A variety of expressions are commonly used to describe situations when work is terminated. These consist of "release," "released," "dismissed," "fired" and "completely laid off."
Under the Employment Standards Act, 2000 (ESA) an individual's work is terminated if the company:
- dismisses or stops using a staff member, including where a staff member is no longer utilized due to the insolvency or insolvency of the company;
- "constructively" dismisses a staff member and the staff member resigns, in response, within a sensible time;
- lays an employee off for a duration that is longer than a "short-term layoff".
In the majority of cases, when a company ends the employment of a staff member who has actually been continuously employed for 3 months, the employer should offer the worker with either written notice of termination, termination pay or a combination (as long as the notification and the variety of weeks of termination pay together equivalent the length of notification the employee is entitled to get).
The ESA does not require an employer to provide a staff member a reason why their work is being terminated. There are, nevertheless, some circumstances where an employer can not end an employee's work even if the company is prepared to offer correct composed notification or termination pay. For instance, an employer can not end somebody's work, or punish them in any other method, if any part of the reason for the termination of work 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 day-to-day or weekly hours of work optimums, or taking a leave of lack defined in the ESA. Please see the chapter on reprisals.
Getting approved for termination notification or pay in lieu
Certain workers are not entitled to observe of termination or termination pay under the ESA. Examples include: employees who are guilty of wilful misbehavior, disobedience, or wilful disregard of duty that is not minor and has not been condoned by the company. Other examples include building and construction workers, workers on temporary layoff, employment staff members who refuse a deal of affordable alternative employment and staff members who have actually been employed less than 3 months.
There are a variety of other exemptions to the termination of work provisions of the ESA. See "Exemptions to observe of termination or termination pay." Please also refer to the unique guideline tool.
The termination-of-employment rules are completely separate from any privileges a worker may need to be paid severance pay under the ESA.
Constructive dismissal
A constructive termination may occur when a company makes a substantial modification to a basic term or condition of a worker's work without the employee's actual or implied permission.
For instance, a worker might be constructively dismissed if the company makes changes to the staff member's terms and conditions of work that result in a substantial decrease in income or a considerable negative modification in such things as the employee's work location, hours of work, authority, or position. Constructive dismissal might likewise include scenarios where a company bothers or employment abuses a staff member, or an employer offers a worker a warning to "stop or be fired" and the employee resigns in reaction.
The worker would have to resign in response to the change within a sensible period of time in order for the company's actions to be thought about a termination of work for purposes of the ESA.
Constructive dismissal is a complex and challenging subject. For more details on useful dismissal, please get in touch with the Employment Standards Information Centre at 1-800-531-5551.
Temporary layoff
An employee is on short-term layoff when an employer cuts back or stops the employee's work without ending their work (for example, laying somebody off at times when there is inadequate work to do). The mere reality that the company does not define a recall date when laying the employee off does not always imply that the lay-off is not momentary. Note, nevertheless, that a lay-off, even if intended to be momentary, might lead to constructive dismissal if it is not permitted by the employment agreement.
For the functions of the termination provisions of the ESA, a "week of layoff" is a week in which the worker made less than half of what they would generally earn (or makes on average) in a week.
A week of layoff does not include any week in which the staff member did not work for one or more days since the employee was unable or available to work, went through disciplinary suspension, or was not provided with work because of a strike or lockout at their place of work or somewhere else.
Employers are not needed under the ESA to provide workers with a written notice of a short-term layoff, nor do they have to supply a reason 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 "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 duration of 20 consecutive weeks, however less than 35 weeks of layoff in any period of 52 successive weeks, where:- the staff member continues to receive significant payments from the employer;
or
- the company continues to pay for the advantage of the staff member under a genuine group or staff member insurance strategy (such as a medical or drug insurance plan) or a genuine retirement or pension;
or
- the worker gets supplemental welfare;
or
- the staff member would be entitled to receive supplemental welfare however isn't receiving them due to the fact that they are employed somewhere else;
or
- the company remembers the staff member to work within the time frame approved by the Director of Employment Standards;
or
- the company remembers the staff member within the time frame set out in a contract 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 in between the union and the company.
