
Talentsmine
Company Description
Termination Of Employment
A variety of expressions are typically utilized to explain scenarios when employment is ended. These include “let go,” “discharged,” “dismissed,” “fired” and “completely laid off.”
Under the Employment Standards Act, 2000 (ESA) a person’s work is ended if the company:
– dismisses or stops employing an employee, including where a worker is no longer employed due to the personal bankruptcy or insolvency of the employer;
– “constructively” dismisses an employee and the staff member resigns, in reaction, within an affordable time;
– lays an employee off for a duration that is longer than a “short-lived layoff”.
In the majority of cases, when a company ends the employment of an employee who has been continuously employed for 3 months, employment the employer needs to supply the staff member with either composed notification of termination, termination pay or a mix (as long as the notification and the variety of weeks of termination pay together equal the length of notification the employee is entitled to get).
The ESA does not require a company to give a staff member a factor why their employment is being terminated. There are, however, some situations where a company can not end an employee’s work even if the company is prepared to give proper composed notification or termination pay. For instance, an employer can not end someone’s employment, or penalize them in any other way, if any part of the factor for the termination of work is based upon the staff member asking questions about the ESA or working out a right under the ESA, such as refusing to work in excess of the day-to-day or weekly hours of work optimums, or employment taking a leave of lack specified in the ESA. Please see the chapter on reprisals.
Receiving termination notice or pay in lieu
Certain staff members are not entitled to notice of termination or termination pay under the ESA. Examples include: staff members who are guilty of wilful misbehavior, disobedience, or wilful disregard of task that is not trivial and has not been condoned by the employer. Other examples consist of building and construction workers, staff members on short-term layoff, workers who decline a deal of affordable alternative employment and staff members who have been used less than three months.
There are a number of other exemptions to the termination of work provisions of the ESA. See “Exemptions to see of termination or termination pay.” Please also refer to the unique guideline tool.
The termination-of-employment rules are entirely separate from any entitlements a worker might need to be paid severance pay under the ESA.
Constructive termination
A useful dismissal may happen when an employer makes a significant modification to an essential term or condition of a worker’s employment without the employee’s actual or implied consent.
For example, an employee may be constructively dismissed if the employer makes modifications to the employee’s terms and conditions of work that result in a considerable decrease in salary or a considerable negative change in such things as the staff member’s work location, hours of work, authority, or position. Constructive dismissal might likewise consist of circumstances where a company harasses or abuses an employee, or an employer offers a worker a demand to “give up or be fired” and the staff member resigns in response.
The employee would need to resign in action to the change within a sensible duration of time in order for the employer’s actions to be thought about a termination of work for functions of the ESA.
Constructive termination is a complex and hard subject. For more information on constructive termination, please call the Employment Standards Information Centre at 1-800-531-5551.
Temporary layoff
A staff member is on short-term layoff when a company cuts down or stops the employee’s work without ending their work (for example, laying someone off sometimes when there is inadequate work to do). The simple truth that the company does not specify a recall date when laying the worker off does not always imply that the lay-off is not temporary. Note, nevertheless, that a lay-off, even if intended to be temporary, may result in useful dismissal if it is not enabled by the employment agreement.
For the functions 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 generally earn (or makes typically) in a week.
A week of layoff does not include any week in which the worker did not work for one or more days due to the fact that the employee was not able or offered to work, went through disciplinary suspension, or was not supplied with work since of a strike or lockout at their place of work or elsewhere.
Employers are not needed under the ESA to supply staff members with a composed notice of a momentary layoff, nor do they need to offer a factor for employment the lay-off. (They may, however, be needed to do these things under a collective arrangement 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 successive weeks;
or
2. more than 13 weeks in any duration of 20 consecutive weeks, but less than 35 weeks of layoff in any period of 52 consecutive weeks, where:- the staff member continues to receive considerable payments from the company;
or
– the employer continues to pay for the benefit of the employee under a legitimate group or worker insurance coverage plan (such as a medical or drug insurance plan) or a genuine retirement or pension strategy;
or
– the employee gets extra joblessness benefits;
or
– the staff member would be entitled to receive extra unemployment benefits but isn’t getting them because they are utilized somewhere else;
or
– the employer remembers the employee to work within the time frame approved by the Director of Employment Standards;
or
– the employer recalls the employee within the time frame set out in an arrangement 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 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 company.
If an employee is laid off for a period longer than a temporary layoff as set out above, the employer is thought about to have ended the staff member’s work. Generally, the staff member will then be entitled to termination pay.
