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Termination Of Employment
A number of expressions are commonly used to describe scenarios when employment is ended. These consist of “let go,” “released,” “dismissed,” “fired” and “completely laid off.”
Under the Employment Standards Act, 2000 (ESA) a person’s work is terminated if the company:
– dismisses or stops employing a staff member, consisting of where a worker is no longer used due to the personal bankruptcy or insolvency of the employer;
– “constructively” dismisses an employee and the worker resigns, in response, within a sensible time;
– lays a staff member off for a duration that is longer than a “short-term layoff”.
In many cases, when a company ends the work of a worker who has been continuously used for 3 months, the company should offer the staff member with either composed notification of termination, termination pay or a mix (as long as the notice and the number of weeks of termination pay together equal the length of notice the staff member is entitled to receive).
The ESA does not need an employer to give a staff member a reason why their work is being ended. There are, however, some situations where an employer can not end an employee’s employment even if the company is prepared to offer appropriate written notification or termination pay. For instance, an employer can not end someone’s employment, or penalize them in any other way, if any part of the factor for the termination of employment is based upon the worker asking questions about the ESA or working out a right under the ESA, such as refusing to work in excess of the daily or weekly hours of work optimums, or taking a leave of lack specified in the ESA. Please see the chapter on reprisals.
Receiving termination notice or pay in lieu
Certain workers are not entitled to discover of termination or termination pay under the ESA. Examples include: staff members who are guilty of wilful misconduct, disobedience, or wilful disregard of task that is not unimportant and has not been excused by the employer. Other examples include building and construction employees, employees on temporary layoff, employees who decline a deal of reasonable alternative work and workers who have been used less than 3 months.
There are a number of other exemptions to the termination of employment provisions of the ESA. See “Exemptions to discover of termination or termination pay.” Please also describe the unique guideline tool.
The termination-of-employment rules are entirely different from any entitlements a worker might need to be paid severance pay under the ESA.
Constructive termination
A useful termination may take place when an employer makes a substantial modification to an essential term or condition of a worker’s work without the worker’s real or implied authorization.
For example, an employee might 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 income or a considerable negative modification in such things as the worker’s work area, hours of work, authority, or position. Constructive dismissal might also include circumstances where an employer pesters or abuses a staff member, or an employer offers an employee a warning to “quit or be fired” and the staff member resigns in reaction.
The worker would need to resign in response to the change within a sensible time period in order for the employer’s actions to be thought about a termination of work for purposes of the ESA.
Constructive termination is a complex and tough subject. For more details on positive dismissal, please get in touch with the Employment Standards Information Centre at 1-800-531-5551.
Temporary layoff
A worker is on short-lived layoff when an employer cuts down or stops the worker’s work without ending their employment (for example, laying someone off at times when there is inadequate work to do). The simple reality that the employer does not define a recall date when laying the worker off does not always suggest that the lay-off is not momentary. Note, nevertheless, that a lay-off, even if intended to be momentary, may result in positive termination if it is not enabled by the employment contract.
For the purposes of the termination arrangements of the ESA, a “week of layoff” is a week in which the employee earned less than half of what they would normally make (or earns usually) in a week.
A week of layoff does not consist of any week in which the employee did not work for one or more days due to the fact that the employee was not able or readily available to work, went through disciplinary suspension, or was not offered with work since of a strike or lockout at their place of work or in other places.
Employers are not needed under the ESA to provide staff members with a written notice of a momentary 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 a work agreement.)
