Termination Of Employment
A variety of expressions are frequently utilized to describe circumstances when employment is ended. These consist of “let go,” “discharged,” “dismissed,” “fired” and “permanently laid off.”
Under the Employment Standards Act, employment 2000 (ESA) an individual’s work is terminated if the company:
– dismisses or stops employing a staff member, including where a staff member is no longer used due to the personal bankruptcy or insolvency of the company;
– “constructively” dismisses a worker and the worker resigns, in action, within a reasonable time;
– lays a worker off for a duration that is longer than a “momentary layoff”.
In a lot of cases, when a company ends the employment of a staff member who has actually been continuously employed for three months, the employer must supply the employee with either composed notification of termination, termination pay or a combination (as long as the notice 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 offer a worker a reason their work is being terminated. There are, employment however, some circumstances where an employer can not end a worker’s work even if the company is prepared to give correct composed notification or termination pay. For instance, an employer can not end somebody’s employment, or penalize them in any other way, if any part of the factor for the termination of work is based on the worker asking concerns about the ESA or exercising 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 absence specified in the ESA. Please see the chapter on reprisals.
Getting approved for termination notice or pay in lieu
Certain employees are not entitled to notice of termination or termination pay under the ESA. Examples consist of: workers who are guilty of wilful misconduct, disobedience, or wilful overlook of duty that is not minor and has not been excused by the employer. Other examples include building and construction staff members, workers on short-lived layoff, workers who refuse an offer of reasonable alternative work and staff members who have been utilized less than 3 months.
There are a number of other exemptions to the termination of employment provisions of the ESA. See “Exemptions to observe of termination or termination pay.” Please also describe the unique guideline tool.
The termination-of-employment rules are completely separate from any entitlements a staff member may have to be paid severance pay under the ESA.
Constructive dismissal
A constructive termination might take place when a company makes a considerable change to a basic term or condition of a worker’s employment without the employee’s actual or implied authorization.
For instance, a staff member may be constructively dismissed if the employer makes changes to the worker’s conditions of employment that lead to a substantial decrease in wage or a considerable negative change in such things as the employee’s work location, hours of work, authority, or position. Constructive dismissal may also include situations where an employer bugs or abuses a staff member, or an employer offers a staff member an ultimatum to “stop or be fired” and the worker resigns in response.
The employee would have to resign in action to the change within an affordable amount of time in order for the company’s actions to be thought about a termination of employment for purposes of the ESA.
Constructive termination is a complex and difficult subject. For additional information on useful termination, please contact the Employment Standards Information Centre at 1-800-531-5551.
Temporary layoff
A staff member is on short-lived layoff when a company cuts down or stops the worker’s work without ending their work (for instance, laying someone off sometimes when there is inadequate work to do). The simple fact that the company does not define a recall date when laying the employee off does not necessarily imply that the lay-off is not temporary. Note, however, that a lay-off, even if planned to be momentary, may result in constructive termination if it is not enabled by the employment agreement.
For the functions of the termination provisions of the ESA, a “week of layoff” is a week in which the staff member made less than half of what they would normally earn (or makes usually) in a week.
A week of layoff does not include any week in which the staff member did not work for several days due to the fact that the employee was unable or offered to work, went through disciplinary suspension, or was not offered with work because of a strike or lockout at their location of work or somewhere else.
Employers are not needed under the ESA to provide workers with a written notice of a short-lived layoff, nor do they need to supply a reason for the lay-off. (They may, however, be required to do these things under a collective arrangement or an employment 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, but less than 35 weeks of layoff in any duration of 52 successive weeks, where:- the employee continues to receive substantial payments from the employer;
or
– the company continues to make payments for the advantage of the employee under a genuine group or employee insurance plan (such as a medical or drug insurance coverage plan) or a legitimate retirement or pension;
or
– the staff member gets additional joblessness benefits;
or
– the employee would be entitled to receive supplemental unemployment but isn’t receiving them because they are used in other places;
or
– the company remembers the employee to work within the time frame approved by the Director of Employment Standards;
or
– the employer recalls the worker within the time frame set out in 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 remembers a staff member who is represented by a trade union within the time set out in a contract between the union and the employer.
If a worker is laid off for a period longer than a momentary layoff as set out above, the company is thought about to have actually terminated the employee’s employment. Generally, the employee will then be entitled to termination pay.
Written notice of termination and termination pay
Under the ESA, a company can terminate the work of a staff member who has been utilized continuously for three months or more if either:
– the company has actually provided the worker appropriate composed notification of termination and the notification period has actually expired
– the employer pays termination pay to the employee where no written notice or less notice than is required is offered
Written notification of termination
A staff member is entitled to notice of termination (or termination pay instead of notification) if they have been continuously utilized for a minimum of 3 months. An individual is considered “used” not just while they are actively working, but likewise throughout whenever 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 amount of notification to which a staff member is entitled depends upon their “period of work”. A staff member’s period of work consists of not only perpetuity while the staff member is actively working but likewise at any time that they are not working however the work relationship still exists, with the following exceptions:
– if a lay-off goes on longer than a temporary lay-off, the staff member’s employment is considered (or thought about) to have been ended on the first day of the lay-off-any time after that does not count as part of the worker’s duration of work, although the staff member might still be employed for purposes of the “constantly employed for 3 months” certification
– if two different periods of employment are separated by more than 13 weeks, just the most current duration counts for purposes of notification of termination
It is possible, in some situations, for an individual to have actually been “continually used” for 3 months or more and yet have a period of employment of less than 3 months. In such scenarios, the employee would be entitled to discover due to the fact that a staff member who has been continually used for a minimum of 3 months is entitled to discover, and the minimum notice entitlement of one week applies to a worker with a duration of employment of any length less than one year.
