A variety of expressions are typically used to describe situations when work is terminated. These consist of "release," "discharged," "dismissed," "fired" and "permanently laid off."
Under the Employment Standards Act, 2000 (ESA) a person's work is terminated if the company:
- dismisses or stops utilizing a worker, consisting of where an employee is no longer employed due to the bankruptcy or insolvency of the company;
- "constructively" dismisses a worker and the staff member resigns, in action, within an affordable time;
- lays an employee off for a period that is longer than a "short-term layoff".
Most of the times, when an employer ends the work of a worker who has actually been continuously used for 3 months, the employer must offer the worker with either composed notification 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 notice the staff member is entitled to receive).
The ESA does not need a company to provide a worker a reason that their employment is being terminated. There are, nevertheless, 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 instance, a company can not end someone's employment, or penalize them in any other way, if any part of the reason for the termination of work is based on the staff member asking questions 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 maximums, or taking a leave of lack defined in the ESA. Please see the chapter on reprisals.
Qualifying for termination notice or pay in lieu
Certain staff members are not entitled to see of termination or termination pay under the ESA. Examples include: employees who are guilty of wilful misbehavior, disobedience, or wilful disregard of task that is not minor and has actually not been excused by the company. Other examples consist of building and construction staff members, employees on short-lived layoff, employees who refuse a deal of reasonable alternative work and employees who have actually been employed less than three months.
There are a variety of other exemptions to the termination of employment arrangements of the ESA. See "Exemptions to discover of termination or termination pay." Please likewise describe the unique guideline tool.
The termination-of-employment rules are totally different from any privileges an employee might need to be paid severance pay under the ESA.
Constructive dismissal
A useful termination might occur when a company makes a considerable modification to a basic term or condition of an employee's employment without the employee's actual or implied authorization.
For instance, an employee might be constructively dismissed if the employer makes changes to the worker's terms and conditions of work that result in a significant decrease in salary or a significant unfavorable modification in such things as the staff member's work area, hours of work, authority, or position. Constructive termination might also include situations where a company pesters or abuses a worker, or a company offers a staff member an ultimatum to "stop or be fired" and the employee resigns in action.
The employee would need to resign in reaction to the modification within a reasonable period of time in order for the employer's actions to be thought about a termination of work for purposes of the ESA.
Constructive dismissal is a complex and difficult subject. To learn more on constructive dismissal, please contact the Employment Standards Information Centre at 1-800-531-5551.
Temporary layoff
An employee is on momentary layoff when an employer cuts down or stops the worker's work without ending their work (for instance, laying somebody off sometimes when there is not sufficient work to do). The simple fact that the employer does not define a recall date when laying the worker off does not necessarily imply that the lay-off is not temporary. Note, however, that a lay-off, even if intended to be short-term, may lead to useful termination 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 staff member made less than half of what they would generally 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 one or more days due to the fact that the worker was not able or offered to work, went through disciplinary suspension, or was not offered with work since of a strike or lockout at their location of employment or somewhere else.
Employers are not needed under the ESA to offer workers with a composed notification of a temporary 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 arrangement or a work 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 successive weeks, but less than 35 weeks of layoff in any duration of 52 successive weeks, where:- the employee continues to receive substantial payments from the company;
or
- the company continues to pay for the advantage of the worker under a genuine group or employee insurance strategy (such as a medical or drug insurance plan) or a genuine retirement or pension plan;
or
- the staff member receives supplemental welfare;
or
- the employee would be entitled to receive supplementary welfare however isn't getting them due to the fact that they are employed elsewhere;
or
- the employer recalls the worker to work within the time frame authorized by the Director of Employment Standards;
or
- the employer recalls the worker within the time frame set out in an arrangement with a staff member who is not represented by a trade union;
or
3. a layoff longer than a layoff explained in 'B' where the employer remembers a worker who is represented by a trade union within the time set out in a contract between the union and the employer.
If a worker is laid off for a period longer than a short-term layoff as set out above, the company is considered to have actually ended the employee's work. Generally, the employee will then be entitled to termination pay.
Written notice of termination and termination pay
Under the ESA, an employer can end the work of an employee who has actually been utilized continuously for three months or more if either:
- the employer has actually offered the worker appropriate written notification of termination and the notification duration has ended
- the company pays termination pay to the worker where no written notification or less notification than is needed is provided
Written notice of termination
An employee is entitled to discover of termination (or termination pay rather of notice) if they have been constantly used for a minimum of 3 months. A person is thought about "utilized" not just while they are actively working, but also during whenever in which they are not working but the employment relationship still exists (for example, time in which the employee is off ill or on leave or on lay-off).
The amount of notification to which a worker is entitled depends on their "period of work". A staff member's duration of employment includes not only perpetuity while the worker is actively working however 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 short-term lay-off, the staff member's employment is considered (or thought about) to have been ended on the very first day of the lay-off-any time after that does not count as part of the employee's period of work, even though the staff member might still be employed for functions of the "constantly utilized for three 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 circumstances, for an individual to have been "constantly employed" for 3 months or more and yet have a period of employment of less than 3 months. In such situations, the staff member would be entitled to observe because an employee who has been constantly utilized for at least 3 months is entitled to discover, and the minimum notice entitlement of one week applies to an employee with a period of employment of any length less than one year.