Under the ESA, a “temporary 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 period of 20 consecutive weeks, but less than 35 weeks of layoff in any period of 52 consecutive weeks, employment where:- the employee continues to receive considerable payments from the company;
or
– the employer continues to pay for the advantage of the staff member under a genuine group or staff member insurance coverage plan (such as a medical or drug insurance coverage plan) or a genuine retirement or pension plan;
or
– the employee gets extra joblessness benefits;
or
– the staff member would be entitled to receive extra joblessness benefits however isn’t getting them because they are used in other places;
or
– the company remembers the staff member to work within the time frame authorized by the Director of Employment Standards;
or
– the employer recalls the worker within the time frame set out in a contract with an employee who is not represented by a trade union;
or
3. a layoff longer than a layoff explained in ‘B’ where the company recalls 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 duration longer than a temporary layoff as set out above, the employer is considered to have ended the worker’s work. Generally, the employee 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 worker who has actually been utilized constantly for 3 months or more if either:
– the company has given the staff member proper written notification of termination and the notice duration has ended
– the company pays termination pay to the employee where no written notice or less notification than is required is provided
Written notification of termination
A staff member is entitled to see of termination (or termination pay instead of notification) if they have been continuously employed for at least 3 months. An individual is considered “utilized” not just while they are actively working, but also throughout any time in which they are not working however the employment relationship still exists (for instance, time in which the staff member is off ill or on leave or on lay-off).
The quantity of notification to which an employee is entitled depends upon their “duration of employment”. An employee’s period of employment consists of not only perpetuity while the staff member is actively working however 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 momentary lay-off, the worker’s work is deemed (or thought about) to have been ended on the very first day of the lay-off-any time after that does not count as part of the worker’s period of employment, although the employee might still be employed for purposes of the “continuously utilized for 3 months” qualification
– if two separate durations of work are separated by more than 13 weeks, only the most recent period counts for functions of notification of termination
It is possible, in some situations, 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 discover because an employee who has actually been continuously employed for employment a minimum of 3 months is entitled to observe, and the minimum notification entitlement of one week applies to a staff member with a duration of employment of any length less than one year.
The following chart defines the quantity of notification needed:
Note: Special rules identify the quantity of notification needed when it comes to mass terminations – where the work of 50 or more staff members is ended at a company’s facility within a four-week period.
Requirements throughout the statutory notification period
During the statutory notice period, a company needs to:
– not decrease the staff member’s wage rate or alter any other term or condition of employment;
– continue to make whatever contributions would be required to preserve the worker’s advantages strategies; and
– pay the staff member the incomes they are entitled to, which can not be less than the staff member’s routine incomes for a routine work week every week.
Regular rate
This is an employee’s rate of pay for each non-overtime hour of work in the employee’s work week.
Regular earnings
These are earnings other than overtime pay, trip pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and severance pay and particular contractual entitlements.
Regular work week
For an employee who typically works the same number of hours every week, a regular work week is a week of that lots of hours, not including overtime hours.
Some employees do not have a routine work week. That is, they do not work the exact same number of hours each week or they are paid on a basis besides time. For these workers, the “routine incomes” for employment a “routine work week” is the average amount of the regular salaries made by the employee in the weeks in which the employee worked during the period of 12 weeks right away preceding the date the notice was given.
A company is not permitted to set up a staff member’s trip time during the statutory notice period unless the employee-after receiving written notice of termination of employment-agrees to take their holiday time during the notification period.
If a company offers longer notice than is needed, the statutory part of the notice period is the last part of the period that ends on the date of termination.
How to supply written notice
In many cases, composed notice of termination of employment must be resolved to the staff member. It can be provided face to face or by mail, fax or e-mail, as long as shipment can be verified.
There are special guidelines for providing notification of termination if an employee has a contract of employment or a cumulative contract that supplies seniority rights that enable a worker who is to be laid off or whose employment is to be ended to displace (” bump”) other staff members.
In that case, the company should publish a notice in the work environment (where it will be seen by the staff members) setting out the names, seniority and job category of those workers the company means to terminate and the date of the proposed termination. The publishing of the notification is considered to be notification of termination, since the date of the posting, to a worker who is “bumped” by an employee named in the notification. However, this notification of termination need to still meet the length requirements set out in the ESA.
There are likewise unique rules relating to how notification is supplied when there is a mass termination.
