A variety of expressions are commonly used to describe situations when employment is ended. These consist of "let go," "released," "dismissed," "fired" and "permanently laid off."
Under the Employment Standards Act, 2000 (ESA) an individual's work is terminated if the employer:
- dismisses or stops using an employee, including where an employee is no longer used due to the insolvency or insolvency of the employer;
- "constructively" dismisses an employee and the staff member resigns, job in reaction, job within a sensible time;
- lays a worker off for a period that is longer than a "short-lived layoff".
Most of the times, when a company ends the work of a worker who has been continually employed for three months, the employer should supply the worker with either composed notice of termination, termination pay or a mix (as long as the notice and the variety of weeks of termination pay together equivalent the length of notification the staff member is entitled to get).
The ESA does not need a company to give a staff member a reason that their work is being ended. There are, however, some circumstances where an employer can not terminate a worker's work even if the company is prepared to offer correct written notice or termination pay. For instance, an employer can not end someone's work, or punish them in any other way, if any part of the reason for the termination of employment is based on the staff member asking concerns 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 notification or pay in lieu
Certain staff members are not entitled to notice of termination or termination pay under the ESA. Examples include: staff members who are guilty of wilful misconduct, disobedience, or wilful neglect of task that is not unimportant and has not been excused by the company. Other examples consist of building workers, workers on temporary layoff, staff members who refuse an offer of affordable alternative employment and staff members who have been employed less than 3 months.
There are a number of other exemptions to the termination of work provisions of the ESA. See "Exemptions to observe of termination or termination pay." Please also describe the special rule tool.
The termination-of-employment guidelines are entirely separate from any entitlements a worker might need to be paid discontinuance wage under the ESA.
Constructive termination
A positive dismissal might take place when an employer makes a substantial change to a fundamental term or condition of a staff member's work without the worker's actual or implied authorization.
For example, an employee may be constructively dismissed if the company makes modifications to the employee's conditions of employment that result in a significant reduction in wage or a significant unfavorable change in such things as the employee's work location, hours of work, authority, or position. Constructive dismissal may also consist of scenarios where an employer pesters or abuses an employee, or an employer gives a staff member a warning to "quit or be fired" and the staff member resigns in reaction.
The employee would need to resign in reaction to the change within an affordable time period in order for the company's actions to be considered a termination of employment for functions of the ESA.
Constructive termination is a complex and difficult topic. For more details on constructive dismissal, please call the Employment Standards Information Centre at 1-800-531-5551.
Temporary layoff
A worker is on temporary layoff when a company cuts back or stops the worker's work without ending their work (for instance, laying someone off at times when there is insufficient work to do). The mere truth that the company does not define a recall date when laying the employee off does not always suggest that the lay-off is not short-lived. Note, however, that a lay-off, even if planned to be temporary, might lead to positive dismissal if it is not allowed by the employment agreement.
For the purposes of the termination provisions of the ESA, a "week of layoff" is a week in which the staff member earned less than half of what they would ordinarily make (or earns on average) in a week.
A week of layoff does not consist of any week in which the employee did not work for one or more days since the employee was not able or offered to work, underwent disciplinary suspension, or was not provided 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 staff members with a composed notification of a temporary layoff, nor do they need to supply a factor for the lay-off. (They may, nevertheless, be needed to do these things under a collective arrangement or an employment contract.)
Under the ESA, a "momentary 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 successive weeks, but less than 35 weeks of layoff in any duration of 52 successive weeks, where:- the staff member continues to receive substantial payments from the company;
or
- the employer continues to pay for the advantage of the employee under a genuine group or worker insurance coverage plan (such as a medical or drug insurance coverage plan) or a legitimate retirement or pension strategy;
or
- the staff member gets extra joblessness benefits;
or
- the staff member would be entitled to get extra joblessness advantages but isn't getting them due to the fact that they are utilized in other places;
or
- the employer recalls the staff member to work within the time frame approved by the Director of Employment Standards;
or
- the company recalls the staff member within the time frame set out in a contract with a worker who is not represented by a trade union;
or
3. a layoff longer than a layoff described in 'B' where the employer 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 a staff member is laid off for a duration longer than a momentary layoff as set out above, the employer is considered to have terminated the staff member's work. Generally, the staff member will then be entitled to termination pay.
Written notification of termination and termination pay
Under the ESA, an employer can terminate the employment of an employee who has been used continually for three months or more if either:
- the company has provided the staff member correct composed notification of termination and the notification period has actually expired
- the company pays termination pay to the employee where no written notice or less notice than is required is given
Written notification of termination
A worker is entitled to observe of termination (or termination pay instead of notice) if they have actually been constantly used for at least 3 months. An individual is considered "used" not just while they are actively working, however likewise during at any time 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 notice to which an employee is entitled depends upon their "period of work". A staff member's duration of employment consists of not only all time while the worker is actively working but also 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 momentary lay-off, the worker's employment is considered (or considered) to have been ended on the first day of the lay-off-any time after that does not count as part of the worker's period of employment, although the worker may still be used for purposes of the "continuously utilized for 3 months" credentials
- if two separate periods of employment are separated by more than 13 weeks, only the most current period counts for functions of notice of termination
It is possible, in some situations, for a person to have actually been "continuously used" for three months or more and yet have a duration of work of less than 3 months. In such circumstances, the employee would be entitled to notice due to the fact that an employee who has been continuously used for a minimum of three months is entitled to notice, and the minimum notification privilege of one week uses to a worker with a period of employment of any length less than one year.
