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Termination Of Employment

A number of expressions are commonly utilized to describe situations when employment is terminated. These consist of “release,” “released,” “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 employing an employee, consisting of where a worker is no longer used due to the personal bankruptcy or insolvency of the company;

– “constructively” dismisses a staff member and the employee resigns, in reaction, within an affordable time;

– lays an employee off for a period that is longer than a “short-lived layoff”.

For the most part, when an employer ends the work of an employee who has been constantly employed for three months, the company must provide the staff member with either composed notification of termination, termination pay or a combination (as long as the notification and the variety of weeks of termination pay together equivalent the length of notification the staff member is entitled to receive).

The ESA does not require a company to provide an employee a reason their employment is being ended. There are, nevertheless, some scenarios where a company can not terminate a staff member’s work even if the employer is prepared to offer appropriate written notification or termination pay. For instance, an employer can not end somebody’s work, or penalize them in any other method, if any part of the factor 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 day-to-day or weekly hours of work maximums, or employment taking a leave of lack 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: employees who are guilty of wilful misconduct, disobedience, or wilful neglect of responsibility that is not trivial and has not been condoned by the company. Other examples include building and construction employees, workers on temporary layoff, employees who refuse an offer of sensible alternative employment and staff members who have actually been used 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 likewise refer to the unique rule tool.

The termination-of-employment guidelines are entirely separate from any entitlements a worker may have to be paid severance pay under the ESA.

Constructive termination

A positive dismissal might happen when a company makes a substantial modification to an essential term or condition of a worker’s employment without the employee’s actual or implied consent.

For example, a worker may be constructively dismissed if the employer makes modifications to the staff member’s terms and conditions of work that result in a substantial decrease in wage or a considerable unfavorable change in such things as the employee’s work place, hours of work, authority, or position. Constructive dismissal may likewise consist of scenarios where an employer bothers or abuses a worker, or an employer gives a staff member a demand to “quit or be fired” and the worker resigns in response.

The employee would need to resign in response to the change within a sensible time period in order for the company’s actions to be considered a termination of employment for functions of the ESA.

Constructive dismissal is a complex and tough topic. For more details on constructive dismissal, please call the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A staff member is on temporary layoff when a company cuts back or stops the staff member’s work without ending their work (for example, laying somebody off at times when there is not adequate work to do). The mere truth that the company does not define a recall date when laying the worker off does not always mean that the lay-off is not short-term. Note, nevertheless, that a lay-off, even if meant to be short-lived, might result in positive termination if it is not permitted by the employment agreement.

For the purposes of the termination provisions of the ESA, a “week of layoff” is a week in which the employee made less than half of what they would normally earn (or earns usually) in a week.

A week of layoff does not consist of any week in which the staff member did not work for several days since the worker was not able or readily available to work, was subject to disciplinary suspension, or was not provided with work due to the fact that of a strike or lockout at their place of work or somewhere else.

Employers are not needed under the ESA to offer workers with a composed notification of a short-term layoff, nor do they have to supply a reason for the lay-off. (They may, nevertheless, be needed to do these things under a collective contract or an employment agreement.)

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

1. not more than 13 weeks of layoff in any period of 20 consecutive weeks;
or

2. more than 13 weeks in any duration of 20 consecutive weeks, however less than 35 weeks of layoff in any period of 52 consecutive weeks, where:- the worker continues to receive significant payments from the employer;
or

– the company continues to pay for the advantage of the worker under a genuine group or employee insurance strategy (such as a medical or drug insurance coverage plan) or a legitimate retirement or pension strategy;
or

– the employee gets additional joblessness benefits;
or

– the worker would be entitled to get supplemental unemployment benefits but isn’t receiving them since they are utilized somewhere else;
or

– the company recalls 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 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 employer remembers a staff member who is represented by a trade union within the time set out in an arrangement in 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 considered to have terminated the worker’s work. Generally, the staff member will then be entitled to termination pay.