Termination pay
An employee who does not get the written notification needed under the ESA should be offered termination pay in lieu of notice. Termination pay is a swelling amount payment equivalent to the routine earnings for a routine work week that a staff member would otherwise have been entitled to throughout the written notice duration. A staff member earns getaway pay on their termination pay. Employers should also continue to make whatever contributions would be required to preserve the advantages the staff member would have been entitled to had they continued to be utilized through the notification period.
Example: Regular work week
Sarah has actually worked for 3 and a half years. Now her job has actually been gotten rid of and her work has actually been ended. Sarah was not provided any written notice of termination.
Sarah worked 40 hours a week weekly and was paid $20.00 an hour. She also got 4 percent holiday pay. Because she worked for more than 3 years but less than four years, she is entitled to 3 weeks’ pay in lieu of notice.
Sarah’s regular earnings for a regular work week are determined:
$ 20.00 an hour X 40 hours a week = $800.00 a week
Her termination pay is determined:
$ 800.00 X 3 weeks = $2,400.00
Then her trip pay on her termination pay is computed:
4% of $2,400.00 = $96.00
Finally, her holiday pay is added to her termination pay:
$ 2400.00 + $96.00 = $2,496.00
Result: Sarah is entitled to $2,496.00. The company must likewise make sure ongoing protection for any benefit or pension plans that used to her for 3 weeks.
Example: No routine work week
Gerry has worked at a retirement home for four 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 trip pay.
Gerry’s company eliminated his position and did not give Gerry any written notification of termination. Gerry was ill and off work for 2 of the 12 weeks immediately 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 four weeks of termination pay.
Gerry’s average profits weekly are computed:
$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off sick for 2 weeks therefore these weeks are not included in the computation of average revenues) = $180.00 a week
His termination pay is computed:
$ 180.00 × 4 weeks = $720.00
Then his holiday pay on his termination pay is determined:
6% of $720.00 = $43.20
Finally, his holiday pay is included to his termination pay:
$ 720.00 + $43.20 = $763.20
Result: Gerry is entitled to $763.20. The employer needs to likewise guarantee ongoing protection for any benefit or pension plans that used to him for four weeks.
When to pay termination pay
Termination pay should be paid to an employee either 7 days after the employee’s employment is ended or on the employee’s next routine pay date, whichever is later.
Mass termination
Special guidelines for notice of termination might apply in cases of mass termination (when an employer is ending 50 or more workers at its establishment within a four-week period).
Meaning of “facility”
An “facility” is an area at which the company carries on company. Separate places can be considered one facility if either:
– they lie within the exact same town, or
– a worker at one area has legal seniority rights that encompass the other place, enabling the staff member to displace another staff member (also called “bumping rights”).
Effective October 26, 2023, in cases of mass termination, the term “establishment” consists of a worker’s home, but just if the staff member works from home and does not operate at any other area where the employer continues company.
This will need that workers who work exclusively from another location be thought about for inclusion in the count when figuring out whether 50 or more employees have been ended.
Note that where a worker performs work both from their home and from another area where the company carries on company (for example, a workplace), their home is not consisted of in the meaning of “establishment”. Instead, the staff member is thought about to have a connection to the office location and, for that reason, for the purpose of mass termination, the employee is consisted of with regard to that office place.
Example: where multiple locations are considered one “establishment”
ABC Company has an office and a warehouse situated in London, ON. Sabrina lives in London and works for ABC Company exclusively from another location: she performs work for the company from home and does not work at the office.
For the function of mass termination, the business’s London workplace, London warehouse and Sabrina’s London home are thought about one “facility.”
Employer obligations in a mass termination
When a mass termination occurs, the company must finish and provide the Form 1 (Notice of termination of employment) to the Director employment of Employment Standards (Director) by:
– e-mail 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 delivery to the Director’s workplace, if the delivery can be validated.
The office of the Director of Employment Standards is found on the 9th floor, 400 University Avenue, Toronto ON M7A 1T7.
Any notification to the affected employees is ruled out to have actually been provided till the Form 1 is received by the Director; simply put, notice of mass termination is ineffective till the Director receives the Form 1.
