A number of expressions are typically utilized to describe scenarios when work is ended. These consist of "let go," "released," "dismissed," "fired" and "permanently laid off."
Under the Employment Standards Act, 2000 (ESA) a person's employment is terminated if the company:
- dismisses or stops using a staff member, consisting of where a worker is no longer employed due to the bankruptcy or insolvency of the company;
- "constructively" dismisses an employee and the employee resigns, in reaction, within an affordable time;
- lays an employee off for a duration that is longer than a "short-term layoff".
In many cases, when a company ends the work of a worker who has been continuously used for 3 months, the company needs to provide the employee with either composed notification of termination, termination pay or a combination (as long as the notification and job the variety of weeks of termination pay together equivalent the length of notice the staff member is entitled to get).
The ESA does not need a company to provide a worker a reason why their work is being ended. There are, however, some scenarios where a company can not terminate a staff member's work even if the employer is prepared to provide proper written 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 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 declining to work in excess of the day-to-day or weekly hours of work optimums, or taking a leave of absence defined in the ESA. Please see the chapter on reprisals.
Qualifying for termination notice or pay in lieu
Certain workers are not entitled to observe of termination or termination pay under the ESA. Examples include: staff members who are guilty of wilful misbehavior, disobedience, or job wilful disregard of task that is not unimportant and has actually not been condoned by the company. Other examples include building and construction workers, workers on momentary layoff, staff members who decline a deal of sensible alternative employment and staff members who have actually been utilized less than three months.
There are a variety of other exemptions to the termination of work arrangements of the ESA. See "Exemptions to observe of termination or termination pay." Please also refer to the unique guideline tool.
The termination-of-employment guidelines are completely different from any privileges an employee may need to be paid discontinuance wage under the ESA.
Constructive termination
A useful termination may happen when a company makes a significant change to a fundamental term or condition of an employee's employment without the worker's actual or implied permission.
For example, a worker might be constructively dismissed if the employer makes modifications to the staff member's terms of work that result in a substantial decrease in wage or a substantial negative modification in such things as the worker's work place, hours of work, authority, or position. Constructive dismissal may also include situations where an employer pesters or abuses a worker, or an employer gives a staff member a warning to "stop or be fired" and the staff member resigns in action.
The worker would need to resign in response to the modification within an affordable amount of time in order for the employer's actions to be considered a termination of work for functions of the ESA.
Constructive dismissal is a complex and challenging subject. For additional information on constructive dismissal, please call the Employment Standards Information Centre at 1-800-531-5551.
Temporary layoff
An employee is on short-term layoff when an employer cuts down or stops the employee's work without ending their work (for example, laying someone off at times when there is inadequate work to do). The mere fact that the employer does not define a recall date when laying the staff member off does not always suggest that the lay-off is not temporary. Note, nevertheless, that a lay-off, even if intended to be temporary, might lead to constructive dismissal if it is not permitted by the employment agreement.
For the purposes of the termination provisions of the ESA, a "week of layoff" is a week in which the worker made less than half of what they would generally make (or earns typically) in a week.
A week of layoff does not include any week in which the employee did not work for job several days because the worker was not able or offered to work, went through disciplinary suspension, or was not supplied with work due to the fact that of a strike or lockout at their location of employment or somewhere else.
Employers are not needed under the ESA to provide staff members with a composed notification of a short-term layoff, nor do they need to supply a reason for the lay-off. (They may, however, be needed to do these things under a collective agreement or an employment agreement.)
Under the ESA, a "momentary layoff" can last:
1. not more than 13 weeks of layoff in any duration 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 duration of 52 consecutive weeks, where:- the staff member continues to receive considerable payments from the company;
or
- the company continues to make payments 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 legitimate retirement or pension;
or
- the worker receives supplemental joblessness benefits;
or
- the worker would be entitled to receive extra welfare however isn't getting them due to the fact that they are utilized elsewhere;
or
- the company remembers the employee to work within the time frame approved by the Director of Employment Standards;
or
- the company recalls the worker within the time frame set out in an agreement with a worker who is not represented by a trade union;
or
3. a layoff longer than a layoff described in 'B' where the company remembers an employee who is represented by a trade union within the time set out in an arrangement in between the union and the company.