Written notice of termination and termination pay
Under the ESA, a company can end the work of a worker who has been used constantly for 3 months or more if either:
– the company has actually offered the worker correct written notification of termination and the notice period has actually expired
– the employer pays termination pay to the worker where no written notification or less notification than is required is offered
Written notification of termination
An employee is entitled to observe of termination (or termination pay instead of notice) if they have been constantly utilized for a minimum of three months. A person is thought about “employed” not only while they are actively working, however likewise throughout whenever in which they are not working but the employment 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 worker is entitled depends upon their “duration of employment”. An employee’s duration of work consists of not only all time while the worker is actively working however likewise any time that they are not working but the employment relationship still exists, with the following exceptions:
– if a lay-off goes on longer than a temporary lay-off, the worker’s employment is considered (or thought about) to have actually been terminated on the very first day of the lay-off-any time after that does not count as part of the worker’s duration of work, although the employee may still be utilized for purposes of the “continuously used for 3 months” credentials
– if two different periods of employment are separated by more than 13 weeks, just the most current duration counts for functions of notice of termination
It is possible, in some scenarios, for an individual to have actually been “continually utilized” 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 since an employee who has actually been continuously used for at least three months is entitled to discover, and the minimum notification privilege of one week uses 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 guidelines identify the amount of notice required when it comes to mass terminations – where the employment of 50 or more employees is terminated at a company’s establishment within a four-week period.
Requirements throughout the statutory notification period
During the statutory notification duration, a company needs to:
– not reduce the employee’s wage rate or modify any other term or condition of employment;
– continue to make whatever contributions would be required to keep the staff member’s advantages strategies; and
– pay the employee the salaries they are entitled to, which can not be less than the employee’s regular wages for a routine work week every week.
Regular rate
This is a worker’s rate of pay for each non-overtime hour of work in the staff member’s work week.
Regular salaries
These are earnings besides overtime pay, trip pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and discontinuance wage and certain legal privileges.
Regular work week
For a worker who generally works the same variety of hours each week, a regular work week is a week of that numerous hours, not including overtime hours.
Some employees do not have a regular work week. That is, they do not work the same number of hours each week or they are paid on a basis other than time. For these workers, the “regular wages” for a “routine work week” is the typical amount of the routine wages earned by the worker in the weeks in which the worker worked throughout the duration of 12 weeks instantly preceding the date the notification was offered.
An employer is not permitted to set up a worker’s vacation time during the statutory notice duration unless the employee-after getting written notification of termination of employment-agrees to take their trip time during the notification period.
If an employer offers longer notification than is needed, the statutory part of the notice period is the last part of the period that ends on the date of termination.
How to provide written notice
Most of the times, composed notification of termination of work should be dealt with to the worker. It can be supplied in individual or by mail, fax or email, as long as delivery can be confirmed.
There are special rules for offering notice of termination if a worker has an agreement of work or a collective arrangement that provides seniority rights that allow 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 needs to post a notification in the work environment (where it will be seen by the employees) setting out the names, seniority and task classification of those employees the company plans to end and the date of the proposed termination. The posting of the notification is considered to be notification of termination, as of the date of the publishing, to a staff member who is “bumped” by an employee named in the notice. However, this notification of termination must still satisfy the length requirements set out in the ESA.
There are likewise special guidelines regarding how notification is offered when there is a mass termination.
Termination pay
A staff member who does not get the composed notification needed under the ESA should be given termination pay in lieu of notification. Termination pay is a lump amount payment equivalent to the regular salaries for a regular work week that a worker would otherwise have actually been entitled to during the written notification duration. An employee makes vacation pay on their termination pay. Employers must also continue to make whatever contributions would be needed to keep the advantages the employee would have been entitled to had they continued to be utilized through the notice duration.
Example: Regular work week
Sarah has worked for 3 and a half years. Now her task has been removed and her work has been ended. Sarah was not offered any written notification of termination.
Sarah worked 40 hours a week weekly and was paid $20.00 an hour. She likewise got four per cent vacation pay. Because she worked for more than 3 years however less than four years, she is entitled to three weeks’ pay in lieu of notice.
Sarah’s regular earnings for a regular work week are determined:
$ 20.00 an hour X 40 hours a week = $800.00 a week
Her termination pay is calculated:
$ 800.00 X 3 weeks = $2,400.00
Then her holiday 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 also ensure continued coverage for any benefit or pension plans that applied to her for three weeks.
Example: No routine work week
Gerry has actually worked at a nursing home for 4 years. He works every week, however 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 company removed his position and did not provide Gerry any written notice of termination. Gerry was ill and off work for 2 of the 12 weeks right away preceding the day his work 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 revenues per week are calculated:
$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off sick for two weeks for that reason these weeks are not included in the computation of typical incomes) = $180.00 a week
His termination pay is determined:
$ 180.00 × 4 weeks = $720.00
Then his trip pay on his termination pay is computed:
6% of $720.00 = $43.20
Finally, his trip pay is added to his termination pay:
$ 720.00 + $43.20 = $763.20
Result: Gerry is entitled to $763.20. The company should likewise make sure ongoing coverage for any advantage or pension that applied to him for four weeks.
When to pay termination pay
Termination pay should be paid to an employee either seven days after the employee’s employment is ended or on the employee’s next routine pay date, whichever is later.
Mass termination
Special guidelines for notice of termination may apply in cases of mass termination (when an employer is ending 50 or more staff members at its establishment within a four-week duration).
