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Employer Description

Termination Of Employment

A variety of expressions are typically utilized to describe situations when employment is ended. These include « let go, » « released, » « dismissed, » « fired » and « permanently laid off. »

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

– dismisses or stops employing a staff member, including where a staff member is no longer used due to the personal bankruptcy or insolvency of the employer;

– « constructively » dismisses an employee and the worker resigns, in action, within a sensible time;

– lays a worker off for a period that is longer than a « short-term layoff ».

For the most part, when a company ends the work of a worker who has actually been continually utilized for three months, the employer must provide the employee with either written notice of termination, termination pay or a combination (as long as the notice and the variety of weeks of termination pay together equal the length of notification the employee is entitled to receive).

The ESA does not require an employer to give a worker a reason that their work is being ended. There are, however, some scenarios where an employer can not end a staff member’s employment even if the company is prepared to provide correct composed notice or termination pay. For example, an employer can not end somebody’s work, or penalize them in any other way, if any part of the factor for the termination of work is based on the staff member asking concerns about the ESA or exercising a right under the ESA, such as declining to work in excess of the daily or weekly hours of work maximums, or taking a leave of lack specified in the ESA. Please see the chapter on reprisals.

Receiving termination notification or pay in lieu

Certain workers are not entitled to notice of termination or termination pay under the ESA. Examples consist of: workers who are guilty of wilful misconduct, disobedience, or wilful overlook of responsibility that is not trivial and has actually not been excused by the company. Other examples consist of building staff members, staff members on temporary layoff, employees who refuse a deal of affordable alternative employment and employees who have actually been employed less than three months.

There are a number of other exemptions to the termination of work arrangements of the ESA. See « Exemptions to observe of termination or termination pay. » Please likewise refer to the special rule tool.

The termination-of-employment rules are entirely separate from any privileges an employee may have to be paid severance pay under the ESA.

Constructive dismissal

A positive termination may happen when an employer makes a substantial change to a fundamental term or condition of an employee’s employment without the staff member’s actual or implied permission.

For instance, an employee may be constructively dismissed if the company makes modifications to the worker’s terms and conditions of employment that lead to a substantial reduction in salary or a considerable unfavorable change in such things as the staff member’s work location, hours of work, authority, or position. Constructive termination might also consist of situations where a company pesters or abuses an employee, or a company gives a worker a demand to « give up or be fired » and the staff member resigns in reaction.

The employee would need to resign in action to the change within a sensible period of time in order for the company’s actions to be considered a termination of work for functions of the ESA.

Constructive dismissal is a complex and tough subject. To find out more on positive dismissal, please call the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

A worker is on momentary layoff when a company cuts down or stops the worker’s work without ending their work (for example, laying somebody off at times when there is not adequate work to do). The simple truth that the company does not specify a recall date when laying the staff member off does not always imply that the lay-off is not short-lived. Note, nevertheless, that a lay-off, even if planned to be momentary, might lead to useful termination if it is not enabled by the work contract.

For the purposes of the termination provisions of the ESA, a « week of layoff » is a week in which the staff member made less than half of what they would ordinarily make (or makes usually) in a week.

A week of layoff does not include any week in which the staff member did not work for several days because the employee was unable or readily available to work, underwent disciplinary suspension, or was not provided with work because of a strike or lockout at their place of employment or in other places.

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

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

1. not more than 13 weeks of layoff in any duration of 20 successive weeks;
or

2. more than 13 weeks in any period of 20 consecutive weeks, but less than 35 weeks of layoff in any duration of 52 successive weeks, where:- the worker continues to get significant payments from the employer;
or

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

– the employee gets additional unemployment advantages;
or

– the staff member would be entitled to receive additional welfare but isn’t receiving them due to the fact that they are utilized elsewhere;
or

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

– the company remembers the employee within the time frame set out in an agreement with an employee who is not represented by a trade union;
or

3. a layoff longer than a layoff described in ‘B’ where the company remembers a worker who is represented by a trade union within the time set out in an agreement between the union and the company.

If an employee is laid off for a period longer than a momentary layoff as set out above, the employer is considered to have actually terminated the worker’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 terminate the employment of a staff member who has actually been used continuously for 3 months or more if either:

– the company has actually offered the employee correct composed notification of termination and the notification duration has ended

– the company pays termination pay to the staff member where no composed notice or less notification than is needed is given

Written notice of termination

A staff member is entitled to see of termination (or termination pay instead of notification) if they have been continually employed for at least 3 months. A person is thought about « used » not just while they are actively working, however also during whenever in which they are not working however the employment relationship still exists (for example, time in which the employee is off ill or on leave or on lay-off).

