Termination Of Employment
A variety of expressions are typically used to describe situations when work is terminated. These include "release," "discharged," "dismissed," "fired" and "completely laid off."
Under the Employment Standards Act, 2000 (ESA) an individual's employment is ended if the employer:
- dismisses or stops using a worker, consisting of where a staff member is no longer used due to the insolvency or insolvency of the employer;
- "constructively" dismisses a worker and the staff member resigns, in action, within a reasonable time;
- lays a worker off for a duration that is longer than a "short-term layoff".
For the most part, when an employer ends the work of a staff member who has been continuously used for three months, the company must supply 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 receive).
The ESA does not require a company to offer a worker a reason why their work is being ended. There are, nevertheless, some situations where a company can not end an employee's work even if the employer is prepared to offer correct composed notification or termination pay. For example, an employer can not end someone's employment, or penalize them in any other method, if any part of the reason for the termination of employment is based on the employee asking questions about the ESA or working out 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 absence specified in the ESA. Please see the chapter on reprisals.
Receiving termination notice or pay in lieu
Certain employees are not entitled to see of termination or termination pay under the ESA. Examples consist of: workers who are guilty of wilful misbehavior, disobedience, or wilful disregard of duty that is not minor and has not been condoned by the employer. Other examples consist of building and construction workers, workers on short-lived layoff, staff members who refuse an offer of sensible alternative work and employees who have actually been employed less than three months.
There are a variety of other exemptions to the termination of work provisions of the ESA. See "Exemptions to see of termination or termination pay." Please likewise refer to the special guideline tool.
The termination-of-employment guidelines are completely different from any privileges an employee may have to be paid severance pay under the ESA.
Constructive dismissal
A positive dismissal may happen when an employer makes a substantial modification to an essential term or condition of an employee's employment without the staff member's actual or implied consent.
For example, a staff member might be constructively dismissed if the employer makes changes to the staff member's conditions of employment that result in a considerable reduction in salary or a substantial unfavorable change in such things as the staff member's work area, hours of work, authority, or position. Constructive dismissal may likewise include circumstances where an employer bothers or abuses an employee, or a company provides an employee a final notice to "stop or be fired" and the employee resigns in reaction.
The worker would need to resign in reaction to the change within a reasonable period of time in order for the company's actions to be thought about a termination of employment for purposes of the ESA.
Constructive termination is a complex and challenging subject. To learn more on positive dismissal, please contact the Employment Standards Information Centre at 1-800-531-5551.
Temporary layoff
A staff member is on momentary layoff when a company cuts back or stops the staff member's work without ending their employment (for instance, laying someone off sometimes when there is insufficient work to do). The mere reality that the company does not define a recall date when laying the staff member off does not always suggest that the lay-off is not momentary. Note, nevertheless, employment that a lay-off, even if intended to be momentary, may lead to useful dismissal if it is not permitted by the employment agreement.
For the functions of the termination provisions of the ESA, a "week of layoff" is a week in which the employee made less than half of what they would ordinarily make (or makes typically) in a week.
A week of layoff does not include any week in which the staff member did not work for one or more days due to the fact that the worker was not able or available to work, underwent disciplinary suspension, or was not offered with work due to the fact that of a strike or lockout at their location of employment or somewhere else.
Employers are not required under the ESA to offer workers with a composed notification of a short-term 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 a work agreement.)
Under the ESA, a "short-lived 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 consecutive weeks, however less than 35 weeks of layoff in any period of 52 successive weeks, where:- the worker continues to receive substantial payments from the company;
or
- the employer continues to pay for the advantage of the staff member under a legitimate group or employee insurance coverage plan (such as a medical or drug insurance strategy) or a genuine retirement or pension;
or
- the employee gets supplementary joblessness benefits;
or
- the employee would be entitled to get extra joblessness benefits but isn't getting them since they are employed in other places;
or
- the company recalls the worker to work within the time frame authorized by the Director of Employment Standards;
or
- the company 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 explained in 'B' where the company remembers an employee who is represented by a trade union within the time set out in an agreement in between the union and the company.
If a staff member is laid off for a period longer than a short-term layoff as set out above, the company is considered to have actually terminated the employee's employment. Generally, the worker will then be entitled to termination pay.
Written notice of termination and termination pay
Under the ESA, a company can end the employment of a worker who has actually been utilized continuously for three months or more if either:
- the company has offered the employee proper composed notice of termination and the notification duration has actually expired
- the employer pays termination pay to the staff member where no written notice or less notice than is required is provided
Written notification of termination
A worker is entitled to see of termination (or termination pay rather of notification) if they have actually been continually used for at least 3 months. An individual is thought about "used" not only while they are actively working, but also during whenever in which they are not working however the employment relationship still exists (for example, time in which the worker is off ill or on leave or on lay-off).