The following chart specifies the amount of notification required:
Note: Special guidelines determine the amount of notification needed in the case of mass terminations – where the employment of 50 or more employees is terminated at an employer’s establishment within a four-week period.
Requirements during the statutory notice duration
During the statutory notice duration, an employer should:
– not decrease the staff member’s wage rate or modify any other term or condition of employment;
– continue to make whatever contributions would be required to keep the employee’s benefits strategies; and
– pay the staff member the earnings they are entitled to, which can not be less than the employee’s routine earnings for a routine work week each week.
Regular rate
This is a staff member’s rate of spend for each non-overtime hour of work in the employee’s work week.
Regular wages
These are salaries other than overtime pay, getaway pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and severance pay and certain contractual privileges.
Regular work week
For a worker who normally works the very same variety of hours each week, a regular work week is a week of that many hours, not including overtime hours.
Some workers do not have a 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 employees, the “regular salaries” for a “regular work week” is the average amount of the routine salaries earned by the employee in the weeks in which the worker worked throughout the duration of 12 weeks immediately preceding the date the notification was provided.
An employer is not permitted to arrange a staff member’s trip time during the statutory notice period unless the employee-after receiving composed notification of termination of employment-agrees to take their trip time throughout the notification duration.
If a company offers longer notification than is required, the statutory part of the notice period is the tail end of the period that ends on the date of termination.
How to provide written notice
In many cases, written notification of termination of work must be addressed to the employee. It can be supplied personally or by mail, fax or email, as long as shipment can be validated.
There are special rules for offering notification of termination if an employee has an agreement of employment or a cumulative contract that provides seniority rights that enable a staff member who is to be laid off or whose work is to be ended to displace (” bump”) other employees.
In that case, the employer must publish a notification in the workplace (where it will be seen by the staff members) setting out the names, seniority and task category of those employees the company means to end and the date of the proposed termination. The posting of the notice is thought about to be notice of termination, since the date of the posting, to an employee who is “bumped” by a staff member called in the notification. However, this notification of termination should still fulfill the length requirements set out in the ESA.
There are likewise unique rules concerning how notice is supplied when there is a mass termination.
Termination pay
A staff member who does not receive the written notification needed under the ESA needs to be offered termination pay in lieu of notice. Termination pay is a lump sum payment equivalent to the routine salaries for a regular work week that a staff member would otherwise have been entitled to during the composed notification duration. A worker makes vacation pay on their termination pay. Employers should also continue to make whatever contributions would be required to maintain the advantages the staff member would have been entitled to had they continued to be used through the notification period.
Example: Regular work week
Sarah has worked for three and a half years. Now her task has actually been eliminated and her employment has 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 also got 4 percent holiday pay. Because she worked for more than three years but less than 4 years, she is entitled to 3 weeks’ pay in lieu of notice.
Sarah’s routine wages for a routine work week are computed:
$ 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 vacation pay on her termination pay is determined:
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 advantage or pension plans that applied to her for 3 weeks.
Example: No routine work week
Gerry has actually worked at a nursing home for four years. He works weekly, 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 provide Gerry any composed notification of termination. Gerry was ill and off work for employment two of the 12 weeks right away 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 4 weeks of termination pay.
Gerry’s typical earnings per week are calculated:
$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off sick for two weeks therefore these weeks are not included in the calculation of average profits) = $180.00 a week
His termination pay is calculated:
$ 180.00 × 4 weeks = $720.00
Then his vacation 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 should likewise make sure ongoing coverage for any benefit or pension strategies 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 worker’s work is terminated or on the employee’s next routine pay date, whichever is later.
Mass termination
Special rules for notice of termination might 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 “facility”
An “establishment” is an area at which the company continues organization. Separate locations can be thought about one facility if either:
– they lie within the same town, or
– a staff member at one location has contractual seniority rights that extend to the other area, enabling the employee to displace another worker (also called “bumping rights”).
Effective October 26, 2023, in cases of mass termination, the term “facility” consists of a worker’s home, however only if the employee works from home and does not work at any other location where the employer carries on service.
This will require that workers who work specifically remotely be thought about for addition in the count when determining whether 50 or more workers have actually been ended.
Note that where a staff member performs work both from their home and from another place where the company brings on business (for instance, an office), their home is not consisted of in the definition of “facility”. Instead, the employee is considered to have a connection to the workplace area and, therefore, for the function of mass termination, employment the worker is included with regard to that office location.
