Termination Of Employment

A number of expressions are frequently used to describe circumstances when employment is terminated. These include « let go, » « discharged, » « dismissed, » « fired » and « permanently laid off. »

Under the Employment Standards Act, 2000 (ESA) a person’s employment is terminated if the company:

– dismisses or stops employing an employee, consisting of where an employee is no longer used due to the personal bankruptcy or insolvency of the company;

– « constructively » dismisses a staff member and the worker resigns, in reaction, within a reasonable time;

– lays an employee off for a period that is longer than a « momentary layoff ».

In the majority of cases, when an employer ends the work of a staff member who has been continually employed for three months, the employer must offer the worker with either composed notification of termination, termination pay or a mix (as long as the notification and the variety of weeks of termination pay together equal the length of notification the employee is entitled to get).

The ESA does not need an employer to give an employee a reason that their employment is being ended. There are, nevertheless, some scenarios where a company can not end a staff member’s employment even if the employer is prepared to give proper composed notice or termination pay. For instance, a company can not end somebody’s employment, or penalize them in any other method, if any part of the factor for the termination of employment is based on the employee asking questions about the ESA or working out a right under the ESA, such as refusing to work in excess of the day-to-day or weekly hours of work optimums, or taking a leave of absence specified in the ESA. Please see the chapter on reprisals.

Qualifying for termination notice or pay in lieu

Certain staff members are not entitled to see of termination or termination pay under the ESA. Examples consist of: workers who are guilty of wilful misconduct, disobedience, or wilful disregard of duty that is not trivial and has not been excused by the company. Other examples include construction workers, workers on momentary layoff, employees who decline a deal of affordable alternative work and staff members who have actually been utilized less than 3 months.

There are a variety of other exemptions to the termination of employment provisions of the ESA. See « Exemptions to observe of termination or termination pay. » Please also refer to the unique guideline tool.

The termination-of-employment guidelines are entirely different from any entitlements a staff member might need to be paid severance pay under the ESA.

Constructive termination

A constructive termination may occur when a company makes a considerable change to a fundamental term or condition of a staff member’s work without the staff member’s actual or implied consent.

For example, an employee may be constructively dismissed if the company makes modifications to the worker’s conditions of work that lead to a considerable reduction in wage or a significant unfavorable modification in such things as the employee’s work place, hours of work, authority, or position. Constructive termination might also consist of circumstances where an employer pesters or abuses a staff member, or an employer offers a staff member a demand to « quit or be fired » and the employee resigns in response.

The employee would have to resign in response to the change within a reasonable amount of time in order for the employer’s actions to be thought about a termination of employment for purposes of the ESA.

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

Temporary layoff

An employee is on momentary layoff when a company cuts back or stops the staff member’s work without ending their work (for example, laying someone off sometimes when there is insufficient work to do). The simple truth that the employer does not define a recall date when laying the worker off does not always mean that the lay-off is not temporary. Note, nevertheless, that a lay-off, even if planned to be momentary, may lead to useful termination if it is not enabled by the employment agreement.

For the functions of the termination arrangements of the ESA, a « week of layoff » is a week in which the employee made less than half of what they would normally earn (or earns usually) in a week.

A week of layoff does not include any week in which the staff member did not work for one or more days since the staff member was unable or offered to work, went through disciplinary suspension, or was not supplied with work due to the fact that of a strike or lockout at their place of work or elsewhere.

Employers are not required under the ESA to supply employees with a composed notice of a momentary layoff, nor do they need to supply a reason for the lay-off. (They may, nevertheless, be needed to do these things under a cumulative arrangement or a work contract.)

Under the ESA, a « momentary layoff » can last:

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

2. more than 13 weeks in any duration of 20 consecutive weeks, however less than 35 weeks of layoff in any period of 52 consecutive 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 staff member insurance coverage strategy (such as a medical or drug insurance coverage strategy) or a genuine retirement or pension strategy;
or

– the employee gets supplementary welfare;
or

– the worker would be entitled to receive supplementary welfare but isn’t receiving them because they are utilized in other places;
or

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

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

If a staff member is laid off for a period longer than a short-lived layoff as set out above, the employer is thought about to have ended the staff member’s employment. Generally, the staff member will then be entitled to termination pay.

