Termination Of Employment
A variety of expressions are typically utilized to describe circumstances when work is terminated. These consist of “let go,” “discharged,” “dismissed,” “fired” and “completely laid off.”
Under the Employment Standards Act, 2000 (ESA) a person’s employment is terminated if the company:
– dismisses or stops using an employee, consisting of where a staff member is no longer used due to the bankruptcy or insolvency of the company;
– “constructively” dismisses a staff member and the worker resigns, in reaction, within a sensible time;
– lays an employee off for a period that is longer than a “momentary layoff”.
Most of the times, when a company ends the work of an employee who has been continually used for three months, the company should offer the worker 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 worker is entitled to get).
The ESA does not require an employer to provide an employee a reason their work is being terminated. There are, however, some scenarios where an employer can not end a worker’s work even if the employer is prepared to offer appropriate composed notice or termination pay. For example, a company can not end somebody’s employment, or punish them in any other way, if any part of the reason for the termination of employment is based upon the employee asking concerns about the ESA or working out a right under the ESA, such as declining to work in excess of the day-to-day or weekly hours of work maximums, or taking a leave of absence 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 include: staff members who are guilty of wilful misconduct, disobedience, or wilful overlook of responsibility that is not unimportant and has not been condoned by the company. Other examples consist of construction employees, employees on temporary layoff, staff members who refuse an offer of reasonable alternative employment and employees who have been used less than three months.
There are a variety of other exemptions to the termination of employment arrangements of the ESA. See “Exemptions to discover of termination or termination pay.” Please also describe the unique rule tool.
The termination-of-employment rules are completely different from any privileges an employee might have to be paid severance pay under the ESA.
Constructive termination
A positive termination might happen when a company makes a substantial change to an essential term or condition of a worker’s employment without the staff member’s actual or implied permission.
For example, an employee might be constructively dismissed if the company makes changes to the staff member’s terms of work that result in a significant decrease in wage or a substantial negative modification in such things as the employee’s work location, hours of work, authority, or position. Constructive dismissal may also consist of circumstances where an employer bugs or abuses a worker, or an employer offers a worker a demand to “quit or be fired” and the staff member resigns in reaction.
The staff member would have to resign in action to the change within a reasonable time period in order for the company’s actions to be considered a termination of work for functions of the ESA.
Constructive dismissal is a complex and tough topic. To learn more on constructive termination, please call the Employment Standards Information Centre at 1-800-531-5551.
Temporary layoff
A worker is on momentary layoff when an employer cuts back or stops the employee’s work without ending their employment (for instance, laying somebody off sometimes when there is inadequate work to do). The mere fact that the company does not specify a recall date when laying the staff member off does not necessarily indicate that the lay-off is not momentary. Note, however, that a lay-off, even if intended to be temporary, may result in positive termination if it is not enabled by the employment agreement.
For the purposes of the termination arrangements of the ESA, a “week of layoff” is a week in which the staff member made less than half of what they would generally earn (or makes usually) in a week.
A week of layoff does not consist of any week in which the worker did not work for one or more days because the worker was unable or offered to work, underwent disciplinary suspension, or was not supplied with work because of a strike or lockout at their location of work or in other places.
Employers are not required under the ESA to supply staff members with a written notice of a short-lived layoff, nor do they have to supply a factor for the lay-off. (They may, nevertheless, be required to do these things under a cumulative contract or an employment agreement.)
Under the ESA, a “short-lived 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 duration of 20 successive weeks, however less than 35 weeks of layoff in any duration of 52 consecutive weeks, where:- the worker continues to get significant payments from the employer;
or
– the company continues to pay for the advantage of the staff member under a legitimate group or employee insurance coverage strategy (such as a medical or drug insurance strategy) or a genuine retirement or pension plan;
or
– the staff member gets supplementary joblessness advantages;
or
– the staff member would be entitled to receive extra joblessness advantages but isn’t getting them due to the fact that they are used in other places;
or
– the company recalls the worker to work within the time frame authorized by the Director of Employment Standards;
or
– the employer remembers the worker within the time frame set out in an agreement with a staff member who is not represented by a trade union;
or
3. a layoff longer than a layoff described in ‘B’ where the employer remembers a staff member who is represented by a trade union within the time set out in an arrangement in between the union and the company.
If a staff member is laid off for a period longer than a momentary layoff as set out above, the employer is thought about to have actually terminated the worker’s work. Generally, the worker will then be entitled to termination pay.
Written notification of termination and termination pay
Under the ESA, a company can end the work of a worker who has actually been employed constantly for three months or more if either:
– the employer has actually given the employee proper written notice of termination and the notice duration has ended
– the company pays termination pay to the employee where no written notification or less notice than is needed is provided
Written notification of termination
A staff member is entitled to discover of termination (or termination pay rather of notice) if they have been constantly utilized for a minimum of three months. An individual is considered “used” not only while they are actively working, however also throughout at any time in which they are not working however the work relationship still exists (for instance, time in which the employee is off sick or on leave or on lay-off).