If a staff member is laid off for a duration longer than a short-lived layoff as set out above, the company is thought about to have terminated the worker'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 work of an employee who has been used constantly for three months or more if either:
- the employer has offered the staff member proper written notice of termination and the notice duration has actually ended
- the employer pays termination pay to the employee where no written notice or less notice than is needed is offered
Written notice of termination
An employee is entitled to discover of termination (or termination pay rather of notice) if they have actually been continually used for at least three months. An individual is considered "utilized" not just while they are actively working, however likewise throughout at any time in which they are not working however the employment relationship still exists (for instance, time in which the worker is off sick or on leave or on lay-off).
The amount of notification to which a staff member is entitled depends upon their "period of work". An employee's period of employment consists of not only perpetuity while the staff member is actively working however likewise at any time that they are not working but the work relationship still exists, with the following exceptions:
- if a lay-off goes on longer than a short-lived lay-off, the staff member's employment is considered (or considered) to have been terminated on the first day of the lay-off-any time after that does not count as part of the employee's period of employment, despite the fact that the employee may still be used for purposes of the "constantly employed for 3 months" certification
- if 2 separate durations of employment are separated by more than 13 weeks, just the most recent duration counts for functions of notice of termination
It is possible, in some scenarios, for an individual to have been "constantly employed" for 3 months or more and yet have a period of employment of less than three months. In such situations, the employee would be entitled to see due to the fact that a worker who has actually been constantly used for a minimum of 3 months is entitled to discover, and the minimum notification privilege of one week applies to a worker with a duration of work of any length less than one year.
The following chart specifies the amount of notification needed:
Note: Special rules determine the amount of notice needed when it comes to mass terminations - where the employment of 50 or more employees is ended at a company's facility within a four-week period.
Requirements during the statutory notice period
During the statutory notification duration, an employer needs to:
- not decrease the staff member's wage rate or modify any other term or condition of employment;
- continue to make whatever contributions would be needed to preserve the employee's benefits strategies; and
- pay the employee the incomes they are entitled to, which can not be less than the staff member's regular wages for a routine work week weekly.
Regular rate
This is a worker's rate of pay for each non-overtime hour of work in the worker's work week.
Regular earnings
These are salaries other than overtime pay, trip pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of project pay, termination pay and severance pay and specific contractual entitlements.
Regular work week
For a worker who generally works the very same variety of hours weekly, a routine work week is a week of that lots of hours, not consisting of overtime hours.
Some staff members do not have a regular work week. That is, they do not work the exact same variety of hours each week or they are paid on a basis aside from time. For these employees, the "regular earnings" for a "routine work week" is the typical amount of the routine wages made by the worker in the weeks in which the staff member worked during the duration of 12 weeks immediately preceding the date the notice was given.
An employer is not enabled to arrange a worker's holiday time throughout the statutory notification period unless the employee-after receiving written notice of termination of employment-agrees to take their holiday time throughout the notice period.
If an employer provides longer notice than is required, the statutory part of the notification duration is the last part of the duration that ends on the date of termination.
How to provide written notification
Most of the times, written notification of termination of work should be addressed to the worker. It can be supplied personally or by mail, fax or email, as long as shipment can be verified.
There are special rules for supplying notification of termination if a staff member has an agreement of work or a cumulative arrangement that supplies seniority rights that permit a worker who is to be laid off or whose employment is to be terminated to displace (" bump") other staff members.
In that case, the company should publish a notification in the office (where it will be seen by the staff members) setting out the names, seniority and job classification of those staff members the employer plans to terminate and the date of the proposed termination. The posting of the notice is considered to be notice of termination, as of the date of the publishing, to a staff member who is "bumped" by a worker named in the notification. However, this notice of termination must still meet the length requirements set out in the ESA.
There are likewise unique rules regarding how notice is provided when there is a mass termination.
