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Termination Of Employment

A variety of expressions are frequently used to describe situations when work is ended. These include “let go,” “released,” “dismissed,” “fired” and “permanently laid off.”

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

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

– “constructively” dismisses a staff member and the staff member resigns, in reaction, within a reasonable time;

– lays a staff member off for a duration that is longer than a “short-lived layoff”.

For the most part, when a company ends the employment of an employee who has actually been continually used for 3 months, the employer should supply the worker with either composed notice 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 receive).

The ESA does not require an employer to offer a worker a reason their employment is being terminated. There are, however, some situations where a company can not end a worker’s employment even if the company is prepared to offer proper composed notification or termination pay. For instance, an employer can not end someone’s employment, employment or employment penalize them in any other method, if any part of the reason for the termination of work is based upon the staff member asking questions about the ESA or exercising a right under the ESA, such as refusing to work in excess of the daily or weekly hours of work optimums, or taking a leave of lack defined in the ESA. Please see the chapter on reprisals.

Qualifying for termination notice or pay in lieu

Certain employees are not entitled to observe of termination or termination pay under the ESA. Examples consist of: staff members who are guilty of wilful misconduct, disobedience, employment or wilful neglect of responsibility that is not unimportant and has not been condoned by the employer. Other examples include building staff members, staff members on temporary layoff, staff members who refuse an offer of sensible alternative work and employees who have been utilized less than three months.

There are a number of other exemptions to the termination of employment provisions of the ESA. See “Exemptions to notice of termination or termination pay.” Please also describe the unique rule tool.

The termination-of-employment rules are completely different from any privileges a staff member might need to be paid discontinuance wage under the ESA.

Constructive termination

A useful dismissal might take place when a company makes a significant modification to an essential term or condition of a staff member’s work without the worker’s real or implied authorization.

For example, a worker may be constructively dismissed if the employer makes changes to the worker’s terms of employment that lead to a considerable reduction in salary or a significant negative modification in such things as the employee’s work place, hours of work, authority, or position. Constructive dismissal might also consist of circumstances where an employer harasses or abuses a staff member, or a company gives an employee a warning to “stop or be fired” and the staff member resigns in action.

The staff member would have to resign in reaction to the modification within a sensible time period in order for the company’s actions to be thought about a termination of work for purposes of the ESA.

Constructive termination is a complex and hard topic. For additional information on useful termination, please call the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

An employee is on temporary layoff when a company 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 truth that the company does not specify a recall date when laying the employee off does not necessarily suggest that the lay-off is not short-term. Note, nevertheless, that a lay-off, even if planned to be short-lived, may lead to positive dismissal if it is not permitted by the employment contract.

For the functions 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 normally earn (or earns usually) in a week.

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

Employers are not needed under the ESA to provide employees with a composed notification of a short-lived layoff, nor do they have to offer a factor for the lay-off. (They may, nevertheless, be required to do these things under a collective contract or an employment agreement.)

Under the ESA, a “momentary 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 duration of 20 consecutive weeks, however less than 35 weeks of layoff in any period of 52 consecutive weeks, where:- the staff member continues to get substantial payments from the company;
or

– the company continues to pay for the benefit of the employee under a legitimate group or staff member insurance coverage plan (such as a medical or drug insurance coverage plan) or a legitimate retirement or pension;
or

– the worker gets supplementary welfare;
or

– the employee would be entitled to receive supplemental welfare however isn’t getting them due to the fact that they are used somewhere else;
or

– the employer remembers the employee to work within the time frame approved by the Director of Employment Standards;
or

– the company recalls 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 explained in ‘B’ where the employer recalls a worker who is represented by a trade union within the time set out in an arrangement in between the union and the company.

If a worker is laid off for a period longer than a short-term layoff as set out above, the employer is thought about to have actually terminated the worker’s work. Generally, the employee will then be entitled to termination pay.