Written notice of termination and termination pay

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

– the employer has actually given the staff member correct composed notification of termination and the notification period has actually ended

– the employer pays termination pay to the employee where no composed notice or less notification than is required is provided

Written notice of termination

A worker is entitled to discover of termination (or termination pay instead of notice) if they have been constantly employed for employment at least 3 months. An individual is thought about “utilized” not just while they are actively working, but likewise throughout at any time 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 worker is entitled depends on their “duration of work”. An employee’s duration of work consists of not just all time while the employee is actively working but 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 short-lived lay-off, the worker’s work is deemed (or considered) to have been ended on the first day of the lay-off-any time after that does not count as part of the employee’s period of work, although the employee may still be used for functions of the “constantly utilized for three months” qualification

– if two different periods 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 situations, for a person to have been “continuously used” for three months or more and yet have a duration of work of less than three months. In such circumstances, the worker would be entitled to see because an employee who has been continuously employed for a minimum of three months is entitled to observe, and the minimum notification privilege of one week applies to an employee with a period of employment of any length less than one year.

The following chart defines the quantity of notice required:

Note: Special rules identify the quantity of notification required when it comes to mass terminations – where the work of 50 or more employees is terminated at a company’s facility within a four-week duration.

Requirements during the statutory notice duration

During the statutory notice period, an employer needs to:

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

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

– pay the worker the salaries they are entitled to, which can not be less than the worker’s regular salaries for a routine work week every week.

Regular rate

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

Regular salaries

These are earnings aside from overtime pay, trip pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and severance pay and specific legal entitlements.

Regular work week

For an employee who usually works the very same number of hours every week, a routine work week is a week of that many hours, not including overtime hours.

Some staff members do not have a regular work week. That is, they do not work the exact same number of hours weekly or they are paid on a basis besides time. For these staff members, the “routine incomes” for a “routine work week” is the average amount of the routine salaries earned by the employee in the weeks in which the employee worked throughout the duration of 12 weeks instantly preceding the date the notice was provided.

A company is not enabled to arrange an employee’s vacation time throughout the statutory notification period unless the employee-after receiving composed notification of termination of employment-agrees to take their holiday time during the notification duration.

If an employer supplies longer notice 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 supply written notification

In most cases, composed notice of termination of work need to be dealt with to the employee. It can be supplied in person or by mail, fax or email, as long as shipment can be verified.

There are unique guidelines for offering notification of termination if a worker has a contract of work or a cumulative contract that offers seniority rights that allow a staff member who is to be laid off or whose employment is to be terminated to displace (” bump”) other workers.

Because case, the company must post a notice in the workplace (where it will be seen by the employees) setting out the names, seniority and job classification of those staff members the employer plans to terminate and the date of the proposed termination. The posting of the notice is considered to be notification of termination, since the date of the publishing, to an employee who is “bumped” by a worker called in the notification. However, this notice of termination need to still fulfill the length requirements set out in the ESA.

There are likewise special guidelines regarding how notification is offered when there is a mass termination.

Termination pay

A worker who does not receive the composed notice required under the ESA should be offered termination pay in lieu of notification. Termination pay is a lump amount payment equivalent to the routine incomes for a regular work week that a staff member would otherwise have been entitled to throughout the composed notice duration. A staff member makes holiday pay on their termination pay. Employers should likewise continue to make whatever contributions would be required to keep the advantages the employee would have been entitled to had they continued to be used through the notification period.

Example: Regular work week

Sarah has actually worked for three and a half years. Now her job has actually been gotten rid of and her work has actually been terminated. Sarah was not given any written notification of termination.

Sarah worked 40 hours a week each week and was paid $20.00 an hour. She also got four percent holiday pay. Because she worked for more than 3 years however less than four years, she is entitled to three weeks’ pay in lieu of notification.

Sarah’s regular earnings for a routine work week are determined:

$ 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 getaway pay on her termination pay is determined:

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 company should likewise guarantee ongoing protection for any advantage or pension strategies that applied to her for 3 weeks.

Example: No regular work week

Gerry has actually worked at an assisted living 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 percent trip pay.

Gerry’s company removed his position and did not offer Gerry any composed notice of termination. Gerry was ill and off work for two of the 12 weeks immediately preceding the day his work was terminated. 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 profits weekly are computed:

$ 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 incomes) = $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 added to his termination pay:

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer should also make sure ongoing coverage for any benefit or pension that applied to him for employment four weeks.

When to pay termination pay

Termination pay should 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 on.

Mass termination

Special guidelines for notification of termination might apply in cases of mass termination (when an employer is terminating 50 or more staff members at its establishment within a four-week duration).

Meaning of “establishment”

An “establishment” is an area at which the employer carries on organization. Separate locations can be thought about one facility if either:

– they are located within the very same municipality, or

– a staff member at one area has legal seniority rights that reach the other place, allowing the employee to displace another worker (likewise called “bumping rights”).

