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Termination Of Employment

A variety of expressions are commonly used to explain situations when employment is terminated. These include “let go,” “discharged,” “dismissed,” “fired” and “completely laid off.”

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

– dismisses or stops using a staff member, consisting of where an employee is no longer used due to the personal bankruptcy or insolvency of the employer;

– “constructively” dismisses a worker and the staff member resigns, in action, within a sensible time;

– lays a worker off for a duration that is longer than a “short-term layoff”.

In many cases, when a company ends the work of an employee who has been constantly utilized for three months, the employer must offer the worker with either composed notification of termination, termination pay or a combination (as long as the notice and the number of weeks of termination pay together equal the length of notice the employee is entitled to receive).

The ESA does not require an employer to provide a staff member a reason that their employment is being terminated. There are, nevertheless, some situations where an employer can not end an employee’s employment even if the company is prepared to offer appropriate written notice or termination pay. For instance, an employer can not end somebody’s employment, or 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 everyday or weekly hours of work optimums, or taking a leave of lack specified in the ESA. Please see the chapter on reprisals.

Qualifying for termination notification or pay in lieu

Certain employees are not entitled to notice of termination or termination pay under the ESA. Examples include: workers who are guilty of wilful misconduct, disobedience, or wilful overlook of responsibility that is not unimportant and has not been condoned by the employer. Other examples include construction staff members, workers on short-term layoff, workers who refuse an offer of affordable alternative work and staff members who have actually been utilized less than 3 months.

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

The termination-of-employment rules are totally separate from any entitlements a staff member might have to be paid severance pay under the ESA.

Constructive termination

A positive dismissal may occur when a company makes a significant modification to an essential term or condition of an employee’s employment without the worker’s real or implied consent.

For example, a worker may be constructively dismissed if the employer makes modifications to the staff member’s terms of work that lead to a significant decrease in wage or a significant negative change in such things as the staff member’s work location, hours of work, authority, or position. Constructive dismissal may likewise consist of scenarios where a company bugs or abuses a staff member, or an employer gives an employee an ultimatum to “quit or be fired” and the staff member resigns in response.

The employee would have to resign in response to the change within a reasonable 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 challenging topic. For additional information on positive dismissal, please get in touch with the Employment Standards Information Centre at 1-800-531-5551.

Temporary layoff

An employee is on momentary layoff when a company cuts down or stops the employee’s work without ending their work (for example, laying somebody off sometimes when there is inadequate work to do). The simple fact that the company does not specify a recall date when laying the worker off does not always mean that the lay-off is not temporary. Note, however, that a lay-off, even if planned to be temporary, may lead to constructive termination if it is not enabled by the work contract.

For the functions of the termination arrangements of the ESA, a “week of layoff” is a week in which the worker earned less than half of what they would normally earn (or earns typically) in a week.

A week of layoff does not consist of any week in which the staff member did not work for several days due to the fact that the employee was not able or available to work, went through disciplinary suspension, or was not offered with work since of a strike or lockout at their location of work or elsewhere.

Employers are not required under the ESA to supply workers with a written notification of a short-term layoff, nor do they have to offer a reason for the lay-off. (They may, nevertheless, be required to do these things under a cumulative contract or an employment agreement.)

Under the ESA, a “temporary 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 period of 20 successive weeks, but less than 35 weeks of layoff in any period of 52 successive weeks, employment where:- the employee continues to receive significant payments from the company;
or

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

– the employee receives supplementary welfare;
or

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

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

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

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

If a worker is laid off for a period longer than a short-lived layoff as set out above, the employer is thought about to have actually ended the worker’s employment. 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 a worker who has been utilized continually for three months or more if either:

– the company has actually provided the worker correct composed notice of termination and the notice period has actually expired

– the company pays termination pay to the employee where no composed notification or less notification than is required is given

Written notification of termination

An employee is entitled to observe of termination (or termination pay instead of notification) if they have actually been continuously used for at least three months. An individual is thought about “utilized” not just while they are actively working, however also throughout at any time in which they are not working but the employment relationship still exists (for instance, time in which the staff member is off sick or on leave or on lay-off).

The amount of notification to which an employee is entitled depends upon their “period of work”. An employee’s period of employment includes not only all time while the employee is actively working but likewise any time that they are not working however the employment relationship still exists, with the following exceptions:

– if a lay-off goes on longer than a momentary lay-off, the staff member’s work is considered (or thought about) to have actually been terminated on the first day of the lay-off-any time after that does not count as part of the worker’s period of employment, even though the employee might still be utilized for functions of the “constantly utilized for 3 months” qualification

– if two different durations 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 been “continually utilized” for three months or more and yet have a duration of employment of less than 3 months. In such scenarios, the staff member would be entitled to see because a staff member who has actually been constantly utilized for at least three months is entitled to observe, and the minimum notification privilege of one week applies to an employee with a duration of work of any length less than one year.