Termination pay
A worker who does not get the written notice needed under the ESA needs to be provided termination pay in lieu of notice. Termination pay is a swelling sum payment equal to the routine incomes for a regular work week that a worker would otherwise have actually been entitled to throughout the written notice period. An employee earns vacation pay on their termination pay. Employers need to likewise continue to make whatever contributions would be required to keep the benefits the staff member would have been entitled to had they continued to be utilized through the notification duration.
Example: Regular work week
Sarah has worked for 3 and a half years. Now her task has been removed and her employment has been ended. Sarah was not provided any written notification of termination.
Sarah worked 40 hours a week every week and was paid $20.00 an hour. She also got four percent trip pay. Because she worked for more than three years however less than 4 years, she is entitled to three weeks' pay in lieu of notice.
Sarah's regular salaries for a routine 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 holiday pay is included to her termination pay:
$ 2400.00 + $96.00 = $2,496.00
Result: Sarah is entitled to $2,496.00. The company should also guarantee continued coverage for any advantage or pension strategies that used to her for three weeks.
Example: No routine work week
Gerry has worked at a retirement home for four years. He works every week, however his hours vary from week to week. His rate of pay is $25.00 an hour, employment and he is paid 6 percent trip pay.
Gerry's employer removed his position and did not provide Gerry any written notice of termination. Gerry was ill and employment off work for 2 of the 12 weeks right away preceding the day his work was ended. Gerry made $1,800.00 in the 12 weeks before the day on which his employment ended.
Gerry is entitled to four weeks of termination pay.
Gerry's average earnings weekly are computed:
$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off sick for two weeks for that reason these weeks are not consisted of in the calculation of typical profits) = $180.00 a week
His termination pay is calculated:
$ 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 employer should likewise make sure continued protection for any advantage or pension that applied to him for four weeks.
When to pay termination pay
Termination pay should be paid to a worker either seven days after the staff member's work is ended or on the worker's next routine pay date, whichever is later.
Mass termination
Special guidelines for notice of termination might use in cases of mass termination (when a company is terminating 50 or employment more workers at its facility within a four-week duration).
Meaning of "establishment"
An "facility" is a place at which the employer continues company. Separate areas can be considered one facility if either:
- they are located within the same town, or
- a staff member at one location has contractual seniority rights that extend to the other area, enabling the employee to displace another worker (also called "bumping rights").
Effective October 26, 2023, in cases of mass termination, the term "facility" includes an employee's home, however just if the staff member works from home and does not operate at any other area where the company brings on company.
This will need that employees who work specifically from another location be considered for inclusion in the count when identifying whether 50 or more workers have been ended.
Note that where a worker carries out work both from their home and from another area where the employer continues business (for instance, an office), their home is not included in the definition of "facility". Instead, the worker is considered to have a connection to the workplace location and, for that reason, for the purpose of mass termination, the staff member is consisted of with respect to that workplace place.
Example: where numerous places are thought about one "facility"
ABC Company has an office and a warehouse located in London, ON. Sabrina resides in London and works for ABC Company solely from another location: she carries out work for the company from home and does not operate at the office.
For the purpose of mass termination, the business'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 happens, the company should finish and deliver the Form 1 (Notice of termination of employment) to the Director of Employment Standards (Director) by:
- e-mail to esa_form1_notice@ontario.ca.
- fax to (416) 326-7061.
- individual delivery to the Director's workplace on a day and at a time when it is open.
- mail shipment to the Director's office, if the delivery can be confirmed.
The workplace of the Director of Employment Standards is located on the 9th floor, 400 University Avenue, Toronto ON M7A 1T7.
Any notification to the impacted employees is not thought about to have actually been provided up until the Form 1 is received by the Director; to put it simply, notification of mass termination is not reliable till the Director gets the Form 1.
In addition to offering employees with specific notices of termination, the company must, on the first day of the notification period:
- post a copy of the Form 1 offered to the Director in the work environment where it will concern the attention of the affected workers.
- offer a copy of the Form 1 to each affected worker.
