Termination Of Employment

A number of expressions are frequently used to explain situations when employment is terminated. These include « release, » « released, » « dismissed, » « fired » and « permanently laid off. »

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

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

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

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

Most of the times, when a company ends the employment of a staff member who has been continually utilized for three months, the employer needs to offer the employee with either written notification of termination, termination pay or a mix (as long as the notification and the number of weeks of termination pay together equivalent the length of notice the staff member is entitled to receive).

The ESA does not require a company to give a worker a reason their work is being ended. There are, nevertheless, some circumstances where a company can not terminate a staff member’s work even if the company is prepared to provide proper composed notification or termination pay. For example, an employer can not end someone’s work, or punish them in any other way, if any part of the reason for the termination of employment is based on the staff member 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 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 notice of termination or termination pay under the ESA. Examples consist of: employees who are guilty of wilful misbehavior, disobedience, or wilful disregard of responsibility that is not unimportant and has not been excused by the employer. Other examples include building employees, employees on short-lived layoff, employees who refuse a deal of affordable alternative employment and workers who have actually been used less than 3 months.

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

The termination-of-employment guidelines are completely different from any privileges an employee may need to be paid discontinuance wage under the ESA.

Constructive termination

A constructive dismissal may take place when an employer makes a significant modification to a fundamental term or condition of a worker’s work without the worker’s real or implied permission.

For example, an employee may be constructively dismissed if the employer makes modifications to the worker’s terms of work that lead to a substantial reduction in wage or a considerable unfavorable modification in such things as the employee’s work location, hours of work, authority, or position. Constructive dismissal might also consist of scenarios where an employer bothers or abuses a staff member, or a company provides a staff member a final notice to « stop or be fired » and the employee resigns in action.

The employee would need to resign in response to the modification within a sensible amount of time in order for the employer’s actions to be considered a termination of employment for purposes of the ESA.

Constructive dismissal is a complex and tough subject. For more info on positive dismissal, please contact the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

An employee is on temporary layoff when an employer cuts back or stops the staff member’s work without ending their employment (for example, laying somebody off at times when there is not enough work to do). The mere truth that the employer does not define a recall date when laying the staff member off does not always imply that the lay-off is not short-term. Note, nevertheless, that a lay-off, even if planned to be short-lived, may lead to useful termination if it is not allowed by the employment agreement.

For the purposes of the termination provisions of the ESA, a « week of layoff » is a week in which the worker made less than half of what they would normally make (or makes typically) in a week.

A week of layoff does not include any week in which the worker did not work for several days since the worker was unable or available to work, was subject to disciplinary suspension, or was not provided with work because of a strike or lockout at their location of employment or somewhere else.

Employers are not needed under the ESA to offer employees with a composed notice of a temporary layoff, nor do they have to provide a reason for the lay-off. (They may, however, be required to do these things under a cumulative agreement or an employment agreement.)

Under the ESA, a « temporary 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, but less than 35 weeks of layoff in any duration of 52 successive weeks, where:- the staff member continues to receive significant payments from the employer;
or

– the employer continues to make payments for the advantage of the employee under a genuine group or staff member insurance coverage plan (such as a medical or drug insurance plan) or a genuine retirement or pension;
or

– the employee receives supplemental unemployment advantages;
or

– the staff member would be entitled to receive additional welfare but isn’t receiving them due to the fact that they are used elsewhere;
or

– the employer remembers 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 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 employer recalls a worker who is represented by a trade union within the time set out in an agreement between the union and the company.

If a staff member is laid off for a duration longer than a short-term layoff as set out above, the employer is considered to have ended the worker’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 a worker who has been employed constantly for 3 months or more if either:

– the company has provided the worker proper composed notification of termination and the notification duration has actually ended

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

Written notice of termination

An employee is entitled to observe of termination (or termination pay instead of notification) if they have actually been continuously used for a minimum of 3 months. An individual is considered « utilized » not just while they are actively working, however likewise during at any time in which they are not working however the work relationship still exists (for example, time in which the staff member is off ill or on leave or on lay-off).