Written notice of termination and termination pay

Under the ESA, an employer can terminate the work of an employee who has been utilized continuously for 3 months or more if either:

– the company has given the worker proper written notice of termination and the notification period has ended

– the company pays termination pay to the employee where no written notification or less notification than is needed is offered

Written notice of termination

A staff member is entitled to see of termination (or termination pay instead of notice) if they have been continuously used for a minimum of three months. An individual is thought about “employed” 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 instance, time in which the staff member is off sick or on leave or on lay-off).

The quantity of notification to which an employee is entitled depends upon their “period of employment”. A staff member’s period of work consists of not only all time while the worker is actively working but also 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 short-lived lay-off, the staff member’s employment is considered (or considered) to have been ended on the very first day of the lay-off-any time after that does not count as part of the employee’s period of employment, although the staff member might still be utilized for functions of the “continually used for 3 months” certification

– if two separate periods of work are separated by more than 13 weeks, just the most recent duration counts for functions of notice of termination

It is possible, in some situations, for an individual to have been “continually utilized” for 3 months or more and yet have a period of work of less than 3 months. In such scenarios, the worker would be entitled to observe due to the fact that an employee who has actually been constantly used for a minimum of 3 months is entitled to notice, and the minimum notice entitlement of one week applies to an employee with a period of work of any length less than one year.

The following chart specifies the quantity of notice required:

Note: Special rules determine the quantity of notification needed in the case of mass terminations – where the work of 50 or more workers 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 lower the worker’s wage rate or alter any other term or condition of employment;

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

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

Regular rate

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

Regular earnings

These are wages aside from overtime pay, trip pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of task pay, termination pay and discontinuance wage and certain legal privileges.

Regular work week

For a staff member who usually works the exact same number of hours each week, a regular work week is a week of that lots of hours, not consisting of overtime hours.

Some workers do not have a routine work week. That is, they do not work the same variety of hours every week or employment they are paid on a basis besides time. For these employees, the “routine salaries” for a “routine work week” is the typical amount of the routine salaries earned by the staff member in the weeks in which the staff member worked throughout the period of 12 weeks immediately preceding the date the notification was provided.

An employer is not enabled to schedule a staff member’s trip time during the statutory notice period unless the employee-after getting written notice of termination of employment-agrees to take their getaway time throughout the notice period.

If an employer supplies 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 many cases, composed notification of termination of work should be dealt with to the staff member. It can be offered face to face or by mail, fax or e-mail, as long as delivery can be validated.

There are unique guidelines for offering notice of termination if an employee has a contract of work or a cumulative contract that offers seniority rights that permit a worker who is to be laid off or whose work is to be terminated to displace (” bump”) other workers.

In that case, the company must post a notification in the work environment (where it will be seen by the workers) setting out the names, seniority and job classification of those staff members the company means to terminate and the date of the proposed termination. The publishing of the notice is thought about to be notice of termination, since the date of the posting, to an employee who is “bumped” by an employee called in the notice. However, this notice of termination need to still satisfy the length requirements set out in the ESA.

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

Termination pay

An employee who does not receive the composed notification needed under the ESA should be offered termination pay in lieu of notification. Termination pay is a lump sum payment equal to the regular incomes for a routine work week that an employee would otherwise have actually been entitled to during the written notice duration. A staff member makes holiday pay on their termination pay. Employers should also continue to make whatever contributions would be needed to maintain the benefits the employee would have been entitled to had they continued to be used through the notification duration.

Example: Regular work week

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

Sarah worked 40 hours a week every week and employment was paid $20.00 an hour. She likewise got four per cent 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 salaries for a routine 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 trip pay is contributed to her termination pay:

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The employer needs to likewise guarantee ongoing protection for any benefit or pension that applied to her for three weeks.

Example: No routine work week

Gerry has operated at an assisted living home for 4 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 percent holiday pay.

Gerry’s employer eliminated his position and did not give Gerry any written notification of termination. Gerry was ill and off work for 2 of the 12 weeks instantly preceding the day his employment was ended. Gerry earned $1,800.00 in the 12 weeks before the day on which his employment ended.

Gerry is entitled to four weeks of termination pay.

