Termination of Employment
Termination of Employment Defined
A number of expressions are commonly used to describe situations when
employment is terminated. These include "let go," "discharged,"
"dismissed," "fired" and "permanently laid off."
Under the Employment
Standards Act, 2000 (ESA)
a person's employment is terminated if the employer:
dismisses or stops employing an employee, including an employee who is
no longer employed due to the bankruptcy or insolvency of the
employee and the employee resigns, in response, within a reasonable
lays an employee off for a period that is
longer than a "temporary
In most cases, when an employer ends the
employment of an employee who has been continuously employed for three
months, the employer must provide the employee with either
written notice of termination, termination pay or a combination (as
long as the notice and the termination pay together equal the length of
notice the employee is entitled to receive).
The ESA does
not require an employer to give an employee a reason why his or her
employment is being terminated. There are, however, some situations where
an employer cannot terminate
an employee's employment even if the employer is prepared to give proper
written notice or termination pay. For example, an employer cannot end
someone's employment, or penalize them in any way, if any part of the
reason for the termination of employment is based on the employee asking
questions about the ESA or
exercising 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 absence specified in the ESA.
Please see the chapter on Reprisals.
Qualifying for Termination Notice or Pay in Lieu
Certain employees are not entitled to notice of
termination or termination pay under the ESA.
Examples include: employees who are guilty of wilful misconduct,
disobedience, or wilful neglect of duty that is not trivial and has not
been condoned by the employer. Other examples include construction
employees, employees on temporary layoff, employees who refuse an offer of
reasonable alternative employment and employees who have been employed
less than three months.
There are a number
of other exemptions to the termination of employment provisions of the ESA.
to Notice of Termination or Termination Pay.”
Please also refer to the Special
termination-of-employment rules are entirely separate from any
entitlements an employee may have to be paid severance
See also: Termination
A constructive dismissal may occur when an employer makes a significant
change to a fundamental term or condition of an employee's employment
without the employee's actual or implied consent.
For example, an employee may be constructively dismissed if the employer
makes changes to the employee's terms and conditions of employment that
result in a significant reduction in salary or a significant change in
such things as the employee's work location, hours of work, authority, or
position. Constructive dismissal may also include situations where an
employer harasses or abuses an employee, or an employer gives an employee
an ultimatum to "quit or be fired" and the employee resigns in response.
The employee would have to resign in response
to the significant change within a reasonable period of time in order for
the employer's actions to be considered a termination of employment for
purposes of the ESA.
Constructive dismissal is a complex and difficult subject. For more
information on constructive dismissal please contact the Employment
Standards Information Centre, 1-800-531-5551.
An employee is on temporary layoff when an
employer cuts back or stops the employee's work without ending his or her
laying someone off at times when there is not enough work to do). An
employer may put an employee on a temporary layoff without specifying a
date on which the employee will be recalled to work.
For the purposes of the termination provisions
of the ESA,
a "week of layoff" is a week in which the employee earned less than half
of what he or she would ordinarily earn (or earns on average) in a week.
A week of layoff does not include any week in which the employee did not
work for one or more days because the employee was not able or available
to work, was subject to disciplinary suspension, or was not provided with
work because of a strike or lockout.
Employers are not required under the ESA to
provide employees with a written notice of a temporary layoff, nor do they
have to produce a reason. They may, however, be required to do these
things under a collective agreement or an employment contract.
Under the ESA,
a “temporary layoff” can last:
not more than 13 weeks of layoff in any
period of 20 consecutive weeks;
more than 13 weeks in any period of 20
consecutive weeks, but less than 35 weeks of layoff in any period of
52 consecutive weeks, where:
the employee continues to receive
substantial payments from the employer;
the employer continues to make payments
for the benefit of the employee under a legitimate group or
employee insurance plan (such as a medical or drug insurance plan)
or a legitimate retirement or pension plan;
the employee receives supplementary
the employee would be entitled to
receive supplementary unemployment benefits but isn't receiving
them because he or she is employed elsewhere;
the employer recalls the employee to
work within the time frame approved by the Director of Employment
the employer recalls the employee
within the time frame set out in an agreement with an employee who
is not represented by a trade union;
a layoff longer than a layoff described in 'B' where the employer
recalls an employee who is represented by a trade union within the
time set out in an agreement between the union and the employer.