The amount of notice to which a worker is entitled depends upon their "period of work". An employee's duration of employment consists of not only perpetuity while the worker is actively working however likewise any time that they are not working but the work relationship still exists, with the following exceptions:
- if a lay-off goes on longer than a short-term lay-off, the worker's work is considered (or thought about) to have been terminated on the first day of the lay-off-any time after that does not count as part of the employee's duration of employment, although the staff member might still be employed for functions of the "constantly utilized for three months" credentials
- if two separate durations of employment are separated by more than 13 weeks, only the most recent duration counts for purposes of notification of termination
It is possible, in some circumstances, for a person to have actually been "continuously used" for three months or more and yet have a period of employment of less than three months. In such circumstances, the worker would be entitled to discover since a worker who has been constantly employed for a minimum of 3 months is entitled to observe, and the minimum notice privilege of one week applies to a worker with a duration of employment of any length less than one year.
The following chart defines the quantity of notice needed:
Note: Special guidelines determine the amount of notice required when it comes to mass terminations - where the work of 50 or more workers is ended at a company's establishment within a four-week duration.
Requirements during the statutory notification period
During the statutory notice duration, an employer should:
- not lower the employee's wage rate or change any other term or condition of employment;
- continue to make whatever contributions would be needed to preserve the employee's advantages strategies; and
- pay the employee the salaries they are entitled to, which can not be less than the staff member's regular incomes for a routine work week each week.
Regular rate
This is a staff member's rate of spend for each non-overtime hour of work in the employee's work week.
Regular wages
These are incomes besides overtime pay, getaway pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and severance pay and particular contractual privileges.
Regular work week
For a worker who generally works the very same variety of hours weekly, a regular work week is a week of that many hours, not including overtime hours.
Some staff members do not have a routine work week. That is, they do not work the very same number of hours each week or they are paid on a basis other than time. For these employees, the "routine earnings" for a "regular work week" is the average amount of the routine salaries made by the staff member in the weeks in which the worker worked throughout the period of 12 weeks instantly preceding the date the notification was given.
An employer is not allowed to schedule a staff member's getaway time during the statutory notice duration unless the employee-after receiving written notification of termination of employment-agrees to take their getaway time during the notification period.
If an employer provides longer notification than is needed, the statutory part of the notice duration is the tail end of the period that ends on the date of termination.
How to offer written notice
For the most part, composed notice of termination of employment must be dealt with to the employee. It can be offered personally or by mail, fax or e-mail, as long as delivery can be confirmed.
There are special rules for providing notification of termination if a staff member has an agreement of employment or a cumulative agreement that supplies seniority rights that enable a worker who is to be laid off or whose work is to be terminated to displace (" bump") other employees.
In that case, the company must publish a notification in the work environment (where it will be seen by the staff members) setting out the names, seniority and task category of those employees 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, as of the date of the posting, to an employee who is "bumped" by a worker called in the notice. However, this notification of termination need to still meet the length requirements set out in the ESA.
There are likewise special guidelines regarding how notification is supplied when there is a mass termination.
Termination pay
A staff member who does not get the written notification needed under the ESA must be given termination pay in lieu of notification. Termination pay is a lump amount payment equivalent to the regular incomes for a routine work week that a staff member would otherwise have been entitled to during the written notice duration. A worker makes vacation pay on their termination pay. Employers need to likewise continue to make whatever contributions would be needed to preserve the benefits 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 job has actually been gotten rid of and her employment has actually been ended. Sarah was not given any written notice of termination.
Sarah worked 40 hours a week every week and was paid $20.00 an hour. She likewise received four per cent vacation 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 regular earnings for a routine 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 holiday pay on her termination pay is determined:
4% of $2,400.00 = $96.00
Finally, her getaway pay is added 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 ongoing protection for any advantage or pension plans that applied to her for 3 weeks.
Example: No routine work week
Gerry has actually operated at a retirement home for four years. He works each week, however 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 employer removed his position and did not give Gerry any composed notice of termination. Gerry was ill and off work for 2 of the 12 weeks instantly preceding the day his work was terminated. Gerry earned $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 revenues per week are determined:
$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for two weeks therefore these weeks are not included in the computation of typical earnings) = $180.00 a week
His termination pay is determined:
$ 180.00 × 4 weeks = $720.00
Then his holiday pay on his termination pay is determined:
6% of $720.00 = $43.20
Finally, his trip pay is contributed to his termination pay:
$ 720.00 + $43.20 = $763.20
Result: Gerry is entitled to $763.20. The employer needs to likewise ensure ongoing coverage for any advantage or pension plans that applied to him for 4 weeks.
When to pay termination pay
Termination pay need to be paid to a worker either 7 days after the employee's employment is terminated or on the employee'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 ending 50 or more workers at its establishment within a four-week period).
Meaning of "establishment"
An "establishment" is a location at which the company continues company. Separate places can be considered one facility if either:
- they are situated within the same town, or
- an employee at one area has contractual seniority rights that encompass the other location, permitting the employee to displace another worker (also called "bumping rights").
Effective October 26, 2023, in cases of mass termination, the term "facility" includes an employee's home, however just if the staff member works from home and does not work at any other place where the company continues organization.