If a staff member is laid off for a period longer than a temporary layoff as set out above, the employer is thought about to have actually terminated the worker's work. Generally, the worker will then be entitled to termination pay.
Written notification of termination and termination pay
Under the ESA, job a company can terminate the employment of a staff member who has been utilized continuously for three months or more if either:
- the employer has actually provided the staff member proper composed notification of termination and the notification period has expired
- the company pays termination pay to the employee where no written notice or less notice than is required is given
Written notice of termination
A worker is entitled to see of termination (or termination pay instead of notice) if they have been constantly employed for at least 3 months. A person is considered "used" not only while they are actively working, but likewise during any time in which they are not working but the employment relationship still exists (for example, time in which the worker is off ill or on leave or on lay-off).
The quantity of notice to which a worker is entitled depends on their "period of work". An employee's period of work includes not only perpetuity while the staff member is actively working but also at 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 short-lived lay-off, the worker's employment is deemed (or considered) to have been terminated on the very first day of the lay-off-any time after that does not count as part of the worker's period of work, although the worker might still be utilized for functions of the "continuously used for 3 months" credentials
- if 2 separate periods of employment are separated by more than 13 weeks, just the most recent period counts for functions of notice of termination
It is possible, in some circumstances, for an individual to have actually been "constantly utilized" for 3 months or more and yet have a period of work of less than 3 months. In such scenarios, the worker would be entitled to see because a worker who has actually been constantly utilized for at least 3 months is entitled to see, and the minimum notice privilege of one week uses to a worker with a period of work of any length less than one year.
The following chart defines the amount of notice needed:
Note: Special rules identify the amount of notification required when it comes to mass terminations - where the employment of 50 or more employees is ended at an employer's facility within a four-week duration.
Requirements throughout the statutory notice period
During the statutory notification duration, a company must:
- not lower the employee's wage rate or change any other term or condition of work;
- continue to make whatever contributions would be required to preserve the worker's advantages strategies; and
- pay the employee the earnings they are entitled to, which can not be less than the worker's routine salaries for a routine work week each week.
Regular rate
This is a staff member's rate of spend for each non-overtime hour of operate in the worker's work week.
Regular salaries
These are incomes besides overtime pay, vacation pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of task pay, termination pay and severance pay and certain contractual entitlements.
Regular work week
For a staff member who generally works the very same variety of hours weekly, a regular work week is a week of that numerous 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 every week or they are paid on a basis besides time. For these employees, job the "regular salaries" for a "regular work week" is the average amount of the routine incomes earned by the worker in the weeks in which the employee worked throughout the period of 12 weeks instantly preceding the date the notice was provided.
An employer is not enabled to set up a staff member's vacation time during the statutory notice period unless the employee-after getting written notification of termination of employment-agrees to take their holiday time throughout the notice period.
If a company provides longer notification than is needed, the statutory part of the notification period is the last part of the duration that ends on the date of termination.
How to provide written notice
In many cases, written notice of termination of employment must be dealt with to the staff member. It can be provided in person or by mail, fax or e-mail, as long as delivery can be validated.
There are unique guidelines for offering notice of termination if a staff member has a contract of employment or a cumulative arrangement that offers seniority rights that enable an employee who is to be laid off or whose employment is to be terminated to displace (" bump") other staff members.
In that case, the employer must publish a notification in the office (where it will be seen by the workers) setting out the names, seniority and job classification of those workers the employer means to terminate and the date of the proposed termination. The posting of the notification is considered to be notice of termination, as of the date of the publishing, to an employee who is "bumped" by an employee named in the notice. However, this notification of termination need to still fulfill the length requirements set out in the ESA.