Effective October 26, 2023, in cases of mass termination, the term “establishment” includes an employee’s home, but just if the staff member works from home and does not work at any other area where the employer continues company.

This will require that employees who work specifically remotely be thought about for inclusion in the count when determining whether 50 or more employees have actually been ended.

Note that where a staff member carries out work both from their home and from another location where the company carries on service (for example, a workplace), their home is not included in the meaning of “establishment”. Instead, employment the worker is considered to have a connection to the office location and, for that reason, for the function of mass termination, the staff member is consisted of with respect to that office area.

Example: where numerous areas are considered one “facility”

ABC Company has an office 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 business from home and does not operate at the workplace.

For the purpose of mass termination, the business’s London workplace, London storage facility and Sabrina’s London home are considered one “facility.”

Employer obligations in a mass termination

When a mass termination occurs, the company needs to complete 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 shipment to the Director’s workplace, 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 notification to the impacted employees is not thought about to have actually been given till the Form 1 is received by the Director; in other words, notification of mass termination is ineffective until the Director gets the Form 1.

In addition to supplying employees with individual notifications of termination, the employer must, on the first day of the notification period:

– post a copy of the Form 1 provided to the Director in the work environment where it will pertain to the attention of the affected workers.

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

The amount of notice workers need to receive in a mass termination is not based upon the workers’ length of work, however on the variety of staff members who have been ended. A company must give:

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

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

– 16 weeks see if the employment of 500 or more workers is to be terminated

Exception to the mass termination guidelines

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

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

– none of the terminations are triggered by the long-term discontinuance of all or part of the company’s organization at the establishment

Mass termination: resignation by a worker

A worker who has gotten termination notification under the mass termination rules who wishes to resign before the termination date supplied in the employer’s notice need to provide the company at least one week’s composed notice of resignation if the employee has been used for less than 2 years. If the work period has actually been two years or more, the worker needs to provide a minimum of 2 weeks’ written notification of resignation. However, the staff member does not need to provide notice 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 offer work to a worker who has been provided notification of termination on a momentary basis in the 13-week period after the termination date set out in the notice without affecting the original date of the termination and without being needed to provide any further notification of termination to the worker when the short-term work ends.

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

Recall rights

A “recall right” is the right of an employee on a layoff to be recalled to work by their employer under a term or condition of employment. This right is commonly discovered in cumulative agreements.

An employee who has recall rights and who is entitled to termination pay since 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 discontinuance wage) at that time;
or

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

If an employee is entitled to both termination pay and severance pay, they need to make the same choice for both.

If a worker who is not represented by a trade union chooses to keep their recall rights or fails to decide, the employer must send out the quantity 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 chooses to keep their recall rights or stops working to make an option, the company and the trade union must attempt to come to a plan to hold the termination pay (and severance pay, if any) in trust for the worker. If they can not concern a plan, and the trade union encourages the company and the Director of in composing that efforts have failed, 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 a worker picks to quit their recall rights or if the recall rights end, the cash that is held in trust needs to be sent to the worker.

If the worker accepts a recall back to work, the money that is kept in trust will be gone back to the employer.

Exemptions to observe of termination or termination pay

A number of these exemptions are complicated. Please call the Employment Standards Information Centre, 1-800-531-5551, if you require more details. Please likewise 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 duty that is not unimportant and has not been excused by the employer. Note: “wilful” includes when a worker intended the resulting effect or acted recklessly if they knew or ought to have understood the results their conduct would have. Poor work conduct that is accidental or unintentional is typically ruled out wilful;

– was hired for a specific length of time or until the completion of a specific task. 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 work began; or

– the work continues for three months or more after the term expires or the job is completed;

See likewise: Employment Standards Self-Service Tool

Wrongful termination

Rights higher than ESA notice of termination, termination pay, severance pay

The guidelines under the ESA about termination and severance of work are minimum requirements. Some employees might have rights under the typical law that are greater than the rights to observe of termination (or termination pay) and severance pay under the ESA. A staff member might desire to sue their previous company in court for “wrongful termination”. Employees need to understand that they can not sue an employer for wrongful termination and sue for termination pay or severance pay with the ministry for the same termination or severance of work. An employee should pick one or the other. Employees may wish to acquire legal guidance worrying their rights.