipality, or

– a staff member at one location has contractual seniority rights that encompass the other location, enabling the worker to displace another staff member (also called « bumping rights »).

Effective October 26, 2023, in cases of mass termination, the term « establishment » includes an employee’s home, but just if the worker works from home and does not operate at any other area where the employer brings on organization.

This will require that employees who work solely remotely be considered for addition in the count when figuring out whether 50 or more employees have 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, a workplace), their home is not consisted of in the definition of « establishment ». Instead, the worker is considered to have a connection to the workplace area and, therefore, for the purpose of mass termination, the employee is consisted of with regard to that workplace area.

Example: where numerous places are thought about one « facility »

ABC Company has a workplace and a warehouse located in London, ON. Sabrina resides in London and works for ABC Company specifically from another location: she 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 « facility. »

Employer obligations in a mass termination

When a mass termination occurs, the company should finish and provide 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 delivery to the Director’s office on a day and at a time when it is open.

– mail shipment to the Director’s workplace, if the delivery can be validated.

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

Any notification to the affected workers is ruled out to have actually been provided until the Form 1 is received by the Director; simply put, notice of mass termination is not reliable till the Director gets the Form 1.

In addition to offering employees with specific notifications of termination, the company must, on the very first day of the notice period:

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

– provide a copy of the Form 1 to each impacted worker.

The quantity of notification employees must get in a mass termination is not based on the employees’ length of employment, but on the number of workers who have actually been ended. A company needs to offer:

– 8 weeks discover if the employment of 50 to 199 staff members is to be ended

– 12 weeks see if the employment of 200 to 499 employees is to be ended

– 16 weeks observe if the work of 500 or more staff members is to be ended

Exception to the mass termination guidelines

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

– the variety of employees whose employment is being terminated represents not more than 10 percent of the staff members who have actually been utilized for a minimum of 3 months at the establishment

– none of the terminations are triggered by the permanent discontinuance of all or part of the employer’s service at the establishment

Mass termination: resignation by a worker

An employee who has gotten termination notice under the mass termination guidelines who wants to resign before the termination date offered in the employer’s notice should give the company at least one week’s composed notice of resignation if the worker has actually been used for less than two years. If the employment duration has been 2 years or more, the employee must offer at least 2 weeks’ composed notification of resignation. However, the worker does not have to give notification of resignation if the company constructively dismisses the worker or breaches a regard to the agreement.

Temporary work after termination date in notification

A company can provide work to a staff member who has actually been given notice of termination on a temporary basis in the 13-week duration after the termination date set out in the notification without affecting the initial date of the termination and without being required to provide any more notification of termination to the worker when the short-term work ends.

If an employee works beyond the 13-week period after the termination date and after that has their work ended, the employee will be entitled to a brand-new composed notice of termination as if the previous notification had never ever been given. The employee’s period of employment will then likewise consist of the period of temporary 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 cumulative 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 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

– offer up their recall rights and get termination pay (and severance pay, if they were entitled to discontinuance wage).

If a staff member is entitled to both termination pay and discontinuance wage, they must make the same option for both.

If a worker who is not represented by a trade union elects to keep their recall rights or fails to decide, the employer needs to send the quantity of the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.

If a staff member who is represented by a trade union elects to keep their recall rights or fails to make a choice, the company and the trade union should attempt to come to a plan to hold the termination pay (and severance pay, if any) in trust for the staff member. If they can not pertain to a plan, and the trade union encourages the company and the Director of Employment Standards in writing that efforts have failed, the company should send out the termination pay (and severance pay, 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 end, the money that is held in trust must be sent to the staff member.

If the employee accepts a recall back to work, the money that is held in trust will be returned to the company.

Exemptions to observe of termination or termination pay

A number of these exemptions are complicated. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you need more information. Please also describe the unique guideline tool.

The notification of termination and termination pay requirements of the ESA do not apply to an employee who:

– is guilty of wilful misbehavior, disobedience or wilful neglect of responsibility that is not unimportant and has not been excused by the employer. Note: « wilful » includes when a worker planned the resulting consequence or acted recklessly if they knew or need to have understood the effects their conduct would have. Poor work conduct that is accidental or unintended is typically ruled out wilful;

– was employed for a particular length of time or till the completion 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 expires or the job is not completed more than 12 months after the employment began; or

– the employment continues for 3 months or more after the term ends or the job is finished;

See also: Employment Standards Self-Service Tool

Wrongful termination

Rights greater than ESA notification of termination, termination pay, discontinuance wage

The rules under the ESA about termination and severance of employment are minimum requirements. Some employees may have rights under the common law that are higher than the rights to notice of termination (or termination pay) and discontinuance wage under the ESA. A staff member might want to sue their former employer in court for « wrongful dismissal ». Employees need to be aware that they can not take legal action against a company for wrongful dismissal and sue for termination pay or severance pay with the ministry for the same termination or severance of work. An employee must select one or the other. Employees may wish to obtain legal advice worrying their rights.