If an employee is laid off for a period longer than a temporary layoff as
set out above, the employer is considered to have terminated the
employee's employment. Generally, the employee will then be entitled to
Written Notice of Termination and Termination Pay
Under the ESA:
an employer can terminate the employment of
an employee who has been employed continuously for three months or
more if the employer has given the employee proper written
notice of termination and the notice
period has expired;
an employer can terminate the employment of
an employee without written
notice or with less notice
than is required if the employer pays termination
pay to the employee.
Written Notice of Termination
When an employee is terminated, the written
notice required under the ESA is
generally determined by how long someone has been employed by an employer.
Notice of termination of employment, once given, cannot be withdrawn
without the consent of the employee.
The following chart specifies the periods of statutory notice required.
Length of Employment
Less than 3 months
3 months but less than 1 year
1 year but less than 3 years
3 years but less than 4 years
4 years but less than 5 years
5 years but less than 6 years
6 years but less than 7 years
7 years but less than 8 years
8 years or more
Note: Special rules
determine the amount of notice required in the case of mass
terminations - where
50 or more employees are terminated at an employer's establishment within
a four-week period.
Requirements During the Statutory Notice Period
During the statutory notice period, an employer must:
not reduce the employee's wage rate or alter a term or condition of
continue to make whatever contributions would be required to maintain
the employee's benefits plans; and
pay the employee the wages he or she is
entitled to, which cannot be less than the employee'sregular
wages for a regular
work week each week.
This is an employee's rate of pay for each non-overtime hour of work in
the employee's work week.
These are wages other than overtime pay, vacation pay, public holiday pay,
premium pay, termination pay and severance pay and certain contractual
Regular Work Week
For an employee who usually works the same number of hours every week, a
regular work week is a week of that many hours, not including overtime
Some employees do not have a regular work week. That is, they do not work
the same number of hours every week or they are paid on a basis other than
time. For these employees, the "regular wages" for a "regular work week"
is the average amount of the regular wages earned by the employee in the
12 weeks in which the employee worked immediately preceding the date the
notice was given.
An employer is not allowed to reduce an
employee's entitlement to wages by scheduling an employee's vacation time
during the statutory notice period unless the employee--after receiving
written notice of termination of employment--agrees to take his or her
vacation time during the notice period.
If an employer provides longer notice than is required, the statutory part
of the notice period is the last part of the period that ends on the date
How to Provide Written Notice
In most cases, written notice of termination of employment must be
addressed to the employee. It can be provided in person or by mail, fax or
e-mail, as long as delivery can be verified.
There are special rules for providing notice of termination if an employee
has a contract of employment or a collective agreement that provides
seniority rights, allowing an employee who is laid off or terminated to
displace ("bump") other employees.
In that case, the employer must post a notice
in the workplace (where it will be seen by the employees) setting out the
names, seniority and job classification of those employees the employer
intends 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 posting, to an employee who is named in the notice. However, this
notice of termination must still meet the length requirements set out in
If an employee exercises his or her bumping rights, the posting of the
notice will be considered to be notice of termination, as of the date of
the posting, to any employee "bumped" out of his or her job by the
employee named in the notice.
There are also
special rules regarding how notice is provided when there is a mass
An employee who does not receive the written
notice required under the ESA must
be given termination pay in lieu of notice. Termination pay is a lump sum
payment equal to the regular
wages for a regular
work week that an employee would otherwise
have been entitled to during the written notice period. An employee earns
vacation pay on his or her termination pay. Employers must also continue
to make whatever contributions would be required to maintain the benefits
the employee would have been entitled to had he or she continued to be
employed through the notice period.