Example: where multiple areas are considered one “establishment”
ABC Company has a workplace and a storage facility situated in London, ON. Sabrina resides in London and works for ABC Company solely remotely: she performs work for employment the business from home and does not work at the workplace.
For the function of mass termination, the company’s London office, London storage facility and Sabrina’s London home are considered one “establishment.”
Employer commitments in a mass termination
When a mass termination happens, the employer must complete and provide the Form 1 (Notice of termination of work) to the Director of Employment Standards (Director) by:
– email 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 shipment to the Director’s workplace, if the delivery can be confirmed.
The office of the Director of Employment Standards is located on the 9th flooring, 400 University Avenue, Toronto ON M7A 1T7.
Any notice to the affected staff members is ruled out to have been given until the Form 1 is received by the Director; in other words, notification of mass termination is not effective until the Director receives the Form 1.
In addition to providing staff members with individual notifications of termination, the employer must, on the first day of the notice period:
– publish a copy of the Form 1 provided to the Director in the office where it will come to the attention of the impacted workers.
– supply a copy of the Form 1 to each impacted staff member.
The quantity of notice employees need to receive in a mass termination is not based upon the workers’ length of work, however on the number of employees who have actually been ended. A company must offer:
– 8 weeks notice if the employment of 50 to 199 staff members is to be terminated
– 12 weeks observe if the employment of 200 to 499 workers is to be ended
– 16 weeks observe if the employment of 500 or more employees is to be terminated
Exception to the mass termination rules
The mass termination rules do not apply if these 2 things use:
– the number of workers whose work is being ended represents not more than 10 percent of the employees who have been used for at least 3 months at the facility
– none of the terminations are triggered by the irreversible discontinuance of all or part of the employer’s organization at the establishment
Mass termination: resignation by a worker
An employee who has actually received termination notification under the mass termination rules who desires to resign before the termination date supplied in the company’s notification must give the company at least one week’s written notice of resignation if the worker has actually been utilized for less than 2 years. If the employment period has actually been two years or more, the staff member should provide at least 2 weeks’ composed notice of resignation. However, the employee does not have to notify of resignation if the employer constructively dismisses the staff member or breaches a regard to the agreement.
Temporary work after termination date in notice
An employer can offer work to a staff member who has been notified of termination on a temporary basis in the 13-week duration after the termination date set out in the notice without affecting the initial date of the termination and without being required to provide any additional notice of termination to the worker when the momentary work ends.
If a worker works beyond the 13-week duration after the termination date and then has their employment terminated, the worker will be entitled to a brand-new written notification of termination as if the previous notification had never ever been offered. The employee’s period of employment will then also consist of the duration of short-lived work.
Recall rights
A “recall right” is the right of a staff member on a layoff to be recalled to work by their employer under a term or condition of work. This right is typically discovered in collective arrangements.
A worker 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
– give up their recall rights and get termination pay (and discontinuance wage, if they were entitled to discontinuance wage).
If an employee is entitled to both termination pay and discontinuance wage, they must make the exact same option for both.
If a staff member who is not represented by a trade union chooses to keep their recall rights or stops working to make an option, the company should send out the quantity of the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.
If a worker who is represented by a trade union elects to keep their recall rights or fails to choose, the company and the trade union should try to come to an arrangement to hold the termination pay (and severance pay, if any) in trust for the staff member. If they can not come to a plan, and the trade union encourages the employer and the Director of Employment Standards in composing that efforts have actually failed, the employer should send the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.
If an employee selects to quit their recall rights or if the recall rights end, the cash that is kept in trust should be sent to the staff member.
If the worker accepts a recall back to work, the cash that is kept in trust will be returned to the company.
Exemptions to see of termination or termination pay
Much of these exemptions are complex. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you need more details. Please also describe the unique rule tool.
The notification of termination and termination pay requirements of the ESA do not use to a staff member who:
– is guilty of wilful misconduct, disobedience or wilful disregard of responsibility that is not unimportant and has not been excused by the company. Note: “wilful” includes when a staff member meant the resulting repercussion or acted recklessly if they knew or need to have known the impacts their conduct would have. Poor work conduct that is unexpected or unintended is generally ruled out wilful;
– was worked with for a specific length of time or up until the conclusion of a particular job. However, such a staff member will be entitled to notice of termination or termination pay if:- the work ends before the term expires or the job is finished; or
– the term ends or the task is not completed more than 12 months after the employment began; or
– the employment continues for 3 months or more after the term expires or the job is finished;
See likewise: Employment Standards Self-Service Tool
Wrongful termination
Rights higher than ESA notification of termination, termination pay, discontinuance wage
The rules under the ESA about termination and severance of work are minimum requirements. Some staff members may have rights under the common law that are greater than the rights to notice of termination (or termination pay) and discontinuance wage under the ESA. A staff member might wish to sue their previous company in court for “wrongful dismissal”. Employees ought to be aware that they can not take legal action against a company for wrongful dismissal and submit a claim for termination pay or severance pay with the ministry for the exact same termination or severance of employment. An employee needs to pick one or the other. Employees might want to get legal advice worrying their rights.