The quantity of notification to which an employee is entitled depends upon their “duration of work”. A worker’s period of employment consists of not only all time while the staff member is actively working but also any time that they are not working however the employment relationship still exists, with the following exceptions:
– if a lay-off goes on longer than a momentary lay-off, the staff member’s work is considered (or considered) to have been ended on the first day of the lay-off-any time after that does not count as part of the worker’s period of employment, although the staff member might still be employed for functions of the “continuously employed for 3 months” certification
– if two different durations 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 circumstances, for an individual to have been “continually employed” for 3 months or more and yet have a duration of work of less than three months. In such scenarios, the staff member would be entitled to discover because an employee who has actually been constantly used for at least three months is entitled to discover, and the minimum notice privilege of one week applies to a worker with a period of employment of any length less than one year.
The following chart defines the amount of notification needed:
Note: Special rules identify the quantity of notification required when it comes to mass terminations – where the employment of 50 or more employees is terminated at an employer’s facility within a four-week duration.
Requirements during the statutory notification period
During the statutory notice period, a company should:
– not reduce the worker’s wage rate or alter any other term or condition of employment;
– continue to make whatever contributions would be needed to maintain the employee’s advantages plans; and
– pay the worker the incomes they are entitled to, which can not be less than the employee’s routine earnings for a regular work week every week.
Regular rate
This is a worker’s rate of spend for each non-overtime hour of operate in the employee’s work week.
Regular salaries
These are earnings aside from overtime pay, holiday pay, public holiday pay, pay, domestic or sexual violence leave pay, termination of task pay, termination pay and severance pay and certain contractual privileges.
Regular work week
For a staff member who typically works the very same variety of hours every week, a routine work week is a week of that numerous hours, not consisting of 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 employees, the “regular wages” for a “regular work week” is the typical amount of the routine wages made by the employee in the weeks in which the worker worked during the duration of 12 weeks right away preceding the date the notice was offered.
An employer is not permitted to set up an employee’s trip time throughout the statutory notification duration unless the employee-after getting composed notice of termination of employment-agrees to take their trip time throughout the notification duration.
If a company offers longer notice than is needed, the statutory part of the notification duration is the tail end of the period that ends on the date of termination.
How to provide written notice
In the majority of cases, composed notification of termination of employment need to be addressed to the worker. It can be offered in individual or by mail, fax or email, as long as delivery can be confirmed.
There are unique rules for supplying notification of termination if a staff member has an agreement of employment or a cumulative agreement that provides seniority rights that allow an employee who is to be laid off or whose employment is to be ended to displace (” bump”) other employees.
In that case, the employer must post a notification in the office (where it will be seen by the workers) setting out the names, seniority and task classification of those employees the company intends to terminate and the date of the proposed termination. The posting of the notice is thought about to be notice of termination, as of the date of the publishing, to a worker who is “bumped” by a staff member called in the notice. However, this notification of termination must still fulfill the length requirements set out in the ESA.
There are also unique guidelines regarding how notice is provided when there is a mass termination.
Termination pay
An employee who does not receive the written notice required under the ESA needs to be offered termination pay in lieu of notification. Termination pay is a lump amount payment equivalent to the routine incomes for a routine work week that a staff member would otherwise have been entitled to throughout the composed notification period. A staff member earns vacation pay on their termination pay. Employers should also continue to make whatever contributions would be required to maintain the advantages the employee would have been entitled to had they continued to be employed through the notification duration.
Example: Regular work week
Sarah has actually worked for three and a half years. Now her job has been removed and her work has actually been terminated. Sarah was not provided any written notification of termination.
Sarah worked 40 hours a week each week and was paid $20.00 an hour. She also received 4 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 regular earnings for a regular 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 trip pay on her termination pay is determined:
4% of $2,400.00 = $96.00
Finally, her trip pay is added to her termination pay:
$ 2400.00 + $96.00 = $2,496.00
Result: Sarah is entitled to $2,496.00. The company should likewise ensure ongoing coverage for any benefit or pension plans that applied to her for three weeks.
Example: No routine work week
Gerry has operated at a nursing home for 4 years. He works every week, 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 eliminated his position and did not provide Gerry any composed notice of termination. Gerry was ill and off work for two of the 12 weeks immediately preceding the day his employment was terminated. Gerry made $1,800.00 in the 12 weeks before the day on which his work ended.
Gerry is entitled to 4 weeks of termination pay.
Gerry’s average incomes weekly are calculated:
$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for 2 weeks therefore these weeks are not consisted of in the estimation of average incomes) = $180.00 a week
His termination pay is computed:
$ 180.00 × 4 weeks = $720.00
Then his getaway pay on his termination pay is determined:
6% of $720.00 = $43.20
Finally, his holiday pay is added to his termination pay:
$ 720.00 + $43.20 = $763.20
Result: Gerry is entitled to $763.20. The company must also ensure continued protection for any benefit or pension plans that used to him for four weeks.
When to pay termination pay
Termination pay must be paid to an employee either seven days after the employee’s work is terminated or on the worker’s next routine pay date, whichever is later.
Mass termination
Special rules for notice of termination may apply in cases of mass termination (when a company is terminating 50 or more workers at its facility within a four-week period).
