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Termination Of Employment

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

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

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

– «constructively» dismisses an employee and the staff member resigns, in response, within a sensible time;

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

In a lot of cases, when an employer ends the employment of a staff member who has actually been continually utilized for 3 months, the company should the employee with either written notice of termination, termination pay or a mix (as long as the notification 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 an employer to offer a worker a reason their employment is being ended. There are, however, some scenarios where an employer can not end an employee’s work even if the employer is prepared to give appropriate written notification or termination pay. For instance, an employer can not end someone’s employment, or punish them in any other way, if any part of the factor for the termination of work is based upon the employee asking concerns about the ESA or working out a right under the ESA, such as refusing to work in excess of the everyday 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 employees are not entitled to notice of termination or termination pay under the ESA. Examples include: workers who are guilty of wilful misconduct, disobedience, or wilful disregard of task that is not trivial and has not been condoned by the employer. Other examples consist of construction staff members, employees on short-lived layoff, employees who decline an offer of reasonable alternative employment and employees who have actually been used less than three months.

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

The termination-of-employment guidelines are entirely different from any entitlements a staff member might have to be paid discontinuance wage under the ESA.

Constructive dismissal

A positive dismissal might take place when a company makes a considerable modification to a fundamental term or condition of an employee’s work without the employee’s actual or implied consent.

For example, a worker might be constructively dismissed if the company makes modifications to the employee’s conditions of employment that result in a significant decrease in salary or a significant unfavorable modification in such things as the employee’s work area, hours of work, authority, or position. Constructive dismissal might likewise consist of scenarios where a company pesters or abuses an employee, or a company offers a staff member a demand to «stop or be fired» and the employee resigns in reaction.

The worker would need to resign in action to the change within an affordable time period 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 tough topic. To learn more on constructive dismissal, please contact the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A worker is on short-term layoff when a company cuts back or stops the worker’s work without ending their work (for example, laying somebody off sometimes when there is inadequate work to do). The mere reality that the employer does not define a recall date when laying the staff member off does not necessarily mean that the lay-off is not momentary. Note, nevertheless, that a lay-off, even if intended to be short-lived, may lead to constructive dismissal 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 employee earned less than half of what they would ordinarily earn (or earns on average) 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 employee was not able or available to work, went through disciplinary suspension, or was not supplied with work because of a strike or lockout at their place of employment or in other places.

Employers are not needed under the ESA to supply staff members with a composed notice of a momentary layoff, nor do they need to supply a reason for the lay-off. (They may, however, be needed to do these things under a collective contract or an employment agreement.)

Under the ESA, a «short-term layoff» can last:

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

2. more than 13 weeks in any period of 20 successive weeks, but less than 35 weeks of layoff in any duration of 52 consecutive weeks, where:- the employee continues to receive substantial payments from the company;
or

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

– the worker gets additional joblessness benefits;
or

– the worker would be entitled to receive supplemental unemployment benefits however isn’t receiving them because they are employed somewhere else;
or

– the employer recalls the worker to work within the time frame authorized by the Director of Employment Standards;
or

– the employer recalls the employee within the time frame set out in an arrangement 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 staff member who is represented by a trade union within the time set out in a contract between the union and the employer.

If an employee is laid off for a duration longer than a short-term layoff as set out above, the employer is considered to have terminated the worker’s employment. Generally, the employee will then be entitled to termination pay.

Written notification of termination and termination pay

Under the ESA, an employer can end the work of a worker who has actually been used continuously for three months or more if either:

– the employer has provided the employee proper written notification of termination and the notification period has actually expired

– the employer pays termination pay to the staff member where no composed notification or less notice than is required is offered

Written notice of termination

An employee is entitled to observe of termination (or termination pay instead of notice) if they have been continuously employed for at least three months. A person is thought about «employed» not just while they are actively working, but likewise during whenever in which they are not working but the work relationship still exists (for instance, time in which the worker is off ill or on leave or on lay-off).

The quantity of notice to which a staff member is entitled depends on their «period of work». An employee’s period of employment consists of not only all time while the staff member 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-lived lay-off, the staff member’s employment is considered (or thought about) to have actually been terminated on the first day of the lay-off-any time after that does not count as part of the worker’s period of work, although the staff member might still be used for purposes of the «continually utilized for three months» qualification

– if two separate durations of employment are separated by more than 13 weeks, only the most recent period counts for purposes of notification of termination

It is possible, in some situations, for a person to have been «constantly used» for three 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 see because a staff member who has been continually used for a minimum of three 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 quantity of notice required:

Note: Special rules determine the amount of notice required in the case of mass terminations – where the employment of 50 or more staff members is terminated at a company’s facility within a four-week period.