There are also unique rules concerning how notice is provided when there is a mass termination.
Termination pay
A staff member who does not receive the composed notification required under the ESA should be offered termination pay in lieu of notification. Termination pay is a swelling sum payment equivalent to the routine earnings for a regular work week that a staff member would otherwise have been entitled to throughout the written notice period. An employee earns vacation pay on their termination pay. Employers need to also continue to make whatever contributions would be needed to keep the advantages the staff member would have been entitled to had they continued to be utilized through the notice duration.
Example: Regular work week
Sarah has actually worked for three and a half years. Now her job has been removed and her employment has been terminated. Sarah was not offered any composed notice of termination.
Sarah worked 40 hours a week each week and was paid $20.00 an hour. She also got four percent vacation 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 regular wages for a regular 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 computed:
4% of $2,400.00 = $96.00
Finally, her trip pay is included to her termination pay:
$ 2400.00 + $96.00 = $2,496.00
Result: Sarah is entitled to $2,496.00. The employer needs to likewise guarantee ongoing protection for any benefit or pension strategies that applied to her for three weeks.
Example: No routine work week
Gerry has actually worked at a retirement 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 getaway 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 instantly preceding the day his employment 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 earnings each week are calculated:
$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for 2 weeks for that reason these weeks are not included in the calculation of average incomes) = $180.00 a week
His termination pay is determined:
$ 180.00 × 4 weeks = $720.00
Then his holiday pay on his termination pay is calculated:
6% of $720.00 = $43.20
Finally, his getaway pay is added to his termination pay:
$ 720.00 + $43.20 = $763.20
Result: Gerry is entitled to $763.20. The company needs to also make sure ongoing protection for any benefit or pension strategies that used to him for 4 weeks.
When to pay termination pay
Termination pay need to be paid to a worker either seven days after the employee's work is ended or on the employee's next routine pay date, whichever is later on.
Mass termination
Special guidelines for notification of termination may use in cases of mass termination (when an employer is terminating 50 or more staff members at its establishment within a four-week period).
Meaning of "facility"
An "establishment" is a place at which the company brings on service. Separate areas can be considered one facility if either:
- they are located within the exact same municipality, or
- a staff member at one location has legal seniority rights that reach 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 "establishment" includes a staff member's home, however just if the employee works from home and does not work at any other location where the company brings on organization.
This will need that employees who work exclusively remotely be thought about for addition in the count when figuring out whether 50 or more employees have been ended.
Note that where a worker performs work both from their home and from another area where the company continues business (for example, a workplace), their home is not included in the meaning of "establishment". Instead, the employee is considered to have a connection to the office place and, therefore, for the purpose of mass termination, the worker is included with respect to that office location.
Example: where multiple places are considered one "facility"
ABC Company has a workplace and a storage facility situated in London, ON. Sabrina lives in London and works for ABC Company specifically remotely: she carries out work for the business from home and does not work at the office.
For the function of mass termination, the company's London office, London storage facility and Sabrina's London home are thought about one "establishment."
Employer responsibilities in a mass termination
When a mass termination takes place, the company must complete 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 shipment to the Director's workplace, if the delivery can be verified.
The workplace of the Director of Employment Standards is located on the 9th floor, 400 University Avenue, Toronto ON M7A 1T7.
Any notice to the impacted staff members is not considered to have been provided up until the Form 1 is gotten by the Director; simply put, notification of mass termination is not reliable until the Director receives the Form 1.
In addition to providing staff members with private notifications of termination, the employer must, on the first day of the notice duration:
- publish a copy of the Form 1 provided to the Director in the workplace where it will concern the attention of the affected staff members.
- supply a copy of the Form 1 to each impacted employee.