The following chart defines the amount of notice needed:

Note: Special guidelines figure out the amount of notification needed when it comes to mass terminations – where the employment of 50 or more workers is ended at a company’s establishment within a four-week period.

Requirements during the statutory notice period

During the statutory notice duration, a company needs to:

– not lower the staff member’s wage rate or employment alter any other term or condition of work;

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

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

Regular rate

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

Regular salaries

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 severance pay and certain legal privileges.

Regular work week

For a worker who generally works the very same number of hours each week, a regular work week is a week of that many hours, not consisting of overtime hours.

Some employees do not have a regular work week. That is, they do not work the same variety of hours each week or they are paid on a basis aside from time. For these staff members, employment the “routine wages” for a “regular work week” is the average quantity of the routine salaries earned by the staff member in the weeks in which the staff member worked during the duration of 12 weeks instantly preceding the date the notice was given.

An employer is not enabled to set up a staff member’s getaway time throughout the statutory notification period unless the employee-after getting composed notification of termination of employment-agrees to take their getaway time throughout the notification period.

If a company provides longer notice than is needed, the statutory part of the notice duration is the last part of the period that ends on the date of termination.

How to provide written notice

Most of the times, written notice of termination of employment should be resolved to the worker. It can be supplied face to face or by mail, fax or e-mail, as long as delivery can be confirmed.

There are unique guidelines for providing notification of termination if an employee has a contract of employment or a cumulative arrangement that supplies seniority rights that enable a worker who is to be laid off or whose employment is to be terminated to displace (” bump”) other workers.

In that case, the employer should publish 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 employer means to terminate and employment the date of the proposed termination. The posting of the is thought about to be notice of termination, as of the date of the posting, to a worker who is “bumped” by a worker called in the notice. However, this notice of termination need to still fulfill the length requirements set out in the ESA.

There are also special rules regarding how notice is supplied when there is a mass termination.

Termination pay

An employee who does not receive the composed notice needed under the ESA should be provided termination pay in lieu of notice. Termination pay is a swelling amount payment equivalent to the regular earnings for a regular work week that a staff member would otherwise have actually been entitled to throughout the composed notification period. A worker makes vacation pay on their termination pay. Employers need to also continue to make whatever contributions would be needed to preserve the benefits the worker would have been entitled to had they continued to be employed through the notification period.

Example: Regular work week

Sarah has actually worked for three and a half years. Now her job has been removed and her work has been terminated. Sarah was not given any written notice of termination.

Sarah worked 40 hours a week each week and was paid $20.00 an hour. She likewise received 4 per cent trip pay. Because she worked for more than 3 years but less than four years, she is entitled to three weeks’ pay in lieu of notice.

Sarah’s routine incomes for a regular work week are determined:

$ 20.00 an hour X 40 hours a week = $800.00 a week

Her termination pay is determined:

$ 800.00 X 3 weeks = $2,400.00

Then her vacation pay on her termination pay is determined:

4% of $2,400.00 = $96.00

Finally, her getaway pay is included to her termination pay:

$ 2400.00 + $96.00 = $2,496.00

Result: Sarah is entitled to $2,496.00. The company must likewise make sure ongoing protection for any advantage or pension strategies that applied to her for three weeks.

Example: No regular work week

Gerry has worked at an assisted living home for four years. He works weekly, however his hours differ from week to week. His rate of pay is $25.00 an hour, and he is paid 6 percent vacation pay.

Gerry’s company removed his position and did not offer Gerry any composed notification of termination. Gerry was ill and off work for two of the 12 weeks immediately 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 4 weeks of termination pay.

Gerry’s average profits each week are computed:

$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for two weeks for that reason these weeks are not included in the computation of typical profits) = $180.00 a week

His termination pay is computed:

$ 180.00 × 4 weeks = $720.00

Then his vacation pay on his termination pay is calculated:

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 must also make sure continued protection for any benefit or pension strategies that applied to him for four weeks.

When to pay termination pay

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

Mass termination

Special guidelines for notification of termination might use in cases of mass termination (when an employer is terminating 50 or more workers at its establishment within a four-week period).

Meaning of “facility”

An “facility” is an area at which the company carries on business. Separate places can be thought about one facility if either:

– they are situated within the very same municipality, or

– a staff member at one location has legal seniority rights that reach the other location, enabling the worker to displace another employee (also called “bumping rights”).

Effective October 26, 2023, in cases of mass termination, the term “establishment” consists of a staff member’s home, but just if the employee works from home and does not work at any other location where the employer brings on service.

