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Termination Of Employment

A number of expressions are typically used to describe scenarios when work is terminated. These include „let go,“ „discharged,“ „dismissed,“ „fired“ and „permanently laid off.“

Under the Employment Standards Act, 2000 (ESA) an individual’s employment is ended if the company:

– dismisses or stops utilizing a worker, including where a staff member is no longer employed due to the bankruptcy or insolvency of the company;

– „constructively“ dismisses an employee and the worker resigns, in action, within an affordable time;

– lays an employee off for a duration that is longer than a „momentary layoff“.

For the most part, when a company ends the work of an employee who has been continuously used for 3 months, the company must supply the employee with either written notice of termination, termination pay or a combination (as long as the notification and the number of weeks of termination pay together equal the length of notification the worker is entitled to get).

The ESA does not need a company to give a worker a reason why their employment is being terminated. There are, however, some circumstances where a company can not terminate a worker’s work even if the company is prepared to provide proper composed notice or termination pay. For example, an employer can not end somebody’s work, or punish them in any other method, if any part of the reason for the termination of work is based on the employee asking questions 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 maximums, or employment taking a leave of absence specified 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 include: employees who are guilty of wilful misbehavior, disobedience, or wilful neglect of task that is not trivial and has actually not been condoned by the employer. Other examples consist of building workers, employees on short-term layoff, employees who decline an offer of affordable alternative employment and workers who have been employed less than three months.

There are a variety of other exemptions to the termination of employment arrangements of the ESA. See „Exemptions to notice of termination or termination pay.“ Please likewise refer to the special guideline tool.

The termination-of-employment guidelines are totally different from any privileges a worker may need to be paid discontinuance wage under the ESA.

Constructive termination

A useful dismissal might occur when a company makes a significant modification to a fundamental term or condition of a worker’s work without the staff member’s actual or implied permission.

For example, an employee may be constructively dismissed if the employer makes changes to the staff member’s conditions of work that result in a considerable reduction in wage or a significant negative change in such things as the worker’s work location, hours of work, authority, or position. Constructive dismissal might also consist of circumstances where a company bugs or abuses an employee, or an employer offers an employee an ultimatum to „give up or be fired“ and the worker resigns in reaction.

The staff member would have to resign in response to the modification within a sensible duration of time in order for the company’s actions to be thought about a termination of work for purposes of the ESA.

Constructive dismissal is a complex and difficult subject. For more details on useful termination, please get in touch with the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A worker is on temporary layoff when a company cuts back or stops the worker’s work without ending their work (for instance, laying somebody off sometimes when there is inadequate work to do). The simple reality that the employer does not specify a recall date when laying the employee off does not always imply that the lay-off is not momentary. Note, however, that a lay-off, even if planned to be momentary, might result in constructive dismissal if it is not permitted by the employment agreement.

For the functions of the termination arrangements of the ESA, a „week of layoff“ is a week in which the worker made less than half of what they would generally earn (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 due to the fact that the staff member was not able or offered to work, was subject to disciplinary suspension, or was not offered with work since of a strike or lockout at their location of work or somewhere else.

Employers are not needed under the ESA to offer staff members with a written notification of a short-term layoff, nor do they have to offer a factor for the lay-off. (They may, however, be needed to do these things under a collective arrangement or an employment agreement.)

Under the ESA, a „short-lived layoff“ can last:

1. not more than 13 weeks of layoff in any duration of 20 successive weeks;
or

2. more than 13 weeks in any duration 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 employee under a genuine group or worker insurance coverage strategy (such as a medical or drug insurance coverage strategy) or a legitimate retirement or pension;
or

– the employee gets extra welfare;
or

– the worker would be entitled to receive supplementary joblessness advantages but isn’t receiving them because they are employed elsewhere;
or

– the employer recalls the employee to work within the time frame approved by the Director of Employment Standards;
or

– the employer recalls 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 remembers a worker who is represented by a trade union within the time set out in a contract in 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 terminated the employee’s employment. Generally, the employee will then be entitled to termination pay.

Written notification of termination and termination pay

Under the ESA, a company can terminate the work of an employee who has actually been used continually for three months or more if either:

– the employer has actually offered the worker proper composed notice of termination and the notice duration has actually expired

– the company pays termination pay to the employee where no composed notification or less notification than is needed is offered

Written notice of termination

An employee is entitled to discover of termination (or termination pay instead of notice) if they have actually been continually used for a minimum of three months. An individual is thought about „used“ not only while they are actively working, but also throughout any time in which they are not working however the work relationship still exists (for example, time in which the staff member is off sick or on leave or on lay-off).