The following chart specifies the quantity of notification needed:
Note: Special rules determine the amount of notification needed in the case of mass terminations - where the work of 50 or more staff members is terminated at a company's facility within a four-week duration.
Requirements throughout the statutory notification duration
During the statutory notification duration, an employer should:
- not lower the worker's wage rate or modify any other term or condition of employment;
- continue to make whatever contributions would be required to maintain the staff member's advantages strategies; and
- pay the worker the incomes they are entitled to, which can not be less than the staff member's routine earnings for a routine work week every week.
Regular rate
This is a staff member's rate of spend for each non-overtime hour of work in the worker's work week.
Regular salaries
These are incomes aside from overtime pay, trip pay, public vacation pay, premium pay, domestic or sexual violence leave pay, termination of assignment pay, termination pay and discontinuance wage and specific contractual privileges.
Regular work week
For an employee who usually works the same number of hours weekly, a routine work week is a week of that many hours, not including overtime hours.
Some employees do not have a routine work week. That is, they do not work the very same number of hours weekly or they are paid on a basis other than time. For these employees, the "routine salaries" for a "routine work week" is the average amount of the regular wages made by the worker in the weeks in which the worker worked throughout the period of 12 weeks right away preceding the date the notice was given.
An employer is not enabled to arrange an employee's vacation time throughout the statutory notice duration unless the employee-after receiving written notice of termination of employment-agrees to take their getaway time throughout the notification duration.
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 notification
For the most part, composed notification of termination of employment should be dealt with to the worker. It can be offered personally or by mail, fax or email, as long as shipment can be validated.
There are special guidelines for job offering notification of termination if an employee has an agreement of employment or a collective contract that offers seniority rights that enable an employee who is to be laid off or whose work is to be ended to displace (" bump") other staff members.
Because case, the company must post a notice in the work environment (where it will be seen by the staff members) setting out the names, seniority and task category of those workers the company plans to terminate and the date of the proposed termination. The publishing of the notice is considered to be notification of termination, as of the date of the publishing, to a staff member who is "bumped" by an employee named in the notice. However, this notification of termination should still meet the length requirements set out in the ESA.
There are also special rules regarding how notification is supplied when there is a mass termination.
Termination pay
An employee who does not receive the written notice required under the ESA must be provided termination pay in lieu of notification. Termination pay is a swelling sum payment equivalent to the routine salaries for a routine work week that a worker would otherwise have been entitled to during the written notice period. A worker earns getaway pay on their termination pay. Employers need to likewise continue to make whatever contributions would be required to maintain 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 job three and a half years. Now her job has actually been eliminated and her employment has actually been ended. Sarah was not provided any written notice of termination.
Sarah worked 40 hours a week weekly and was paid $20.00 an hour. She also received four percent getaway pay. Because she worked for more than three years however less than four years, she is entitled to 3 weeks' pay in lieu of notice.
Sarah's routine earnings for a regular work week are calculated:
$ 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 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 make sure ongoing protection for any advantage or pension that used to her for three weeks.
Example: No regular work week
Gerry has operated at a retirement home for 4 years. He works every week, but 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 employer eliminated his position and did not offer Gerry any written notification of termination. Gerry was ill and off work for 2 of the 12 weeks instantly preceding the day his work was ended. Gerry made $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 profits each week are computed:
$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off sick for 2 weeks for that reason these weeks are not included in the estimation of typical earnings) = $180.00 a week
His termination pay is determined:
$ 180.00 × 4 weeks = $720.00
Then his trip pay on his termination pay is calculated:
6% of $720.00 = $43.20
Finally, his trip pay is added to his termination pay:
$ 720.00 + $43.20 = $763.20
Result: Gerry is entitled to $763.20. The company needs to likewise guarantee continued coverage for any advantage or pension strategies that applied to him for four weeks.
When to pay termination pay
Termination pay must be paid to a staff member either 7 days after the employee's employment is ended or on the employee's next regular pay date, whichever is later.
Mass termination
Special rules for notice of termination may use 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 "facility" is a location at which the company continues company. Separate areas can be thought about one establishment if either:
- they are located within the same municipality, or
- an employee at one place has contractual seniority rights that reach the other location, allowing the staff member to displace another worker (also called "bumping rights").
Effective October 26, 2023, in cases of mass termination, the term "facility" includes a worker's home, but only if the worker works from home and does not work at any other place where the company carries on business.
This will need that staff members who work solely from another location be considered for addition in the count when identifying whether 50 or more employees have been ended.