Regular work week
Sarah has worked for three and a half
years. Now her job has been eliminated and her employment has been
terminated. Sarah was not given any written notice of termination.
Sarah worked 40 hours a week every week and was paid $12.00 an hour.
She also received four per cent vacation 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 wages for a regular work week are calculated:
$12.00 an hour × 40 hours a week = $480.00 a week
Her termination pay is calculated:
$480.00 × 3 weeks = $1,440.00
Then her vacation pay on her termination pay is calculated:
4% of $1,440.00 = $57.60
Finally, her vacation pay is added to her termination pay:
$1,440.00 + $57.60 = $1,497.60
Result: Sarah is entitled to $1,497.60.
No regular work week
Gerry has worked at a nursing home for four
years. He works every week, but his hours vary from week to week. His
rate of pay is $12.00 an hour, and he is paid six per cent vacation
Gerry's employer eliminated his position and did not give Gerry any
written notice of termination. Gerry was ill and off work for two of
the 12 weeks immediately preceding the day his employment was
terminated. Gerry earned $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 per week are calculated:
$1,800.00 for 12 weeks ÷ 10 weeks (Gerry was off sick for two
weeks therefore these weeks are not included in the
calculation) = $180.00 a week
His termination pay is calculated:
$180.00 × 4 weeks = $720.00
Then his vacation pay on his termination pay is calculated:
6% of $720.00 = $43.20
Finally, his vacation pay is added to his termination pay:
$720.00 + $43.20 = $763.20
Result: Gerry is entitled to $763.20.
When to Pay Termination Pay
Termination pay must be paid to an employee either seven
days after the employee is terminated or on the employee's next regular
pay date, whichever is later.
Special rules for notice of termination may apply when the employment of
50 or more employees is terminated at an employer's establishment within a
four-week period. This is often referred to as mass termination. (Note: an
"establishment" can, in some circumstances, include more than one
When a mass
termination occurs, the employer must submit the Form
1 (Notice of
Termination of Employment) to the Director of Employment Standards before giving
notice to the affected employees. Notice of mass termination is not
considered to be effective until the employer submits this form.
In addition to providing employees with individual notices of termination,
the employer must post a copy of the Form 1 provided to the Director of
Employment Standards in the workplace where it will come to the attention
of the employees it affects on the first day of the notice period.
The amount of notice employees must receive in a mass termination is not
based on the employees' length of employment, but on the number of
employees who have been terminated. An employer must give:
8 weeks' notice if the employment of 50 to 199 employees is to be
12 weeks' notice if the employment of 200 to 499 employees is to be
16 weeks' notice if the employment of 500 or more employees is to be
Exception to the Mass-Termination Rules
The mass-termination rules do not apply if:
The number of employees whose employment is
being terminated represents not more than 10 per cent of the employees
who have been employed for at least three months at the establishment,
None of the terminations are caused by the permanent discontinuance of
all or part of the employer's business at the establishment.
Mass Termination: Resignation by an Employee
An employee who has received termination notice under the mass termination
rules may wish to resign before the termination date provided in the
In this case, the employee must give the employer at least one week's
written notice of resignation if the employee has been employed for less
than two years. If the employment period has been two years or more, the
employee must give at least two weeks' written notice of resignation.
An employee does not have to give notice of resignation if the employer
constructively dismisses the employee or breaches a term of the contract.
Temporary Work After Termination
An employee can work for the employer on a
temporary basis in the 13-week period after his
or her employment has been terminated without affecting the original date
of the termination. When the temporary work has ended, the employer is not
required to provide any further notice of termination to the employee.
If an employee works beyond the
13-week period after the termination date, the employee becomes entitled
to written notice of termination as if it had never been given. The
employee's period of employment will then also include the period of
A "recall right" is the right of an employee on a layoff to be called back
to work by his or her employer under a term or condition of employment.