In addition to offering workers with specific notices of termination, the company must, on the first day of the notice duration:
– post a copy of the Form 1 offered to the Director in the office where it will pertain to the attention of the impacted employees.
– supply a copy of the Form 1 to each impacted staff member.
The amount of notice staff members need to receive in a mass termination is not based on the workers’ length of work, however on the variety of employees who have been terminated. An employer needs to give:
– 8 weeks see if the work of 50 to 199 workers is to be ended
– 12 weeks observe if the employment of 200 to 499 workers is to be terminated
– 16 weeks discover if the work of 500 or more workers is to be terminated
Exception to the mass termination rules
The mass termination guidelines do not use if these two things apply:
– the variety of employees whose work is being terminated represents not more than 10 percent of the employees who have actually been utilized for employment at least 3 months at the establishment
– none of the terminations are triggered by the irreversible discontinuance of all or part of the employer’s company at the establishment
Mass termination: resignation by a staff member
A staff member who has received termination notice under the mass termination guidelines who desires to resign before the termination date offered in the company’s notification need to offer the employer at least one week’s written notification of resignation if the worker has been utilized for less than two years. If the work duration has been 2 years or more, the staff member should offer a minimum of two weeks’ composed notice of resignation. However, the worker 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
A company can supply work to a staff member who has actually been notified of termination on a short-lived 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 further notification of termination to the worker when the short-term work ends.
If a worker works beyond the 13-week duration after the termination date and after that has their work ended, the worker will be entitled to a brand-new composed notice of termination as if the previous notice had actually never been given. The staff member’s period of employment will then also consist of the period of short-term work.
Recall rights
A “recall right” is the right of a staff member on a layoff to be called back to work by their company under a term or condition of employment. This right is frequently discovered in cumulative arrangements.
An employee who has recall rights and who is entitled to termination pay because of a layoff of 35 weeks or more might select to:
– keep their recall rights and not be paid termination pay (or severance pay, if they were entitled to severance pay) at that time;
or
– quit 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 severance pay, they need to make the same option for both.
If a staff member who is not represented by a trade union chooses to keep their recall rights or fails to make a choice, the employer needs to send out the amount of the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.
If an employee who is represented by a trade union chooses to keep their recall rights or stops working to make a choice, the employer and the trade union should attempt to come to an arrangement to hold the termination pay (and discontinuance wage, if any) in trust for the worker. If they can not concern an arrangement, and the trade union recommends the company and the Director of Employment Standards in writing that efforts have stopped working, the company must send out the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the money in trust.
If a worker selects to quit their recall rights or if the recall rights end, the cash that is held in trust needs to be sent out to the staff member.
If the worker accepts a recall back to work, the cash that is held in trust will be returned to the company.
Exemptions to observe of termination or termination pay
Many of these exemptions are intricate. Please contact the Employment Standards Information Centre, 1-800-531-5551, if you need more details. 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 employment wilful neglect of task that is not unimportant and has actually not been excused by the employer. Note: “wilful” consists of when a staff member planned the resulting consequence or acted recklessly if they understood or must have understood the effects their would have. Poor work conduct that is accidental or unintentional is generally ruled out wilful;
– was hired for a specific length of time or until the conclusion of a particular job. However, such a staff member will be entitled to observe of termination or termination pay if:- the work ends before the term expires or the task is completed; or
– the term expires or the job is not finished more than 12 months after the work started; or
– the work 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 notification of termination, termination pay, discontinuance wage
The guidelines under the ESA about termination and severance of work are minimum requirements. Some staff members might have rights under the common law that are greater than the rights to discover of termination (or termination pay) and discontinuance wage under the ESA. A staff member may wish to sue their former company in court for “wrongful termination”. Employees must be conscious that they can not sue a company for wrongful termination and file a claim for termination pay or discontinuance wage with the ministry for the very same termination or severance of work. A staff member needs to pick one or the other. Employees may want to get legal recommendations concerning their rights.