Meaning of “establishment”
An “facility” is a location at which the employer carries on company. Separate areas can be considered one establishment if either:
– they are situated within the exact same town, or
– a worker at one place has contractual seniority rights that encompass the other area, enabling the staff member to displace another worker (also called “bumping rights”).
Effective October 26, 2023, in cases of mass termination, the term “establishment” includes an employee’s home, but only if the staff member works from home and does not work at any other location where the company continues business.
This will need that employees who work specifically from another location be thought about for addition in the count when figuring out whether 50 or more employees have actually been ended.
Note that where a staff member performs work both from their home and from another area where the employer brings on organization (for example, an office), their home is not consisted of in the definition of “facility”. Instead, the staff member is considered to have a connection to the workplace location and, for that reason, for the function of mass termination, the worker is consisted of with regard to that office place.
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 exclusively from another location: she carries out work for the company from home and does not work at the office.
For the purpose of mass termination, the company’s London workplace, London warehouse and Sabrina’s London home are thought about one “establishment.”
Employer obligations in a mass termination
When a mass termination takes place, the employer should finish and deliver the Form 1 (Notice of termination of employment) to the Director of Employment Standards (Director) by:
– email to esa_form1_notice@ontario.ca.
– fax to (416) 326-7061.
– 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 shipment can be confirmed.
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 impacted workers is ruled out to have been provided until the Form 1 is gotten by the Director; in other words, notification of mass termination is ineffective up until the Director receives the Form 1.
In addition to offering workers with private notifications of termination, the company must, on the first day of the notification duration:
– publish a copy of the Form 1 offered to the Director in the workplace where it will pertain to the attention of the affected employees.
– provide a copy of the Form 1 to each impacted staff member.
The quantity of notification staff members should get in a mass termination is not based upon the employees’ length of work, but on the variety of workers who have been terminated. A company should offer:
– 8 weeks observe if the employment of 50 to 199 employees is to be ended
– 12 weeks notice if the employment of 200 to 499 staff members is to be ended
– 16 weeks see if the work of 500 or more employees is to be terminated
Exception to the mass termination rules
The mass termination rules do not use if these 2 things use:
– the variety of employees whose employment is being ended represents not more than 10 percent of the employees who have been used for a minimum of three months at the establishment
– none of the terminations are triggered by the permanent discontinuance of all or part of the company’s business at the facility
Mass termination: resignation by an employee
An employee who has received termination notification under the mass termination rules who desires to resign before the termination date offered in the employer’s notification should offer the employer a minimum of one week’s written notification of resignation if the staff member has been utilized for less than two years. If the employment period has actually been two years or more, the staff member must provide at least 2 weeks’ written notice of resignation. However, the staff member does not have to offer notice of resignation if the company constructively dismisses the worker or breaches a term of the agreement.
Temporary work after termination date in notification
A company can offer work to an employee who has been notified of termination on a momentary basis in the 13-week duration after the termination date set out in the notice without impacting the original date of the termination and without being required to supply any additional notification of termination to the worker when the short-lived work ends.
If an employee works beyond the 13-week period after the termination date and after that has their employment ended, the worker will be entitled to a brand-new composed notification of termination as if the previous notice had never ever been provided. The staff member’s duration of employment will then also include the duration of momentary 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 contracts.
A staff member who has recall rights and who is entitled to termination pay due to the fact that of a layoff of 35 weeks or more might choose 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 severance pay).
If a staff member is entitled to both termination pay and discontinuance wage, they should make the very same choice for both.
If a worker who is not represented by a trade union elects 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 money 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 try to come to a plan 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 advises the company and the Director of Employment Standards in writing that efforts have actually failed, the company should send the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, referall.us who holds the cash in trust.
If a worker chooses to quit their recall rights or if the recall rights expire, the cash that is held in trust must be sent to the staff member.
If the staff member accepts a recall back to work, the cash that is held in trust will be returned to the company.
Exemptions to see of termination or termination pay
Many of these exemptions are complicated. Please call the Employment Standards Information Centre, 1-800-531-5551, if you require more info. Please also refer to the special rule tool.
The notice of termination and termination pay requirements of the ESA do not use to an employee who:
– is guilty of wilful misbehavior, disobedience or wilful neglect of task that is not insignificant and has actually not been condoned by the company. Note: “wilful” consists of when a worker meant the resulting repercussion or acted recklessly if they understood or ought to have understood the effects their conduct would have. Poor work conduct that is unintentional or unintentional is generally not considered wilful;
– was hired for a specific length of time or till the conclusion of a particular job. However, such an employee will be entitled to observe of termination or termination pay if:- the work ends before the term expires or the task is finished; or
– the term expires or the job is not finished more than 12 months after the employment started; or
– the work continues for 3 months or more after the term expires or the task is completed;
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 employment are minimum requirements. Some workers might have rights under the common law that are higher than the rights to observe of termination (or termination pay) and severance pay under the ESA. A worker may wish to sue their previous company in court for “wrongful termination”. Employees must be aware that they can not take legal action against a company for wrongful termination and sue for termination pay or discontinuance wage with the ministry for the same termination or severance of work. A staff member should choose one or the other. Employees may want to acquire legal advice concerning their rights.