The amount of notice workers need to get in a mass termination is not based on the workers' length of work, however on the number of staff members who have been ended. An employer needs to give:
- 8 weeks notice if the work of 50 to 199 staff members is to be ended
- 12 weeks discover if the work of 200 to 499 workers is to be ended
- 16 weeks discover if the work of 500 or more employees is to be terminated
Exception to the mass termination guidelines
The mass termination guidelines do not apply if these two things apply:
- the number of workers whose work is being terminated represents not more than 10 percent of the employees who have actually been employed for at least 3 months at the facility
- none of the terminations are triggered by the irreversible discontinuance of all or part of the company's service at the establishment
Mass termination: resignation by a worker
An employee who has gotten termination notification under the mass termination guidelines who desires to resign before the termination date supplied in the company's notification must give the company a minimum of one week's written notice of resignation if the employee has actually been used for less than 2 years. If the work period has actually been two years or more, the worker should give a minimum of two weeks' written notice of resignation. However, the worker does not need to give notification of resignation if the employer constructively dismisses the worker or breaches a term of the contract.
Temporary work after termination date in notification
A company can provide work to a worker who has actually been notified of termination on a short-lived basis in the 13-week duration after the termination date set out in the notice without impacting the original date of the termination and without being needed to offer any additional notification of termination to the staff member when the short-term work ends.
If an employee works beyond the 13-week period after the termination date and after that has their employment ended, the worker will be entitled to a brand-new composed notification of termination as if the previous notice had never been offered. The staff member's period of employment will then likewise include the duration of temporary 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 work. This right is commonly found in cumulative agreements.
An employee who has recall rights and who is entitled to termination pay since 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
- quit their recall rights and get termination pay (and severance pay, if they were entitled to discontinuance wage).
If a worker is entitled to both termination pay and severance pay, they need to make the very same option for employment both.
If an employee who is not represented by a trade union elects to keep their recall rights or fails to decide, the company should 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 worker who is represented by a trade union elects to keep their recall rights or fails to make a choice, the employer 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 employee. If they can not concern a plan, and the trade union advises the company and the Director of Employment Standards in composing that efforts have failed, the employer must send the termination pay (and severance pay, if any) to the Director employment of Employment Standards, who holds the cash in trust.
If a worker selects to quit their recall rights or if the recall rights end, the cash that is kept in trust must be sent out to the staff member.
If the employee accepts a recall back to work, the cash that is held in trust will be returned to the employer.
Exemptions to observe of termination or termination pay
Much of these exemptions are complex. Please contact the Employment Standards Information Centre, 1-800-531-5551, if you need more info. Please likewise refer to the unique guideline tool.
The notification of termination and termination pay requirements of the ESA do not use to a worker who:
- is guilty of wilful misbehavior, disobedience or wilful neglect of responsibility that is not unimportant and has not been condoned by the employer. Note: "wilful" includes when a worker intended the resulting repercussion or acted recklessly if they understood or ought to have known the impacts their conduct would have. Poor work conduct that is unintentional or unintended is typically not considered wilful;
- was hired for a specific length of time or up until the completion of a specific job. However, such an employee will be entitled to see of termination or termination pay if:- the work ends before the term expires or the task is completed; or
- the term expires or the task is not completed more than 12 months after the work started; or
- the employment continues for 3 months or more after the term ends or the job is completed;
See also: Employment Standards Self-Service Tool
Wrongful dismissal
Rights higher than ESA notification of termination, termination pay, discontinuance wage
The guidelines under the ESA about termination and severance of work are minimum requirements. Some staff members might have rights under the common law that are greater than the rights to observe of termination (or termination pay) and discontinuance wage under the ESA. A worker may wish to sue their former company in court for "wrongful dismissal". Employees need to be aware that they can not take legal action against a company for wrongful termination and sue for termination pay or discontinuance wage with the ministry for the exact same termination or severance of work. An employee must select one or the other. Employees might wish to get legal advice worrying their rights.