Gerry’s typical incomes weekly are computed:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for 2 weeks therefore these weeks are not included 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 vacation pay is included to his termination pay:

$ 720.00 + $43.20 = $763.20

Result: Gerry is entitled to $763.20. The company should also ensure continued coverage for any advantage or pension that applied to him for 4 weeks.

When to pay termination pay

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

Mass termination

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

Meaning of “establishment”

An “establishment” is an area at which the employer continues business. Separate locations can be considered one establishment if either:

– they are located within the same town, or

– a worker at one area has contractual seniority rights that encompass the other area, enabling the staff member to displace another employee (likewise called “bumping rights”).

Effective October 26, 2023, in cases of mass termination, the term “facility” consists of a staff member’s home, but only if the worker works from home and does not operate at any other place where the employer continues business.

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

Note that where a worker carries out work both from their home and from another location where the employer brings on company (for instance, a workplace), their home is not included in the definition of “facility”. Instead, the staff member is thought about to have a connection to the office location and, therefore, for the purpose of mass termination, the employee is included with respect to that office area.

Example: where several places are considered one “establishment”

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

For the purpose of mass termination, the business’s London workplace, London storage facility and Sabrina’s London home are considered one “facility.”

Employer commitments in a mass termination

When a mass termination occurs, the employer should 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.

– 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 verified.

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

Any notification to the impacted staff members is ruled out to have actually been provided till the Form 1 is received by the Director; simply put, notification of mass termination is ineffective up until 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 notice duration:

– publish a copy of the Form 1 supplied to the Director in the office where it will pertain to the attention of the affected staff members.

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

The amount of notice employees need to get in a mass termination is not based on the workers’ length of work, however on the variety of staff members who have actually been terminated. A company must give:

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

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

– 16 weeks observe if the employment of 500 or more employees is to be terminated

Exception to the mass termination guidelines

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

– the number of workers whose employment is being ended represents not more than 10 percent of the staff members who have actually been used for a minimum of 3 months at the facility

– none of the terminations are triggered by the irreversible discontinuance of all or part of the company’s company at the establishment

Mass termination: resignation by a staff member

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

Temporary work after termination date in notice

A company can offer work to a worker who has actually been notified of termination on a short-lived basis in the 13-week duration after the termination date set out in the notification without impacting the original date of the termination and without being needed to offer any additional notice of termination to the employee when the momentary work ends.

If a worker works beyond the 13-week duration after the termination date and then has their work ended, the staff member will be entitled to a new written notice of termination as if the previous notification had actually never ever been given. The worker’s duration of employment will then also consist of the duration of short-term work.

Recall rights

A “recall right” is the right of an employee on a layoff to be called back to work by their employer under a term or condition of employment. This right is frequently found in collective arrangements.

An employee who has recall rights and who is entitled to termination pay due to the fact that of a layoff of 35 weeks or more may select to:

– keep their recall rights and not be paid termination pay (or severance pay, if they were entitled to discontinuance wage) at that time;
or

– offer 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 elects to keep their recall rights or fails to choose, 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 a staff member who is represented by a trade union elects to keep their recall rights or stops working to decide, the employer and the trade union must try to come to a plan to hold the termination pay (and severance pay, if any) in trust for the worker. If they can not concern a plan, and the trade union advises the company and the Director of Employment Standards in composing that efforts have actually failed, the company must send the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.

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

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

Exemptions to notice of termination or termination pay

A number of these exemptions are intricate. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you require more details. Please also describe the unique guideline 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 disregard of task that is not trivial and has actually not been excused by the company. Note: “wilful” consists of when an employee intended the resulting consequence or acted recklessly if they understood or should have understood the impacts their conduct would have. Poor work conduct that is unintentional or unintentional is typically ruled out wilful;

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

– the term expires or the task is not completed more than 12 months after the employment began; or

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

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 workers may have rights under the common law that are greater than the rights to observe of termination (or termination pay) and severance pay under the ESA. A worker might want to sue their former company in court for “wrongful termination”. Employees should be mindful that they can not sue an employer for wrongful dismissal and sue for termination pay or discontinuance wage with the ministry for the same termination or severance of work. An needs to choose one or the other. Employees might wish to get legal suggestions worrying their rights.