The following chart specifies the amount of notification required:
Note: Special guidelines determine the quantity of notification required when it comes to mass terminations - where the employment of 50 or more workers is ended at a company's facility within a four-week period.
Requirements throughout the statutory notice period
During the statutory notice period, a company needs to:
- not decrease the worker's wage rate or modify any other term or condition of work;
- continue to make whatever contributions would be needed to keep the worker's advantages strategies; and
- pay the worker the incomes they are entitled to, which can not be less than the staff member's routine incomes for a regular work week every week.
Regular rate
This is a worker's rate of spend for each non-overtime hour of operate in the employee's work week.
Regular wages
These are salaries aside from overtime pay, trip pay, public holiday pay, premium pay, domestic or sexual violence leave pay, termination of task pay, termination pay and severance pay and certain contractual privileges.
Regular work week
For a staff member who normally works the exact same number of hours every week, a regular work week is a week of that numerous hours, not including overtime hours.
Some workers do not have a regular work week. That is, they do not work the exact same variety of hours every week or they are paid on a basis other than time. For these workers, the "regular incomes" for a "routine work week" is the typical quantity of the regular wages earned by the worker in the weeks in which the employee worked throughout the period of 12 weeks immediately preceding the date the notice was given.
An employer is not permitted to arrange a worker's trip time throughout the statutory notice period unless the employee-after getting composed notice of termination of employment-agrees to take their getaway time throughout the notice period.
If an employer supplies longer notification than is needed, the statutory part of the notification duration is the tail end of the duration that ends on the date of termination.
How to supply written notification
Most of the times, written notice of termination of work need to be dealt with to the worker. It can be supplied in person or by mail, fax or e-mail, as long as shipment can be validated.
There are unique guidelines for offering notification of termination if an employee has a contract of employment or a collective agreement that provides seniority rights that permit an employee who is to be laid off or whose employment is to be ended to displace (" bump") other staff members.
Because case, the employer needs to publish a notice in the office (where it will be seen by the workers) setting out the names, seniority and task category of those employees the employer means to end and the date of the proposed termination. The publishing of the notice is thought about to be notification of termination, as of the date of the posting, to a staff member who is "bumped" by a staff member named in the notice. However, this notification of termination must still fulfill the length requirements set out in the ESA.
There are also unique rules concerning how notice is supplied when there is a mass termination.
Termination pay
An employee who does not get the written notice needed under the ESA should be provided termination pay in lieu of notice. Termination pay is a lump amount payment equivalent to the routine salaries for a regular work week that an employee would otherwise have been entitled to throughout the composed notification period. A staff member makes vacation pay on their termination pay. Employers need to also continue to make whatever contributions would be required to keep the advantages the worker would have been entitled to had they continued to be used through the notice duration.
Example: Regular work week
Sarah has actually worked for three and a half years. Now her job has actually been removed and her employment has actually been ended. Sarah was not provided any written notification of termination.
Sarah worked 40 hours a week weekly and was paid $20.00 an hour. She likewise got four per cent holiday pay. Because she worked for more than three years but less than four years, she is entitled to three weeks' pay in lieu of notice.
Sarah's regular incomes for a regular work week are computed:
$ 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 trip pay on her termination pay is calculated:
4% of $2,400.00 = $96.00
Finally, her getaway pay is contributed 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 coverage for any benefit or pension strategies that used to her for three weeks.
Example: No routine work week
Gerry has operated at a nursing home for 4 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 trip pay.
Gerry's company eliminated his position and did not give Gerry any composed notice of termination. Gerry was ill and off work for two of the 12 weeks instantly preceding the day his employment was terminated. Gerry made $1,800.00 in the 12 weeks before the day on which his work ended.
Gerry is entitled to 4 weeks of termination pay.
Gerry's average revenues per week are determined:
$ 1,800.00 for 12 weeks/ 10 weeks (Gerry was off ill for 2 weeks therefore these weeks are not included in the computation of average incomes) = $180.00 a week
His termination pay is computed:
$ 180.00 × 4 weeks = $720.00
Then his trip pay on his termination pay is determined:
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 must also guarantee ongoing coverage for any advantage or pension plans that used to him for 4 weeks.
When to pay termination pay
Termination pay need to be paid to a worker either 7 days after the staff member's work is terminated or on the employee's next regular pay date, whichever is later.
Mass termination
Special guidelines for notice of termination might use in cases of mass termination (when an employer is ending 50 or more employees at its establishment within a four-week duration).
Meaning of "establishment"
An "facility" is a place at which the company continues organization. Separate places can be thought about one facility if either:
- they are situated within the very same town, or
- an employee at one location has contractual seniority rights that extend to the other area, allowing the worker to displace another staff member (likewise called "bumping rights").
Effective October 26, 2023, in cases of mass termination, the term "facility" includes a staff member's home, however only if the staff member works from home and does not work at any other location where the company brings on company.