This will need that workers who work exclusively remotely be thought about for inclusion in the count when identifying whether 50 or more employees have actually been ended.

Note that where an employee performs work both from their home and from another area where the company carries on organization (for instance, an office), their home is not included in the meaning of “establishment”. Instead, the worker is thought about to have a connection to the office location and, therefore, for the purpose of mass termination, the worker is included with regard to that workplace area.

Example: where multiple places 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 remotely: she performs work for the company from home and does not work at the office.

For the function of mass termination, the company’s London workplace, London storage facility and Sabrina’s London home are thought about one “establishment.”

Employer obligations in a mass termination

When a mass termination happens, the employer should complete and provide 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 shipment to the Director’s office on a day and at a time when it is open.

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

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

Any notice to the affected staff members is not thought about to have actually been given till the Form 1 is received by the Director; to put it simply, notice of mass termination is ineffective until the Director gets the Form 1.

In addition to offering employees with specific notices of termination, the company must, on the very first day of the notification duration:

– post a copy of the Form 1 offered to the Director in the office where it will pertain to the attention of the impacted employees.

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

The amount of notification staff members must receive in a mass termination is not based on the workers’ length of employment, but on the number of employees who have been ended. An employer needs to provide:

– 8 weeks see if the employment of 50 to 199 workers is to be terminated

– 12 weeks observe if the employment of 200 to 499 staff members is to be terminated

– 16 weeks observe if the work of 500 or more staff members is to be terminated

Exception to the mass termination guidelines

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

– the number of employees whose employment is being ended represents not more than 10 percent of the staff members who have been utilized for at least three months at the facility

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

Mass termination: resignation by a worker

A staff member who has received termination notice under the mass termination guidelines who wants to resign before the termination date provided in the employer’s notice must give the company at least one week’s composed notification of resignation if the worker has been utilized for less than two years. If the work period has been two years or more, the staff member needs to provide at least 2 weeks’ written notification of resignation. However, the worker does not need to provide notice of resignation if the employer constructively dismisses the staff member or breaches a term of the agreement.

Temporary work after termination date in notice

A company can provide work to a worker who has been notified of termination on a momentary basis in the 13-week period after the termination date set out in the notice without affecting the original date of the termination and without being required to supply any more notification of termination to the employee when the short-lived work ends.

If an employee works beyond the 13-week duration after the termination date and then has their employment terminated, the worker will be entitled to a new composed notification of termination as if the previous notice had never been offered. The staff member’s duration of employment will then likewise include the period 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 typically discovered in collective agreements.

A worker who has recall rights and who is entitled to termination pay because of a layoff of 35 weeks or more might 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

– give up their recall rights and get termination pay (and severance pay, if they were entitled to discontinuance wage).

If a staff member is entitled to both termination pay and severance pay, they should make the same choice for employment both.

If a worker who is not represented by a trade union chooses to keep their recall rights or stops working to choose, the employer must send out 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 chooses to keep their recall rights or fails to decide, the employer and the trade union need to try to come to an arrangement to hold the termination pay (and discontinuance wage, if any) in trust for the employee. If they can not concern an arrangement, and the trade union recommends the company and the Director of Employment Standards in composing that efforts have actually stopped working, the company should send out the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.

If an employee selects to give up their recall rights or if the recall rights end, the money that is held in trust must be sent out to the staff member.

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

Exemptions to see of termination or termination pay

A lot of these exemptions are complicated. Please get in touch with the Employment Standards Information Centre, 1-800-531-5551, if you need 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 misconduct, disobedience or wilful disregard of responsibility that is not unimportant and has not been condoned by the company. Note: “wilful” consists of when an employee intended the resulting repercussion or acted recklessly if they understood or ought to have known the effects their conduct would have. Poor work conduct that is unintentional or unintended is generally ruled out wilful;

– was employed for a specific length of time or till the completion of a particular job. However, such an employee will be entitled to discover of termination or termination pay if:- the employment ends before the term ends or the task is completed; or

– the term ends or the job is not finished more than 12 months after the employment began; or

– the work continues for three months or more after the term expires or the job is finished;

See likewise: Employment Standards Self-Service Tool

Wrongful dismissal

Rights greater than ESA notice of termination, termination pay, severance pay

The guidelines under the ESA about termination and severance of employment are minimum requirements. Some employees might have rights under the typical law that are greater than the rights to see of termination (or termination pay) and discontinuance wage under the ESA. An employee may wish to sue their former employer in court for “wrongful termination”. Employees should know that they can not sue an employer for wrongful dismissal and sue for termination pay or severance pay with the ministry for the same termination or severance of work. A worker needs to choose one or the other. Employees might want to acquire legal advice worrying their rights.

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