Written notice 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 given the employee appropriate written notice of termination and the notification duration has actually expired

– the employer pays termination pay to the worker where no written notice or less notice than is needed is given

Written notice of termination

An employee is entitled to observe of termination (or termination pay instead of notice) if they have actually been continually utilized for at least three months. An individual is thought about « used » not only while they are actively working, but likewise throughout at any time in which they are not working but the work relationship still exists (for instance, employment time in which the worker is off ill or on leave or on lay-off).

The amount of notice to which a staff member is entitled depends on their « period of employment ». An employee’s period of work includes 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-term lay-off, the worker’s work is deemed (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 duration of work, although the worker may still be employed for purposes of the « continually used for 3 months » credentials

– if two different durations of work are separated by more than 13 weeks, only the most recent period counts for purposes of notice of termination

It is possible, in some situations, for a person to have been « continually utilized » for three months or more and yet have a period of employment of less than 3 months. In such situations, the staff member would be entitled to notice due to the fact that a staff member who has actually been constantly used for a minimum of three months is entitled to see, and the minimum notification entitlement of one week applies to an employee with a period of work of any length less than one year.

The following chart specifies the amount of notice required:

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

Requirements throughout the statutory notification period

During the statutory notification duration, an employer needs to:

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

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

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

Regular rate

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

Regular earnings

These are wages other than overtime pay, holiday pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and discontinuance wage and particular contractual privileges.

Regular work week

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

Some workers do not have a routine work week. That is, they do not work the exact same number of hours every week or they are paid on a basis besides time. For these staff members, the « regular salaries » for a « regular work week » is the average quantity of the routine earnings earned by the worker in the weeks in which the worker worked throughout the period of 12 weeks instantly preceding the date the notification was provided.

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

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

How to offer written notification

For the most part, composed notification of termination of work must be resolved to the staff member. It can be supplied personally or by mail, fax or e-mail, as long as shipment can be confirmed.

There are unique rules for offering notification of termination if a staff member has a contract of employment or a collective arrangement that provides seniority rights that allow a worker who is to be laid off or whose work is to be ended to displace ( » bump ») other staff members.

Because case, the company should post a notice in the office (where it will be seen by the employees) setting out the names, seniority and job category of those employees the company intends to end and the date of the proposed termination. The posting of the notice is thought about to be notification of termination, as of the date of the posting, to a staff member who is « bumped » by a worker named in the notice. However, this notice of termination need to still meet the length requirements set out in the ESA.

There are likewise unique guidelines concerning how notification is supplied when there is a mass termination.

Termination pay

An employee who does not receive the written notification required under the ESA must be given termination pay in lieu of notice. Termination pay is a swelling amount payment equivalent to the regular salaries for a regular work week that a staff member would otherwise have been entitled to throughout the composed notification period. A staff member earns getaway pay on their termination pay. Employers must also continue to make whatever contributions would be needed 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 three and a half years. Now her task has actually been removed and her work has actually been terminated. Sarah was not given any written notice of termination.

Sarah worked 40 hours a week each week and was paid $20.00 an hour. She likewise received four per cent getaway pay. Because she worked for more than three years however less than 4 years, she is entitled to three weeks’ pay in lieu of notification.

Sarah’s routine incomes for a regular 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 holiday pay on her termination pay is computed:

4% of $2,400.00 = $96.00

Finally, her holiday pay is contributed 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 continued protection for any benefit or pension plans that used to her for 3 weeks.

Example: No routine work week

Gerry has actually worked at a retirement home for 4 years. He works every 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 provide Gerry any written notice of termination. Gerry was ill and off work for two 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 four weeks of termination pay.

Gerry’s typical revenues per week are computed:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off sick for 2 weeks for that reason these weeks are not included in the computation of typical profits) = $180.00 a week

His termination pay is determined:

$ 180.00 × 4 weeks = $720.00

Then his trip pay on his termination pay is calculated:

6% of $720.00 = $43.20

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

$ 720.00 + $43.20 = $763.20

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

When to pay termination pay

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

Mass termination

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

Meaning of « establishment »

An « facility » is a location at which the employer continues service. Separate places can be considered one establishment if either:

– they are situated within the same town, or

– an employee at one area has legal seniority rights that encompass the other place, allowing the employee to displace another staff member (also called « bumping rights »).

Effective October 26, 2023, in cases of mass termination, the term « facility » consists of a worker’s home, but only if the staff member works from home and does not work at any other area where the company brings on business.

This will require that staff members who work exclusively remotely be thought about for inclusion in the count when determining whether 50 or more staff members have been terminated.