This right is commonly found in a collective agreement.
An employee who has recall rights and who is entitled to termination pay
because of a layoff of 35 weeks or more may choose to:
keep his or her recall rights and not be paid termination pay at that
give up his or her recall rights and receive termination pay.
If an employee is entitled to both termination pay and severance pay, he
or she must make the same choice for both.
If an employee who is
not represented by a trade union elects to
keep his or her recall rights or fails to make a choice, the employer must
send the amount of the termination pay (and severance pay, if any) to the
Director of Employment Standards, who holds the money in trust.
If an employee who is represented
by a trade union elects to keep his or her recall rights or fails to make
a choice, the employer and the trade union must try to come to an
arrangement to hold the termination pay (and severance pay, if any) in
trust for the employee. If they cannot come to an arrangement, the
employer must send the termination pay (and severance pay, if any) to the
Director of Employment Standards, who holds the money in trust.
If an employee chooses to give up his or her recall rights or if the
recall rights expire, the money that is held in trust must be sent to the
If the employee accepts a recall back to work, the money that is held in
trust will be returned to the employer.
Exemptions to Notice of Termination or Termination Pay
Many of these exemptions are complex. Please contact the Employment
Standards Information Centre, 1-800-531-5551, if you need more
The notice of termination and termination pay
requirements of the ESA do
not apply to an employee who:
is guilty of wilful misconduct,
disobedience or wilful neglect of duty that is not trivial and has not
been condoned by the employer. Note: "wilful" includes when an
employee intended the resulting consequence or acted recklessly
knowing the effects their conduct would have. Poor work conduct that
is accidental or involuntary is generally not considered wilful.
is employed to
provide professional services, personal support services or homemaking
services as defined in the Long-Term Care Act, 1994 for an employer
who has a contract to provide those services with a community care
access corporation within the meaning of the Community
Care Access Corporations Act, 2001 ,
if the employee’s arrangement with the employer allows the employee to
elect to work or not to work when requested to do so by the employer;
was hired for a specific length of time or
to do a specific task. However, such an employee will be entitled to
notice of termination or termination pay if:
the employment ends before the term expires or the task is
the term expires or the task is not completed more than 12 months
after the employment started; or
the employment continues for three months or more after the term
expires or the task is completed.
is employed in construction, this includes employees who are doing
off-site work in whole or in part who are commonly associated in work
or collective bargaining with employees who work at the construction
builds, alters or repairs certain types of ships
has his or her employment terminated when
he or she reaches the age of retirement in accordance with the
employer's established practice, but only if the termination would not
contravene the Human
has refused an offer of reasonable alternative employment with the
has refused to exercise his or her right to another position that is
available under a seniority system. This usually means the employee
gives up the right to displace or "bump" another employee in order to
is on a temporary lay-off
does not return to work within a reasonable time after being recalled
to work from a temporary layoff;
is terminated during or as a result of a strike or lockout at the
has lost his or her employment because the contract of employment is
impossible to perform or has been frustrated by an unexpected or
unforeseen event or circumstance, such as a fire or flood, that makes
it impossible for the employer to keep the employee working. (This
does not include bankruptcy or insolvency or when the contract is
frustrated or impossible to perform as the result of an injury or
illness suffered by an employee.)
See also: Termination
The rules under the ESA about
termination and severance of employment are minimum requirements. An
employee may choose instead to sue an employer in a court of law for
"wrongful dismissal." An employee cannot sue an employer for wrongful
dismissal and file
a claim for termination pay or severance pay with the ministry for the
same termination or severance of employment. The employee must choose one
or the other and may wish to obtain legal advice concerning their rights.
Greater Right to Termination Notice, Pay in Lieu, and Severance
The ESA provides
minimum standards only. Some employees may have rights under the common
law or other legislation that give them greater rights relating to notice
of termination (or termination pay) and severance pay than the ESA.
Employers and employees may wish to obtain legal advice concerning their