Requirements throughout the statutory notice duration

During the statutory notice duration, a company needs to:

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

– continue to make whatever contributions would be required to preserve the staff member’s advantages plans; and

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

Regular rate

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

Regular earnings

These are earnings aside from overtime pay, getaway pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and discontinuance wage and certain contractual entitlements.

Regular work week

For an employee who typically works the very same number of hours every week, a regular work week is a week of that many hours, not consisting of overtime hours.

Some employees do not have a routine work week. That is, they do not work the very same variety of hours weekly or they are paid on a basis besides time. For these employees, the «regular salaries» for a «regular work week» is the typical amount of the regular earnings earned by the employee in the weeks in which the staff member worked during the period of 12 weeks immediately preceding the date the notice was offered.

An employer is not allowed to set up an employee’s vacation time throughout the statutory notification duration unless the employee-after getting composed notice of termination of employment-agrees to take their getaway time throughout the notification period.

If an employer supplies longer notice than is required, the statutory part of the notice period is the tail end of the duration that ends on the date of termination.

How to provide written notification

Most of the times, written notice of termination of employment should be resolved to the employee. It can be supplied in person or by mail, fax or email, as long as shipment can be verified.

There are unique rules for offering notice of termination if an employee has an agreement of employment or a collective contract that provides seniority rights that allow a staff member who is to be laid off or whose employment is to be ended to displace (» bump») other employees.

Because case, the company needs to publish a notification in the work environment (where it will be seen by the staff members) setting out the names, seniority and job classification of those workers the company intends to end and the date of the proposed termination. The publishing of the notice is considered to be notification of termination, since the date of the publishing, to a staff member who is «bumped» by a worker named in the notification. However, this notice of termination should still meet the length requirements set out in the ESA.

There are likewise special guidelines concerning how notice is offered when there is a mass termination.

Termination pay

A worker who does not receive the written notification required under the ESA needs to be offered termination pay in lieu of notification. Termination pay is a swelling sum payment equal to the routine salaries for a routine work week that a worker would otherwise have been entitled to throughout the composed notice period. A staff member earns getaway pay on their termination pay. Employers must likewise continue to make whatever contributions would be needed to maintain the advantages the employee would have been entitled to had they continued to be employed through the notice period.

Example: Regular work week

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

Sarah worked 40 hours a week every week and was paid $20.00 an hour. She also received 4 percent getaway pay. Because she worked for more than three years but less than 4 years, she is entitled to 3 weeks’ pay in lieu of notification.

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 computed:

$ 800.00 X 3 weeks = $2,400.00

Then her vacation 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 also make sure continued protection for any advantage or pension that used to her for three weeks.

Example: No routine work week

Gerry has actually worked at a nursing home for four years. He works every week, but his hours differ 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 offer Gerry any composed notice of termination. Gerry was ill and off work for two of the 12 weeks right away preceding the day his work was terminated. Gerry made $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 average earnings each week are determined:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off sick for 2 weeks therefore these weeks are not consisted of in the calculation of average revenues) = $180.00 a week

His termination pay is computed:

$ 180.00 × 4 weeks = $720.00

Then his holiday pay on his termination pay is determined:

6% of $720.00 = $43.20

Finally, his holiday pay is contributed to his termination pay:

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The employer should also guarantee continued protection for any benefit or pension strategies that applied to him for four weeks.

When to pay termination pay

Termination pay must be paid to a staff member either seven days after the staff member’s work is ended or on the worker’s next regular pay date, whichever is later on.

Mass termination

Special rules for notice of termination may apply in cases of mass termination (when a company is terminating 50 or more staff members at its establishment within a four-week duration).

Meaning of «establishment»

An «facility» is a location at which the employer carries on business. Separate areas can be considered one establishment if either:

– they lie within the same town, or

– an employee at one place has legal seniority rights that extend to the other area, enabling the employee to displace another employee (likewise called «bumping rights»).

Effective October 26, 2023, in cases of mass termination, the term «establishment» consists of a worker’s home, however only if the worker works from home and does not work at any other place where the company continues service.

This will require that staff members who work solely remotely be considered for addition in the count when figuring out whether 50 or more staff members have actually been ended.