The quantity of notification to which a worker is entitled depends upon their « period of work ». An employee’s period of work includes not only all time while the employee is actively working but also at 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 short-lived lay-off, the staff member’s employment is deemed (or considered) to have been terminated 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 worker may still be utilized for functions of the « continually utilized for 3 months » credentials

– if 2 separate periods of employment are separated by more than 13 weeks, just the most current duration counts for functions of notification of termination

It is possible, in some situations, for a person to have actually been « continually employed » for 3 months or more and yet have a period of employment of less than 3 months. In such circumstances, the staff member would be entitled to observe since an employee who has actually been continually used for a minimum of 3 months is entitled to observe, employment and the minimum notification entitlement of one week uses to a staff member with a period of employment of any length less than one year.

The following chart specifies the quantity of notification required:

Note: Special guidelines identify the quantity of notification needed when it comes to mass terminations – where the work of 50 or more employees is ended at a company’s establishment within a period.

Requirements during the statutory notice period

During the statutory notification period, an employer needs to:

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

– continue to make whatever contributions would be required to maintain the employee’s advantages plans; and

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

Regular rate

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

Regular incomes

These are salaries aside from overtime pay, holiday pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and severance pay and certain contractual entitlements.

Regular work week

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

Some workers do not have a regular work week. That is, they do not work the exact same variety 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 quantity of the routine wages made by the employee in the weeks in which the staff member worked throughout the duration of 12 weeks right away preceding the date the notification was offered.

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

If an employer provides 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 provide written notice

In many cases, written notice of termination of work must be dealt with to the staff member. It can be supplied personally or by mail, fax or email, as long as shipment can be validated.

There are special rules for supplying notice of termination if a worker has a contract of employment or a collective arrangement that supplies seniority rights that permit an employee who is to be laid off or whose employment is to be ended to displace ( » bump ») other workers.

In that case, the company should post a notice in the workplace (where it will be seen by the staff members) setting out the names, seniority and job classification of those staff members the employer intends to terminate and the date of the proposed termination. The posting of the notification is thought about to be notification of termination, since the date of the posting, to an employee who is « bumped » by an employee named in the notification. However, this notice of termination need to still satisfy the length requirements set out in the ESA.

There are likewise special rules concerning how notification is supplied when there is a mass termination.

Termination pay

A worker who does not receive the written notice required under the ESA should be given termination pay in lieu of notification. Termination pay is a lump sum payment equivalent to the regular wages for a regular work week that a worker would otherwise have actually been entitled to throughout the composed notice duration. An employee makes getaway pay on their termination pay. Employers need to also continue to make whatever contributions would be needed to keep the benefits the worker would have been entitled to had they continued to be used through the notification duration.

Example: Regular work week

Sarah has actually worked for three and employment a half years. Now her job has actually been removed and her employment has actually been ended. Sarah was not given any composed notification of termination.

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

Sarah’s regular 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 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 employer must also guarantee ongoing protection for any benefit or pension strategies that used to her for 3 weeks.

Example: No routine work week

Gerry has worked at a retirement home for four years. He works weekly, but his hours vary from week to week. His rate of pay is $25.00 an hour, and he is paid 6 per cent getaway pay.

Gerry’s company removed his position and did not provide Gerry any composed notification of termination. Gerry was ill and off work for 2 of the 12 weeks right away preceding the day his employment was terminated. Gerry earned $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 typical earnings weekly are calculated:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off sick for 2 weeks therefore these weeks are not included in the estimation of typical 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 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 likewise make sure ongoing protection for any advantage or pension strategies that applied to him for four weeks.

When to pay termination pay

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

Mass termination

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

Meaning of « facility »

An « establishment » is a place at which the employer continues service. Separate areas can be thought about one facility if either:

– they lie within the same municipality, or

– a worker at one location has legal seniority rights that reach the other location, enabling the employee to displace another employee (also called « bumping rights »).

Effective October 26, 2023, in cases of mass termination, the term « facility » includes a worker’s home, however only if the worker works from home and does not operate at any other area where the company continues business.

This will need that staff members who work exclusively from another location be thought about for addition in the count when determining whether 50 or more staff members have actually been terminated.