Meaning of “facility”
An “establishment” is a place at which the employer continues company. Separate places can be thought about one establishment if either:
– they are located within the very same town, or
– a worker at one location has contractual seniority rights that extend to the other area, enabling the staff member to displace another worker (likewise called “bumping rights”).
Effective October 26, 2023, in cases of mass termination, the term “facility” includes a worker’s home, however only if the worker works from home and does not operate at any other location where the employer continues company.
This will need that workers who work exclusively remotely be considered for addition in the count when identifying whether 50 or more employees have actually been terminated.
Note that where a worker performs work both from their home and from another place where the employer brings on service (for instance, an office), their home is not included in the meaning of “establishment”. Instead, the staff member is thought about to have a connection to the office area and, therefore, for the purpose of mass termination, the employee is included with respect to that office location.
Example: where numerous locations are considered one “establishment”
ABC Company has an office and a storage facility located 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 operate at the workplace.
For the purpose of mass termination, the company’s London office, London warehouse and Sabrina’s London home are thought about one “facility.”
Employer responsibilities in a mass termination
When a mass termination takes place, the company needs to 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 shipment to the Director’s workplace on a day and at a time when it is open.
– mail shipment to the Director’s office, if the shipment can be validated.
The office of the Director of Employment Standards is found on the 9th flooring, 400 University Avenue, Toronto ON M7A 1T7.
Any notification to the impacted employees is not thought about to have actually been given till the Form 1 is gotten by the Director; in other words, notification of mass termination is not reliable up until the Director gets the Form 1.
In addition to providing workers with specific notices of termination, the employer must, on the first day of the notice period:
– post a copy of the Form 1 offered to the Director in the work environment where it will come to the attention of the affected employees.
– offer a copy of the Form 1 to each impacted employee.
The quantity of notice staff members should get in a mass termination is not based on the employees’ length of employment, however on the variety of staff members who have actually been ended. An employer needs to provide:
– 8 weeks observe if the work of 50 to 199 employees is to be terminated
– 12 weeks see if the employment of 200 to 499 workers is to be ended
– 16 weeks see if the employment of 500 or more workers is to be ended
Exception to the mass termination rules
The mass termination guidelines do not apply if these 2 things use:
– the variety of employees whose employment is being ended represents not more than 10 percent of the staff members who have actually been used for a minimum of three months at the establishment
– none of the terminations are triggered by the irreversible discontinuance of all or part of the company’s organization at the establishment
Mass termination: resignation by a staff member
A staff member who has actually received termination notification under the mass termination rules who wants to resign before the termination date provided in the employer’s notification need to provide the company a minimum of one week’s composed notification of resignation if the staff member has been employed for less than 2 years. If the employment period has been two years or more, the worker should offer a minimum of 2 weeks’ written notice of resignation. However, the worker does not need to notify of resignation if the company constructively dismisses the employee or breaches a term of the contract.
Temporary work after termination date in notice
A company can supply work to a staff member who has actually been notified of termination on a short-lived basis in the 13-week period after the termination date set out in the notification without impacting the initial date of the termination and without being required to offer any more notice of termination to the worker when the temporary work ends.
If a worker works beyond the 13-week period after the termination date and then has their employment ended, the worker will be entitled to a new composed notice of termination as if the previous had never been given. The staff member’s duration of work will then also consist of the duration of short-lived 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 contracts.
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 severance pay, if they were entitled to severance pay) at that time;
or
– give up their recall rights and receive termination pay (and discontinuance wage, if they were entitled to discontinuance wage).
If a worker is entitled to both termination pay and severance pay, they must make the same choice for both.
If an employee who is not represented by a trade union elects to keep their recall rights or stops working to make a choice, the company must send 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 chooses to keep their recall rights or fails to choose, 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 employee. 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 stopped working, 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 chooses to quit their recall rights or if the recall rights expire, the cash that is held in trust must be sent out to the employee.
If the worker accepts a recall back to work, the cash that is kept in trust will be returned to the employer.
Exemptions to discover of termination or termination pay
Many 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 likewise refer to the special rule tool.
The notification 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 disregard of duty that is not trivial and has not been excused by the employer. Note: “wilful” includes when a worker intended the resulting repercussion or acted recklessly if they understood or ought to have known the results their conduct would have. Poor work conduct that is unintentional or unintended is usually not thought about wilful;
– was worked with for a particular length of time or till the completion of a particular task. However, such an employee will be entitled to notice of termination or termination pay if:- the work ends before the term ends or the task is finished; or
– the term expires or the job is not finished more than 12 months after the work started; or
– the employment continues for 3 months or more after the term expires or the task is completed;
See also: Employment Standards Self-Service Tool
Wrongful termination
Rights greater than ESA notification of termination, termination pay, discontinuance wage
The rules under the ESA about termination and severance of employment are minimum requirements. Some staff members might have rights under the typical law that are greater than the rights to see 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 should know 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 very same termination or severance of work. A worker should select one or the other. Employees may want to acquire legal suggestions worrying their rights.