The quantity of notification to which an employee is entitled depends upon their « duration of work ». An employee’s duration of work includes not only all time while the worker is actively working but also whenever that they are not working but the employment relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a short-lived lay-off, the worker’s work is considered (or thought about) to have actually been ended on the very first day of the lay-off-any time after that does not count as part of the employee’s duration of employment, although the worker might still be employed for purposes of the « constantly used for 3 months » certification

– if 2 different periods of employment are separated by more than 13 weeks, only the most current duration counts for functions of notice of termination

It is possible, in some situations, for an individual to have been « continually employed » for three months or more and yet have a duration of employment of less than 3 months. In such scenarios, job the worker would be entitled to notice since an employee who has been continually utilized for a minimum of three months is entitled to observe, job and the minimum notification privilege of one week applies to a staff member with a period of work of any length less than one year.

The following chart defines the amount of notice required:

Note: Special guidelines figure out the quantity of notification required when it comes to mass terminations – where the employment of 50 or more staff members is terminated at an employer’s facility within a four-week duration.

Requirements during the statutory notice duration

During the statutory notification period, a company should:

– not minimize the worker’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 benefits plans; and

– pay the worker the wages they are entitled to, which can not be less than the staff member’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 work in the staff member’s work week.

Regular wages

These are wages aside from overtime pay, holiday pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and severance pay and particular legal entitlements.

Regular work week

For a staff member who normally works the very same number of hours weekly, a routine work week is a week of that lots of hours, not including overtime hours.

Some staff members do not have a routine work week. That is, they do not work the same variety of hours each week or they are paid on a basis other than time. For these employees, the « regular salaries » for a « routine work week » is the typical quantity of the regular salaries earned by the worker in the weeks in which the staff member worked throughout the duration of 12 weeks right away preceding the date the notice was provided.

A company is not enabled to schedule an employee’s trip time during the statutory notice duration unless the employee-after getting composed notification of termination of employment-agrees to take their getaway time during the notice duration.

If an employer offers longer notification than is required, the statutory part of the notification period is the last part of the duration that ends on the date of termination.

How to supply written notice

Most of the times, composed notice of termination of work must be resolved to the staff member. It can be offered face to face or by mail, fax or email, as long as delivery can be verified.

There are special rules for providing notice of termination if a worker has an agreement of employment or a cumulative contract that supplies seniority rights that enable an employee who is to be laid off or whose work is to be terminated to displace ( » bump ») other employees.

Because case, the company needs to post a notice in the workplace (where it will be seen by the staff members) setting out the names, seniority and task category of those staff members the employer means to terminate and the date of the proposed termination. The posting of the notice is considered to be notice of termination, since the date of the posting, to a worker who is « bumped » by a staff member named in the notification. However, this notification of termination should still fulfill the length requirements set out in the ESA.

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

Termination pay

A staff member who does not get the composed notice required under the ESA needs to be provided termination pay in lieu of notification. Termination pay is a lump amount payment equal to the regular earnings for a routine work week that a staff member would otherwise have been entitled to during the composed notification period. A worker earns holiday pay on their termination pay. Employers should also continue to make whatever contributions would be required to preserve the advantages the staff member would have been entitled to had they continued to be employed through the notification duration.

Example: Regular work week

Sarah has actually worked for three and a half years. Now her task has been gotten rid of and her employment has been ended. Sarah was not offered any composed notification of termination.

Sarah worked 40 hours a week every week and was paid $20.00 an hour. She likewise got 4 per cent holiday pay. Because she worked for more than three years however less than four years, she is entitled to 3 weeks’ pay in lieu of notification.

Sarah’s regular earnings for a routine work week are calculated:

$ 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 calculated:

4% of $2,400.00 = $96.00

Finally, her holiday pay is added to her termination pay:

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The employer should also make sure ongoing protection for any benefit or pension that used to her for three weeks.

Example: No routine work week

Gerry has actually operated at a nursing 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 vacation pay.

Gerry’s company eliminated his position and did not provide Gerry any written notice of termination. Gerry was ill and off work for two of the 12 weeks instantly 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 4 weeks of termination pay.

Gerry’s average earnings weekly are determined:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off sick for two weeks therefore these weeks are not included in the calculation of average profits) = $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 make sure ongoing protection for any benefit or pension that applied to him for four weeks.

When to pay termination pay

Termination pay must be paid to a worker either 7 days after the worker’s work is ended or on the employee’s next routine pay date, whichever is later.