The amount of notice employees should get in a mass termination is not based upon the staff members' length of employment, but on the number of workers who have been ended. An employer must offer:
- 8 weeks observe if the work of 50 to 199 workers is to be terminated
- 12 weeks discover if the employment of 200 to 499 employees is to be terminated
- 16 weeks discover if the employment of 500 or more workers is to be ended
Exception to the mass termination rules
The mass termination rules do not apply if these two things use:
- the number of staff members whose work is being ended represents not more than 10 per cent of the employees who have been used for a minimum of three months at the facility
- none of the terminations are triggered by the long-term discontinuance of all or part of the employer's organization at the facility
Mass termination: resignation by a staff member
A worker who has gotten termination notification under the mass termination rules who wants to resign before the termination date offered in the company's notice must offer the company a minimum of one week's written notification of resignation if the staff member has been employed for less than 2 years. If the employment period has actually been 2 years or more, the employee should offer a minimum of two weeks' written notice of resignation. However, the staff member does not have to provide notification of resignation if the company constructively dismisses the worker or breaches a term of the contract.
Temporary work after termination date in notification
An employer can supply work to an employee who has actually been given notice of termination on a short-term 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 offer any further notification of termination to the worker when the short-lived work ends.
If a worker works beyond the 13-week duration after the termination date and then has their employment ended, the employee will be entitled to a brand-new composed notice of termination as if the previous notification had never been given. The worker's duration of employment will then likewise consist of the period of short-term work.
Recall rights
A "recall right" is the right of a staff member on a layoff to be recalled to work by their employer under a term or condition of employment. This right is commonly found in cumulative contracts.
An employee who has recall rights and who is entitled to termination pay due to the fact that of a layoff of 35 weeks or more might select to:
- keep their recall rights and not be paid termination pay (or discontinuance wage, if they were entitled to discontinuance wage) at that time;
or
- offer up their recall rights and get termination pay (and discontinuance wage, if they were entitled to discontinuance wage).
If a staff member is entitled to both termination pay and severance pay, they need to make the exact same choice for both.
If a staff member who is not represented by a trade union chooses to keep their recall rights or stops working to choose, the company must send out the amount of the termination pay (and discontinuance wage, if any) to the Director of Employment Standards, who holds the cash in trust.
If a worker who is represented by a trade union elects to keep their recall rights or fails to choose, the company and the trade union must attempt to come to an arrangement to hold the termination pay (and discontinuance wage, if any) in trust for the staff member. If they can not come to a plan, and the trade union recommends the employer and the Director of Employment Standards in writing that efforts have failed, the company should send out the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.
If a staff member chooses to offer up their recall rights or if the recall rights expire, the money that is held in trust should be sent 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 employer.
Exemptions to observe of termination or termination pay
Much of these exemptions are intricate. Please call the Employment Standards Information Centre, 1-800-531-5551, if you need more details. Please likewise refer to the special rule tool.
The notification of termination and termination pay requirements of the ESA do not use to a staff member who:
- is guilty of wilful misconduct, disobedience or wilful disregard of duty that is not unimportant and has actually not been excused by the company. Note: "wilful" consists of when an employee planned the resulting repercussion or acted recklessly if they knew or should have understood the impacts their conduct would have. Poor work conduct that is accidental or unintended is normally ruled out wilful;
- was employed for a particular length of time or until the completion of a particular task. However, such an employee will be entitled to observe of termination or termination pay if:- the work ends before the term ends or the job is completed; or
- the term expires or the task is not finished more than 12 months after the work started; or
- the work continues for three months or more after the term ends or the job 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 work are minimum requirements. Some employees might have rights under the common law that are greater than the rights to see of termination (or termination pay) and severance pay under the ESA. A staff member might desire to sue their former company in court for "wrongful dismissal". Employees need to know that they can not take legal action against a company for wrongful dismissal and submit a claim for termination pay or severance pay with the ministry for the very same termination or severance of employment. A worker needs to select one or the other. Employees might wish to get legal guidance worrying their rights.