Note that where a worker performs work both from their home and from another place where the company continues company (for instance, an office), their home is not included in the meaning of « facility ». Instead, the staff member is thought about to have a connection to the office location and, for that reason, for the function of mass termination, the employee is included with respect to that office area.

Example: where several locations are considered one « establishment »

ABC Company has an office and a storage facility located in London, ON. Sabrina lives 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 office.

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

Employer responsibilities in a mass termination

When a mass termination takes place, the employer must complete and deliver 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.

– individual delivery to the Director’s workplace on a day and at a time when it is open.

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

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

Any notice to the affected staff members is ruled out to have actually been provided till the Form 1 is gotten by the Director; in other words, notification of mass termination is not reliable till the Director gets the Form 1.

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

– publish a copy of the Form 1 supplied to the Director in the workplace where it will concern the attention of the affected employees.

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

The quantity of notice employees need to receive in a mass termination is not based upon the workers’ length of work, but on the number of staff members who have been terminated. An employer should give:

– 8 weeks observe if the work of 50 to 199 workers is to be ended

– 12 weeks notice if the employment of 200 to 499 workers is to be ended

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

Exception to the mass termination rules

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

– the variety of staff members whose work is being terminated represents not more than 10 per cent of the staff members who have actually been utilized for at least three months at the establishment

– none of the terminations are brought on by the long-term discontinuance of all or part of the employer’s organization at the facility

Mass termination: resignation by a staff member

An employee who has actually gotten termination notice under the mass termination rules who wishes to resign before the termination date supplied in the employer’s notice must give the employer at least one week’s written notification of resignation if the employee has actually been used for less than two years. If the work duration has actually been two years or more, the employee must provide a minimum of 2 weeks’ written notification of resignation. However, the worker does not need to give notification of resignation if the employer constructively dismisses the employee or breaches a term of the contract.

Temporary work after termination date in notice

An employer can provide work to an employee who has been notified of termination on a short-term basis in the 13-week duration after the termination date set out in the notification without affecting the original date of the termination and without being needed to supply any additional notification of termination to the worker when the short-lived work ends.

If an employee works beyond the 13-week duration after the termination date and then has their work terminated, the worker will be entitled to a new composed notice of termination as if the previous notification had never ever been provided. The employee’s period of employment 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 recalled to work by their employer under a term or condition of work. This right is commonly found in collective agreements.

A staff member who has recall rights and who is entitled to termination pay because 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

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

If an employee is entitled to both termination pay and severance pay, they should make the exact 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 company needs to send out the quantity of the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the money in trust.

If an employee who is represented by a trade union elects to keep their recall rights or fails to make an option, the employer and the trade union must attempt to come to a plan to hold the termination pay (and discontinuance wage, if any) in trust for the worker. If they can not come to a plan, and the trade union encourages the company and the Director of Employment Standards in composing that efforts have stopped working, the company must send out the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the money in trust.

If a staff member selects to give up their recall rights or if the recall rights expire, the cash that is kept in trust needs to be sent out to the staff member.

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

Exemptions to see of termination or termination pay

Much of these exemptions are complex. Please contact the Employment Standards Information Centre, 1-800-531-5551, employment if you require more details. Please likewise refer to the unique rule 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 neglect of duty that is not insignificant and has not been condoned by the company. Note: « wilful » includes when an employee intended the resulting consequence or acted recklessly if they understood or should have known the results their conduct would have. Poor work conduct that is unexpected or unintended is normally not considered wilful;

– was worked with for a specific length of time or until the conclusion of a particular job. However, such a staff member will be entitled to see 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 employment continues for 3 months or more after the term expires or the job is completed;

See also: 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 staff members may have rights under the typical law that are greater than the rights to discover of termination (or termination pay) and severance pay under the ESA. An employee might desire to sue their former company in court for « wrongful termination ». Employees should understand that they can not take legal action against an employer for wrongful dismissal and sue for termination pay or severance pay with the ministry for the same termination or severance of work. A staff member must pick one or the other. Employees might want to acquire legal guidance worrying their rights.