The amount of notification to which an employee is entitled depends on their „duration of work“. An employee’s period of employment includes not only all time while the employee is actively working but also at any time 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 staff member’s work is considered (or 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 period of employment, although the staff member may still be employed for purposes of the „continually used for 3 months“ credentials

– if two separate durations of employment are separated by more than 13 weeks, just the most recent period counts for purposes of notice of termination

It is possible, employment in some scenarios, for a person to have been „continuously employed“ for 3 months or more and yet have a period of work of less than 3 months. In such scenarios, the worker would be entitled to notice because a worker who has been continually employed for at least 3 months is entitled to notice, employment and the minimum notice privilege of one week applies to a worker with a period of employment of any length less than one year.

The following chart defines the quantity of notification needed:

Note: Special rules figure out the quantity of notification needed in the case of mass terminations – where the work of 50 or more staff members is ended at an employer’s establishment within a four-week period.

Requirements throughout the statutory notification duration

During the statutory notice duration, an employer must:

– not decrease the employee’s wage rate or change any other term or condition of employment;

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

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

Regular rate

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

Regular wages

These are earnings aside from overtime pay, trip pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and discontinuance wage and particular legal privileges.

Regular work week

For an employee who typically works the same number of hours each week, a regular work week is a week of that many hours, not including overtime hours.

Some workers do not have a regular work week. That is, they do not work the very same variety of hours every week or they are paid on a basis other than time. For these workers, the „regular earnings“ for a „regular work week“ is the average quantity of the routine salaries made by the employee in the weeks in which the staff member worked throughout the duration of 12 weeks immediately preceding the date the notification was given.

A company is not enabled to set up a staff member’s holiday time during the statutory notice duration unless the employee-after getting composed notification of termination of employment-agrees to take their holiday time throughout the notification duration.

If an employer supplies longer notification than is required, the statutory part of the notice duration is the tail end of the period that ends on the date of termination.

How to supply written notification

For the most part, written notification of termination of employment need to be resolved to the worker. It can be provided personally or by mail, fax or e-mail, as long as shipment can be validated.

There are special guidelines for supplying notification of termination if a worker has a contract of work or a collective arrangement that supplies seniority rights that allow a worker who is to be laid off or whose employment is to be ended to displace (“ bump“) other workers.

In that case, the employer must post a notification in the office (where it will be seen by the staff members) setting out the names, employment seniority and job classification of those employees the employer plans to terminate and the date of the proposed termination. The posting of the notice is considered to be notice of termination, as of the date of the publishing, to an employee who is „bumped“ by an employee called in the notice. However, this notification of termination must still meet the length requirements set out in the ESA.

There are also special rules regarding how notification is offered when there is a mass termination.

Termination pay

An employee who does not receive the written notification needed under the ESA should be provided termination pay in lieu of notice. Termination pay is a swelling amount payment equal to the routine wages for a regular work week that a worker would otherwise have actually been entitled to throughout the written notice duration. An employee earns holiday pay on their termination pay. Employers must also continue to make whatever contributions would be required to keep the benefits the employee would have been entitled to had they continued to be utilized through the notice period.

Example: Regular work week

Sarah has actually worked for 3 and a half years. Now her task has been eliminated and her employment has actually been ended. Sarah was not provided any composed notification of termination.

Sarah worked 40 hours a week weekly and was paid $20.00 an hour. She likewise got four per cent trip pay. Because she worked for more than 3 years but less than 4 years, she is entitled to 3 weeks‘ pay in lieu of notice.

Sarah’s regular wages for a routine 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 getaway 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 guarantee continued protection for any advantage or pension that used to her for three weeks.

Example: No routine work week

Gerry has actually operated at a retirement home for 4 years. He works each week, however 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 removed his position and did not any written notification of termination. Gerry was ill and off work for two of the 12 weeks right away preceding the day his employment was ended. Gerry made $1,800.00 in the 12 weeks before the day on which his employment ended.

Gerry is entitled to 4 weeks of termination pay.

Gerry’s average profits each week are determined:

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

His termination pay is computed:

$ 180.00 × 4 weeks = $720.00

Then his holiday pay on his termination pay is calculated:

6% of $720.00 = $43.20

Finally, his vacation pay is contributed to his termination pay:

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer needs to also ensure continued protection for any advantage or pension plans that used to him for four weeks.

When to pay termination pay

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

Mass termination

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

Meaning of „facility“

An „facility“ is an area at which the company continues business. Separate places can be thought about one facility if either:

– they lie within the very same municipality, or

– an employee at one place has legal seniority rights that reach the other place, allowing the employee to displace another worker (also called „bumping rights“).