Note that where a staff member carries out work both from their home and from another location where the on business (for instance, an office), their home is not consisted of in the meaning of « establishment ». Instead, the employee is thought about to have a connection to the office location and, therefore, for the purpose of mass termination, the worker is consisted of with regard to that workplace place.

Example: where several locations are considered one « establishment »

ABC Company has a workplace and a storage facility situated in London, ON. Sabrina lives in London and works for ABC Company solely remotely: she performs work for the company from home and does not operate at the workplace.

For the function of mass termination, the company’s London workplace, London warehouse and Sabrina’s London home are considered one « establishment. »

Employer obligations in a mass termination

When a mass termination takes place, the employer must complete and deliver the Form 1 (Notice of termination of work) 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 workplace on a day and at a time when it is open.

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

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

Any notice to the affected staff members is not thought about to have been given till the Form 1 is gotten by the Director; simply put, employment notification of mass termination is not efficient till the Director receives the Form 1.

In addition to offering employees with specific notices of termination, the employer must, on the first day of the notification duration:

– post a copy of the Form 1 provided to the Director in the office where it will come to the attention of the affected staff members.

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

The amount of notification staff members need to receive in a mass termination is not based upon the employees’ length of work, employment however on the variety of employees who have actually been ended. A company should provide:

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

– 12 weeks discover if the employment of 200 to 499 staff members is to be terminated

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

Exception to the mass termination guidelines

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

– the variety of staff members whose employment is being terminated represents not more than 10 per cent of the staff members who have been employed for at least three months at the facility

– none of the terminations are brought on by the irreversible discontinuance of all or part of the employer’s service at the facility

Mass termination: resignation by a staff member

A worker who has actually received termination notice under the mass termination rules who wishes to resign before the termination date supplied in the company’s notice must provide the employer a minimum of one week’s written notice of resignation if the worker has been employed for less than 2 years. If the work duration has been 2 years or more, the worker must offer a minimum of two weeks’ written notification of resignation. However, the worker does not have to give notification 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 offer work to an employee who has been notified of termination on a short-lived basis in the 13-week period after the termination date set out in the notification without affecting the original date of the termination and without being required to offer any further notice of termination to the staff member when the momentary work ends.

If a staff member works beyond the 13-week period after the termination date and after that has their work ended, the worker will be entitled to a new written notice of termination as if the previous notification had never been provided. The staff member’s duration of work will then likewise include the duration of short-lived work.

Recall rights

A « recall right » is the right of a staff member on a layoff to be called back to work by their employer under a term or condition of employment. This right is typically discovered in cumulative arrangements.

An employee who has recall rights and who is entitled to termination pay since of a layoff of 35 weeks or more may 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 employment receive termination pay (and severance pay, if they were entitled to severance pay).

If a staff member 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 fails to choose, 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 an employee who is represented by a trade union elects to keep their recall rights or stops working to choose, the company and the trade union must try to come to an arrangement to hold the termination pay (and discontinuance wage, if any) in trust for the employee. If they can not pertain to a plan, and the trade union advises the company and the Director of Employment Standards in writing that efforts have actually failed, the company must send the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If an employee selects to offer up their recall rights or if the recall rights expire, the cash that is held in trust must be sent to the employee.

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

Exemptions to notice of termination or termination pay

Many of these exemptions are complex. Please contact the Employment Standards Information Centre, 1-800-531-5551, if you require more info. Please also describe the unique guideline tool.

The notice of termination and termination pay requirements of the ESA do not use to a worker who:

– is guilty of wilful misbehavior, disobedience or wilful disregard of responsibility that is not unimportant and has actually not been excused by the company. Note: « wilful » consists of when a worker intended the resulting consequence or acted recklessly if they understood or ought to have known the results their conduct would have. Poor work conduct that is accidental or unintended is generally not considered wilful;

– was hired for a specific length of time or till the completion of a specific job. However, such an employee will be entitled to see of termination or termination pay if:- the employment ends before the term expires or employment the task is finished; or

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

– the work continues for 3 months or more after the term ends or the job is completed;

See likewise: Employment Standards Self-Service Tool

Wrongful dismissal

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

The guidelines under the ESA about termination and severance of work are minimum requirements. Some workers might have rights under the common law that are higher than the rights to see of termination (or termination pay) and severance pay under the ESA. An employee might wish to sue their previous company in court for « wrongful dismissal ». Employees should be aware 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 same termination or severance of employment. A staff member must choose one or the other. Employees may wish to acquire legal advice concerning their rights.