This will need that employees who work specifically remotely be considered for addition in the count when determining whether 50 or more staff members have been ended.
Note that where a worker carries out work both from their home and from another place where the company brings on organization (for example, an office), their home is not consisted of in the meaning of "establishment". Instead, the staff member is considered to have a connection to the office location and, therefore, for the function of mass termination, the staff member is consisted of with regard to that office area.
Example: where multiple areas are thought about one "establishment"
ABC Company has a workplace and a warehouse located in London, ON. Sabrina lives in London and works for ABC Company solely from another location: she carries out work for the company from home and does not work at the workplace.
For the function of mass termination, the business's London workplace, London storage facility and Sabrina's London home are thought about one "facility."
Employer obligations in a mass termination
When a mass termination takes place, the employer should finish 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.
- individual 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 delivery can be confirmed.
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 not considered to have actually been provided till the Form 1 is gotten by the Director; to put it simply, notification of mass termination is ineffective up until the Director gets the Form 1.
In addition to offering workers with specific notices of termination, the company must, on the very first day of the notification period:
- post a copy of the Form 1 supplied to the Director in the office where it will come to the attention of the impacted workers.
- supply a copy of the Form 1 to each affected worker.
The quantity of notification staff members must receive in a mass termination is not based upon the employees' length of employment, but on the variety of employees who have actually been ended. An employer must offer:
- 8 weeks notice if the employment of 50 to 199 staff members is to be terminated
- 12 weeks see if the work of 200 to 499 employees is to be terminated
- 16 weeks see if the employment of 500 or more staff members is to be terminated
Exception to the mass termination rules
The mass termination rules do not use if these 2 things apply:
- the variety of employees whose employment is being terminated represents not more than 10 percent of the workers who have been utilized for a minimum of 3 months at the facility
- none of the terminations are brought on by the permanent discontinuance of all or part of the employer's company at the establishment
Mass termination: resignation by an employee
An employee who has actually gotten termination notice under the mass termination guidelines who wants to resign before the termination date offered in the company's notification must offer the company at least one week's composed notice of resignation if the worker has been used for less than two years. If the work duration has been 2 years or more, the employee must give at least two weeks' composed notification of resignation. However, the employee does not have to offer notice of resignation if the company constructively dismisses the staff member or breaches a term of the agreement.
Temporary work after termination date in notice
A company can offer work to a staff member who has been provided notice of termination on a short-term basis in the 13-week duration after the termination date set out in the notification without affecting the original date of the termination and without being required to supply any further notification of termination to the worker when the short-lived work ends.
If a staff member works beyond the 13-week period after the termination date and then has their work ended, the worker will be entitled to a new composed notice of termination as if the previous notice had actually never ever been given. The staff member's duration of employment will then also include the period of momentary work.
Recall rights
A "recall right" is the right of an employee on a layoff to be recalled to work by their company under a term or condition of work. This right is frequently discovered in cumulative arrangements.
A worker who has recall rights and who is entitled to termination pay since of a layoff of 35 weeks or more may pick 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
- provide 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 discontinuance wage, they need to make the same choice for both.
If an employee who is not represented by a trade union elects to keep their recall rights or fails to make a choice, the employer needs to send the quantity of the termination pay (and severance pay, 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 a plan to hold the termination pay (and severance pay, if any) in trust for the staff member. If they can not pertain to an arrangement, and the trade union advises the company and the Director of Employment Standards in writing that efforts have actually failed, the employer 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 provide up their recall rights or if the recall rights end, the money that is kept in trust needs to be sent out to the staff member.
If the staff member accepts a recall back to work, the money that is kept in trust will be gone back to the company.
Exemptions to notice of termination or termination pay
A lot of these exemptions are complex. Please call the Employment Standards Information Centre, 1-800-531-5551, if you need more info. Please likewise describe the special guideline tool.
The notice of termination and termination pay requirements of the ESA do not apply to an employee who:
- is guilty of wilful misbehavior, disobedience or wilful disregard of task that is not insignificant and has not been condoned by the company. Note: "wilful" consists of when a staff member meant the resulting effect or acted recklessly if they knew or ought to have known the effects their conduct would have. Poor work conduct that is accidental or unintentional is generally not thought about wilful;
- was hired for a specific length of time or until the completion of a specific task. However, employment such a worker will be entitled to observe of termination or termination pay if:- the work ends before the term expires or the task is completed; or
- the term ends or the job is not completed more than 12 months after the work began; or
- the work continues for 3 months or more after the term expires or the task is completed;
See likewise: Employment Standards Self-Service Tool
Wrongful termination
Rights greater than ESA notice of termination, termination pay, discontinuance wage
The guidelines under the ESA about termination and severance of employment are minimum requirements. Some staff members might have rights under the common law that are higher than the rights to see of termination (or termination pay) and discontinuance wage under the ESA. A worker might wish to sue their former company in court for "wrongful termination". Employees should be conscious that they can not sue an employer for wrongful dismissal and sue for termination pay or discontinuance wage with the ministry for the same termination or severance of employment. A worker needs to select one or the other. Employees might want to acquire legal guidance concerning their rights.