This will require that employees who work specifically remotely be thought about for addition in the count when identifying whether 50 or more workers have been terminated.
Note that where a worker performs work both from their home and from another area where the company continues company (for employment instance, an office), their home is not consisted of in the definition of "establishment". Instead, the worker is thought about to have a connection to the workplace place and, for that reason, for the purpose of mass termination, the employee is consisted of with regard to that office area.
Example: where multiple areas are considered one "facility"
ABC Company has a workplace and a warehouse situated in London, ON. Sabrina resides in London and works for ABC Company solely remotely: she performs work for the company from home and does not operate at the workplace.
For the function of mass termination, the company's London office, London warehouse and Sabrina's London home are considered one "facility."
Employer commitments in a mass termination
When a mass termination happens, the company needs to complete and deliver the Form 1 (Notice of termination of employment) to the Director of Employment Standards (Director) by:
- email to [email protected].
- fax to (416) 326-7061.
- individual 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 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 affected workers is not thought about to have been offered till the Form 1 is received by the Director; simply put, notification of mass termination is ineffective till the Director receives the Form 1.
In addition to supplying staff members with individual notifications of termination, the employer must, on the very first day of the notice duration:
- post a copy of the Form 1 offered to the Director in the office where it will pertain to the attention of the affected staff members.
- provide a copy of the Form 1 to each impacted employee.
The amount of notice staff members should get in a mass termination is not based on the workers' length of work, but on the variety of employees who have actually been terminated. A company must give:
- 8 weeks discover if the work of 50 to 199 workers is to be terminated
- 12 weeks observe if the work of 200 to 499 employees is to be terminated
- 16 weeks discover if the work of 500 or more workers is to be terminated
Exception to the mass termination guidelines
The mass termination guidelines do not apply if these 2 things apply:
- the variety of employees whose employment is being ended represents not more than 10 per cent of the employees who have actually been employed for a minimum of three months at the facility
- none of the terminations are triggered by the irreversible discontinuance of all or part of the company's business at the facility
Mass termination: resignation by an employee
A worker who has received termination notification under the mass termination guidelines who desires to resign before the termination date offered in the employer's notification should offer the employer at least one week's written notice of resignation if the employee has actually been employed for less than 2 years. If the work duration has been two years or more, the employee should give a minimum of 2 weeks' composed notice of resignation. However, the employee does not need to notify of resignation if the company constructively dismisses the employee or breaches a regard to the agreement.
Temporary work after termination date in notice
An employer can offer work to a staff member who has been given notification of termination on a momentary basis in the 13-week duration after the termination date set out in the notice without affecting the original date of the termination and employment without being to offer any additional notification of termination to the worker when the short-term work ends.
If a staff member 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 notice of termination as if the previous notice had never been provided. The employee's duration of employment will then also include the duration of short-lived work.
Recall rights
A "recall right" is the right of a worker on a layoff to be recalled to work by their employer under a term or condition of work. This right is commonly discovered in cumulative 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 severance pay) at that time;
or
- give up their recall rights and get termination pay (and discontinuance wage, if they were entitled to severance pay).
If a worker is entitled to both termination pay and severance pay, they need to make the exact same choice for both.
If an employee who is not represented by a trade union chooses to keep their recall rights or stops working to make a choice, the employer must send out the quantity of the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.
If a staff member who is represented by a trade union chooses to keep their recall rights or fails to decide, the company and the trade union should attempt to come to an arrangement to hold the termination pay (and severance pay, if any) in trust for the employee. If they can not concern an arrangement, and the trade union recommends the employer and the Director of Employment Standards in writing that efforts have actually failed, the employer must send the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.
If a worker picks to offer up their recall rights or if the recall rights end, the cash that is kept in trust needs to be sent out to the worker.
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 discover of termination or termination pay
A number of these exemptions are complex. Please call the Employment Standards Information Centre, 1-800-531-5551, if you require more details. Please likewise describe the special 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 neglect of duty that is not unimportant and has actually not been excused by the company. Note: "wilful" includes when an employee meant the resulting consequence or acted recklessly if they knew or must have known the results their conduct would have. Poor work conduct that is unexpected or unintentional is usually not considered wilful;
- was employed for a particular length of time or until the conclusion of a specific job. However, such a worker will be entitled to notice of termination or termination pay if:- the work ends before the term expires or the job is completed; or
- the term expires or the task is not finished more than 12 months after the employment started; or
- the employment continues for three months or more after the term ends or the task is completed;
See likewise: Employment Standards Self-Service Tool
Wrongful termination
Rights greater than ESA notice of termination, termination pay, severance pay
The guidelines 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 discover of termination (or termination pay) and discontinuance wage under the ESA. An employee might wish to sue their previous company in court for "wrongful dismissal". Employees should be mindful that they can not sue a company for wrongful dismissal and sue for termination pay or severance pay with the ministry for the very same termination or severance of work. A staff member should choose one or the other. Employees may want to get legal advice concerning their rights.