Note that where an employee carries out work both from their home and from another place where the employer brings on service (for instance, a workplace), their home is not included in the meaning of "establishment". Instead, the staff member is thought about to have a connection to the office place and, for that reason, for the function of mass termination, the employee is consisted of with regard to that workplace place.
Example: where multiple locations are thought about one "facility"
ABC Company has a workplace and a warehouse situated in London, ON. Sabrina lives in London and works for ABC Company solely remotely: she carries out work for the business from home and does not work at the office.
For the purpose of mass termination, the business's London workplace, job London storage facility and Sabrina's London home are thought about one "facility."
Employer responsibilities in a mass termination
When a mass termination occurs, the employer needs to 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.
- individual shipment to the Director's office on a day and at a time when it is open.
- mail delivery to the Director's workplace, if the delivery can be validated.
The office of the Director of Employment Standards is located on the 9th floor, 400 University Avenue, Toronto ON M7A 1T7.
Any notification to the affected workers is ruled out to have been given up until the Form 1 is gotten by the Director; in other words, notification of mass termination is not effective till the Director receives the Form 1.
In addition to providing employees with private notices of termination, the company must, on the very first day of the notice period:
- post a copy of the Form 1 offered to the Director in the workplace where it will come to the attention of the impacted staff members.
- provide a copy of the Form 1 to each affected worker.
The quantity of notice employees should receive in a mass termination is not based upon the employees' length of work, however on the variety of employees who have been terminated. An employer should offer:
- 8 weeks see if the work of 50 to 199 employees is to be terminated
- 12 weeks see if the work of 200 to 499 employees is to be ended
- 16 weeks discover if the work of 500 or more employees is to be terminated
Exception to the mass termination rules
The mass termination rules do not apply if these two things apply:
- the number of workers whose employment is being ended represents not more than 10 per cent of the staff members who have actually been employed for job at least 3 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 establishment
Mass termination: resignation by an employee
A staff member who has received termination notification under the mass termination guidelines who wishes to resign before the termination date offered in the company's notice should provide the company a minimum of one week's composed notice of resignation if the worker has been used for less than two years. If the employment period has actually been two years or more, the employee should provide at least two weeks' composed notification of resignation. However, the employee does not need to notify of resignation if the employer constructively dismisses the employee or breaches a regard to the agreement.
Temporary work after termination date in notification
A company can supply work to an employee who has actually been notified of termination on a short-lived basis in the 13-week period after the termination date set out in the notification without affecting the original date of the termination and without being needed to provide any additional notice of termination to the employee when the momentary work ends.
If a staff member works beyond the 13-week period after the termination date and after that has their work ended, the employee will be entitled to a new composed notice of termination as if the previous notification had actually never ever been offered. The staff member's duration of work will then also include the period of momentary work.
Recall rights
A "recall right" is the right of a worker 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 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 may 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
- quit their recall rights and get termination pay (and severance pay, if they were entitled to severance pay).
If a staff member is entitled to both termination pay and discontinuance wage, they need to make the exact same choice for both.
If a worker who is not represented by a trade union elects to keep their recall rights or fails to choose, the company must send out the amount of the termination pay (and severance pay, if any) to the Director of Employment Standards, who holds the cash in trust.
If an employee who is represented by a trade union chooses to keep their recall rights or fails to decide, the company and the trade union need to try to come to a plan to hold the termination pay (and discontinuance wage, if any) in trust for the staff member. If they can not pertain to an arrangement, and job the trade union advises the employer and the Director of Employment Standards in writing that efforts have failed, 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 a staff member chooses to quit their recall rights or if the recall rights expire, the money that is kept in trust should be sent out to the staff member.
If the staff member accepts a recall back to work, the cash that is held in trust will be returned to the company.
Exemptions to observe of termination or termination pay
Many of these exemptions are complicated. Please contact the Employment Standards Information Centre, 1-800-531-5551, if you need more information. Please likewise describe 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 neglect of duty that is not minor and has not been excused by the company. Note: "wilful" consists of when a staff member intended the resulting consequence or acted recklessly if they knew or need to have understood the effects their conduct would have. Poor work conduct that is unintentional or unintentional is normally ruled out wilful;
- was employed for a specific length of time or up until the completion of a particular job. However, such a worker will be entitled to notice of termination or termination pay if:- the employment ends before the term ends or the task is completed; or
- the term expires or the task is not finished more than 12 months after the work began; or
- the work continues for three months or more after the term expires or the job is finished;
See also: Employment Standards Self-Service Tool
Wrongful dismissal
Rights higher than ESA notice of termination, termination pay, severance pay
The rules under the ESA about termination and severance of employment are minimum requirements. Some workers 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 wish to sue their former company in court for "wrongful termination". Employees ought to understand that they can not sue a company for wrongful dismissal and sue for termination pay or discontinuance wage with the ministry for the same termination or severance of work. An employee needs to select one or the other. Employees may want to acquire legal guidance concerning their rights.