Effective October 26, 2023, in cases of mass termination, the term „facility“ consists of a staff member’s home, but just if the staff member works from home and does not work at any other place where the company continues business.

This will need that workers who work solely from another location be thought about for addition in the count when figuring out whether 50 or more employees have been terminated.

Note that where a worker carries out work both from their home and from another area where the company continues organization (for instance, an office), their home is not consisted of in the definition of „establishment“. Instead, the employee is considered to have a connection to the office place and, for that reason, for the purpose of mass termination, the worker is included with regard to that workplace location.

Example: where numerous areas are considered one „facility“

ABC Company has an office and a storage facility situated in London, ON. Sabrina lives in London and works for ABC Company solely from another location: she carries out work for the business from home and does not work at the workplace.

For the function of mass termination, the company’s London workplace, London storage facility and Sabrina’s London home are thought about one „establishment.“

Employer responsibilities in a mass termination

When a mass termination takes place, the company should 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 shipment 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 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 offered till the Form 1 is received by the Director; in other words, employment notification of mass termination is ineffective till the Director receives the Form 1.

In addition to providing staff members with individual notices of termination, the company must, on the first day of the notice period:

– publish a copy of the Form 1 supplied to the Director in the work environment where it will pertain to the attention of the impacted employees.

– supply a copy of the Form 1 to each impacted employee.

The amount of notification workers need to receive in a mass termination is not based on the workers‘ length of employment, but on the variety of employees who have actually been terminated. A company needs to offer:

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

– 12 weeks observe if the work of 200 to 499 workers is to be terminated

– 16 weeks see if the work of 500 or more employees is to be ended

Exception to the mass termination rules

The mass termination guidelines do not apply if these two things apply:

– the number of workers whose work is being terminated represents not more than 10 percent of the staff members who have been used for at least 3 months at the facility

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

Mass termination: resignation by a worker

An employee who has actually gotten termination notice under the mass termination guidelines who wants to resign before the termination date offered in the company’s notification need to offer the company a minimum of one week’s composed notice of resignation if the staff member has actually been employed for less than two years. If the employment period has actually been two years or more, the employee needs to give at least 2 weeks‘ written notice of resignation. However, the staff member does not have to notify of resignation if the employer constructively dismisses the worker or breaches a term of the agreement.

Temporary work after termination date in notification

A company can offer work to a staff member who has actually been notified of termination on a temporary 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 needed to supply any additional 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 then has their employment ended, the employee will be entitled to a brand-new written notification of termination as if the previous notice had actually never been offered. The staff member’s period of work will then likewise include the period of temporary work.

Recall rights

A „recall right“ is the right of a worker on a layoff to be called back to work by their employer under a term or condition of employment. 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 might choose 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

– quit their recall rights and receive termination pay (and severance pay, if they were entitled to severance pay).

If a worker is entitled to both termination pay and severance pay, they should make the same option for both.

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

If a worker who is represented by a trade union elects to keep their recall rights or stops working to decide, the company and the trade union should attempt to come to an arrangement to hold the termination pay (and severance pay, if any) in trust for the staff member. If they can not come to an arrangement, and the trade union advises the employer and the Director of Employment Standards in composing 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 money in trust.

If an employee selects to provide up their recall rights or if the recall rights end, the cash that is kept in trust must be sent to the worker.

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

Exemptions to notice of termination or termination pay

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

The notification of termination and termination pay requirements of the ESA do not apply to a worker who:

– is guilty of wilful misbehavior, disobedience or wilful disregard of duty that is not unimportant and has actually not been condoned by the company. Note: „wilful“ includes when an employee intended the resulting effect or acted recklessly if they understood or need to have understood the results their conduct would have. Poor work conduct that is accidental or unintended is usually not considered wilful;

– was employed for a particular length of time or until the completion of a particular job. However, employment such a worker will be entitled to see of termination or termination pay if:- the employment ends before the term expires or the task is finished; or

– the term expires or the job is not completed more than 12 months after the work started; or

– the employment continues for three months or more after the term expires or the task is completed;

See likewise: Employment Standards Self-Service Tool

Wrongful termination

Rights greater 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 may have rights under the common law that are greater than the rights to notice of termination (or termination pay) and discontinuance wage under the ESA. A worker may want to sue their previous employer in court for „wrongful dismissal“. Employees must be mindful that they can not sue an employer for wrongful dismissal and file a claim for termination pay or discontinuance wage 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 guidance concerning their rights.