Note that where an employee carries out work both from their home and from another area where the employer continues organization (for referall.us instance, an office), their home is not consisted of in the meaning of «facility». Instead, the employee is considered to have a connection to the office area and, for that reason, for the purpose of mass termination, the staff member is included with regard to that workplace area.

Example: where numerous areas are considered one «establishment»

ABC Company has an office and a warehouse located in London, ON. Sabrina resides in London and works for ABC Company solely from another location: she performs work for the company from home and does not work at the office.

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

Employer obligations in a mass termination

When a mass termination occurs, the company should complete and provide 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.

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

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

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

Any notice to the impacted staff members is not thought about to have been provided up until the Form 1 is gotten by the Director; in other words, notification of mass termination is ineffective up until the Director gets the Form 1.

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

– post a copy of the Form 1 offered 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 employee.

The quantity of notification employees should receive in a mass termination is not based upon the staff members’ length of employment, however on the number of workers who have been ended. A company must offer:

– 8 weeks discover if the employment of 50 to 199 employees is to be ended

– 12 weeks notice if the work of 200 to 499 workers is to be terminated

– 16 weeks discover if the employment of 500 or more employees is to be ended

Exception to the mass termination rules

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

– the number of workers whose work is being ended represents not more than 10 per cent of the employees who have been utilized for a minimum of three months at the facility

– none of the terminations are triggered by the permanent discontinuance of all or part of the employer’s organization at the establishment

Mass termination: resignation by a staff member

An employee who has received termination notice under the mass termination rules who wishes to resign before the termination date provided in the employer’s notice should offer the company a minimum of one week’s composed notification of resignation if the employee has actually been used for less than two years. If the employment period has actually been 2 years or more, the employee must give a minimum of 2 weeks’ composed notification of resignation. However, the worker does not need to notify of resignation if the employer constructively dismisses the employee or breaches a regard to the contract.

Temporary work after termination date in notification

An employer can provide work to an employee who has been provided notification of termination on a temporary basis in the 13-week period after the termination date set out in the notice without impacting the original date of the termination and without being needed to provide any further notice of termination to the staff member when the short-term work ends.

If an employee works beyond the 13-week period after the termination date and after that has their employment ended, the employee will be entitled to a brand-new written notification of termination as if the previous notice had never been provided. The staff member’s period of work will then also 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 company under a term or condition of employment. This right is commonly discovered in collective contracts.

A worker 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 pick 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 receive termination pay (and severance pay, if they were entitled to severance pay).

If a worker is entitled to both termination pay and discontinuance wage, they need to make the same option for both.

If an employee who is not represented by a trade union chooses to keep their recall rights or stops working to choose, the company should send the quantity of the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the money in trust.

If a worker who is represented by a trade union chooses to keep their recall rights or stops working to make an option, the company and the trade union need to try to come to a plan to hold the termination pay (and discontinuance wage, if any) in trust for the employee. 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 failed, the company should send the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the money in trust.

If a worker picks to provide up their recall rights or if the recall rights end, the cash that is kept in trust must be sent out to the staff member.

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

Exemptions to see of termination or termination pay

Many of these exemptions are complicated. Please contact the Employment Standards Information Centre, 1-800-531-5551, if you require more details. Please also refer to the special guideline tool.

The notice of termination and termination pay requirements of the ESA do not apply to a staff member who:

– is guilty of wilful misconduct, disobedience or wilful overlook of task that is not minor and has not been excused by the employer. Note: «wilful» includes when a staff member meant the resulting effect or acted recklessly if they knew or ought to have known the results their conduct would have. Poor work conduct that is accidental or unintended is typically ruled out wilful;

– was worked with for a particular length of time or until the completion of a specific task. However, such a staff member will be entitled to observe of termination or termination pay if:- the work ends before the term expires or the job is finished; or

– the term ends or the task is not completed more than 12 months after the employment started; or

– the employment continues for three 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 notice of termination, termination pay, discontinuance wage

The guidelines under the ESA about termination and severance of work are minimum requirements. Some staff members may have rights under the common law that are higher than the rights to discover of termination (or termination pay) and severance pay under the ESA. An employee may desire to sue their former company in court for «wrongful termination». Employees ought to be conscious that they can not take legal action against a company for wrongful dismissal and file a claim for termination pay or discontinuance wage with the ministry for the very same termination or severance of work. A staff member must pick one or the other. Employees might want to acquire legal advice concerning their rights.