Mass termination

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

Meaning of « establishment »

An « establishment » is a place at which the company continues company. Separate locations can be considered one establishment if either:

– they are located within the same town, job or

– an employee at one location has legal seniority rights that encompass the other location, permitting the worker to displace another employee (also called « bumping rights »).

Effective October 26, 2023, in cases of mass termination, the term « facility » includes a staff member’s home, however just if the staff member works from home and does not work at any other place where the employer brings on organization.

This will require that employees who work exclusively from another location be thought about for addition in the count when determining whether 50 or more employees have been terminated.

Note that where a staff member performs work both from their home and from another area where the company carries on service (for example, an office), their home is not consisted of in the meaning of « facility ». Instead, the staff member is thought about to have a connection to the office area and, for that reason, for the purpose of mass termination, the worker is consisted of with respect to that office place.

Example: where several locations are considered one « facility »

ABC Company has a workplace and a storage facility located in London, ON. Sabrina resides in London and works for ABC Company specifically from another location: she performs work for the company from home and does not operate at the office.

For the purpose of mass termination, the company’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 company must finish and deliver the Form 1 (Notice of termination of employment) to the Director of Employment Standards (Director) by:

– email to esa_form1_notice@ontario.ca.

– fax to (416) 326-7061.

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

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

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 not thought about to have actually 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 offering employees with private notifications of termination, the company must, on the first day of the notice period:

– publish a copy of the Form 1 provided to the Director in the office where it will come to the attention of the impacted staff members.

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

The quantity of notice employees need to receive in a mass termination is not based on the employees’ length of employment, however on the number of staff members who have actually been ended. An employer should provide:

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

– 12 weeks notice if the employment of 200 to 499 workers is to be ended

– 16 weeks see if the work of 500 or more workers is to be terminated

Exception to the mass termination guidelines

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

– the number of staff members whose employment is being terminated represents not more than 10 per cent of the staff members who have been utilized for at least 3 months at the facility

– none of the terminations are brought on by the irreversible discontinuance of all or part of the company’s business at the facility

Mass termination: resignation by a staff member

A staff member who has actually gotten termination notification under the mass termination guidelines who wishes to resign before the termination date supplied in the employer’s notification should offer the company at least one week’s composed notice of resignation if the staff member has been used for less than 2 years. If the work duration has been two years or more, the staff member needs to give a minimum of 2 weeks’ written notification of resignation. However, the worker does not have 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

A company can offer work to an employee who has been given notice of termination on a momentary basis in the 13-week duration after the termination date set out in the notice without impacting the initial date of the termination and without being required to supply any more notice of termination to the employee when the short-term work ends.

If a staff member works beyond the 13-week duration after the termination date and then has their employment terminated, the staff member will be entitled to a brand-new composed notification of termination as if the previous notification had never been offered. The employee’s period of employment will then likewise include the period 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 company under a term or condition of work. This right is frequently found in collective contracts.

An employee who has recall rights and who is entitled to termination pay since 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 receive termination pay (and discontinuance wage, if they were entitled to severance pay).

If an employee is entitled to both termination pay and severance pay, they should make the same choice for both.

If a staff member who is not represented by a trade union chooses to keep their recall rights or fails to make an option, the company needs to send the quantity of the termination pay (and discontinuance wage, 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 elects to keep their recall rights or stops working to make an option, the company and the trade union need to attempt to come to an arrangement to hold the termination pay (and discontinuance wage, if any) in trust for the worker. If they can not concern a plan, and the trade union advises 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 chooses to give up their recall rights or if the recall rights end, the cash that is kept in trust must be sent to the worker.

If the staff member accepts a recall back to work, the cash that is kept 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 contact the Employment Standards Information Centre, 1-800-531-5551, if you require more information. Please also refer to the unique rule tool.

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

– is guilty of wilful misbehavior, disobedience or wilful overlook of duty that is not insignificant and has actually not been condoned by the company. Note: « wilful » includes when a worker meant the resulting consequence or acted recklessly if they knew or ought to have known the results their conduct would have. Poor work conduct that is unexpected or unintentional is usually not thought about wilful;

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

– the term expires or the job is not finished more than 12 months after the employment started; or

– the employment continues for 3 months or more after the term expires or the job is finished;

See also: Employment Standards Self-Service Tool

Wrongful termination

Rights greater than ESA notice 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 higher than the rights to discover of termination (or termination pay) and severance pay under the ESA. A staff member may desire to sue their former company in court for « wrongful dismissal ». Employees should be mindful that they can not sue a company for wrongful termination and submit a claim for termination pay or severance pay with the ministry for the exact same termination or severance of work. A staff member must pick one or the other. Employees might wish to get legal suggestions concerning their rights.

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