Termination of Employment
Minimum Standards

Introduction
In Ontario, the Employment Standards Act gives most employees guaranteed rights when their employment is terminated. The Act is intended to protect employees who do not negotiate more favourable terms under union contracts or individual employment contracts. An employee is distinct from an independent contractor who simply provides a service to a business or individual for a set fee or agreed price. A federal employee or an employee of a federally regulated industry may, if terminated, seek redress through the provisions of the Canada Labour Code. This page does not deal with situations concerning federal employees or independent contractors. Federal employees should consult with a lawyer for advice.

Employment Standards Act (ESA)
The termination provisions of the ESA do not apply to employees who are laid off and refuse reasonable alternative work, employees who are laid off or terminated as a result of a strike or lockout, persons employed in the construction industry, and persons whose employment is terminated at retirement age as a result of an established company practice. The termination provisions of the ESA do not permit an employer to terminate you because:
• You are pregnant or on parental leave
• You refuse to take a lie detector test
• You refuse to do retail work on Sundays or holidays
• Your wages are subject to garnishment or a Court ordered payment

How Your Job May End
There are several ways in which your job may come to an end and your rights vary accordingly. First, you may quit. In that case, your employer must pay you all wages owing within seven days of your last day of work. These amounts must include all vacation pay owing. Your employer must provide your "Record of Employment". In some cases, there may be a legal duty on an employee to give written notice of termination to the employer. If the employee does not give the required amount of notice, the employer may have a cause of action against the employee, but the employer may not withhold any wages owing to the employee. Secondly, your job may be terminated. According to the ESA, if you have worked for an employer for three months or more, you are generally entitled to notice of when your job will end. The notice must be in writing. If you are not given written notice, you must be paid termination pay, or pay in lieu of notice. Termination pay is a lump sum payment that is equal to the wages you would have been paid during the period of notice that the ESA specifies you receive. Your employee benefits must be continued for the same period. Notice need not be given in the following circumstances:
• The employee was employed for a specific fixed period or a specific job or task where the term or task is completed in less than a year
• The employee was temporarily laid off for less than 13 weeks
• The employee was guilty of willful misconduct or disobedience or willful neglect of duty
• The work has come to an end because of an unforeseen event or circumstance

Severance Pay
Severance Pay is another payment that some employees are entitled to when they lose their jobs. It is a compensation for the years and effort they have put into an employer's business. It is not the same as termination pay. Under the ESA, employees are only entitled to severance pay if:
• They have worked for five or more years for the same employer
• An employer is discontinuing all or part of its business and 50 or more employees will lose their jobs for this reason in six months.

Termination - With Cause
You may be terminated with cause or without cause. Your rights vary with each. To be terminated with just cause means that you are being fired because of some misconduct on your part. For example, if you steal from your employer, willfully damage your employer's
property, or sell trade secrets to his competitor, you have violated your duty to your employer, and are liable to be discharged. In that situation, the employer is not required to give you any notice of termination, although your employer must pay you all wages and vacation pay owing within seven days. If your employer claims to have fired you for just cause and you dispute this, you may have a cause of action against your employer for wrongful dismissal. If that is your situation, you may want to refer to the Law Society's page on Wrongful Dismissal.

Termination - Without Cause
An employer may also terminate your employment without giving any reason or without just cause. In that case, your employer may have to give you notice while you continue to work until the end of this notice at full pay or termination pay. You should note, your employer does not have to give a reason for termination. The Employment Standards Act sets out the minimum notice requirements. If you have worked less than three consecutive months, no notice is required. If you work for three or more months, but less than one year, you are entitled to one weeks notice, if you work for one year or more, but less than three years, you are entitled to two weeks notice. You are entitled to one week's notice for every year you worked up to eight years. For example, if you worked for an employer for five years, you would be entitled to five weeks notice. However, if you worked for an employer for more than eight years, you would still only be entitled to eight weeks notice.

Note: These are minimums set by Provincial legislation. The law does provides for longer periods of notice depending on the type of job, your age, the availability of similar employment, and your experience and qualifications. If you are not satisfied with the notice given in your case, you may decide to sue your employer for wrongful dismissal. If your employer gives you notice, it must be in writing, and the period of notice cannot coincide with your annual vacation. However, if you agree to take your vacation during this period of notice that is acceptable under the Act. If your employer wants you to leave the job immediately your employer may, instead of giving you written notice, give you termination pay equal to the amount of notice to which you would have been entitled and any outstanding vacation pay no later than seven days after termination. Your employer will have to decide if he or she wishes to pay you more than the minimums provided by legislation in accordance with decisions reached by the Courts of Ontario. If you are not given notice on termination or termination pay, as required under the Act, the employer is guilty of an offence and liable to a fine of up to $50,000, six months in jail, or both. If the employer refuses to pay, contact your local Employment Standards Branch at the Ministry of Labour. Their staff has the authority to collect the amounts outstanding. Even if your employer has shut down the business or has declared bankruptcy, you should still contact the Employment Standards Office. A new program called "Employee Wage Protection Program" has monies available to satisfy wage claims in these circumstances and it is administered by the Employment Standards Branch.

Exceptions
It should be noted that the Act does not require notices of termination in specific circumstances. For instance, if you were laid off after you were offered and refused reasonable, comparable, alternate work by your employer, you would not be entitled to notice. Also, if you have been employed for a definite period of time that lasted less than one year, no notice is required. However, if you were employed for a definite period and then continued to work for three or more months after the period expired, you would be entitled to notice. If you are put on temporary lay-off status, and are not called back to work within the time limits set out in the Act (generally thirteen weeks), then you may be deemed to have had your employment terminated. In such cases, the employee is deemed to have been terminated at the time that the employee was temporarily laid off, and is entitled to receive any severance or termination pay owing at that time. If you have been temporarily laid-off, recalled and temporarily laid-off again, you may also be protected. If the overall amount of time that you have been laid-off adds up to at least thirty-five weeks out of the last fifty-two weeks, you are entitled to termination pay. However, if you have a right to be recalled, you must choose between keeping your right to be recalled and accepting termination pay. If you accept termination pay, you will lose your right to be recalled.

Protection for the Employee
Finally, there are several other employee protections to be aware of:
• If your employer substantially alters a condition of your employment and it is evident that the purpose of that alteration was to encourage you to quit, that may amount to a termination of your job, in which case your employer may be required to cease that conduct, or pay you any termination pay owing. You should consult a lawyer in these circumstances to help you understand if your rights have been violated.
• Once you have been given notice of termination, your employer may not change your wage rate, or any other term or condition of your employment, unless you consent. In particular, the employer must continue to pay for benefits under plans in force during the time you were employed. For instance, if payments were being made into a pension plan, these must continue during the notice period.
• As mentioned earlier, you may be entitled to an additional payment known as severance pay. It is to be paid in addition to any termination pay to which you are entitled. Where your employment is terminated as part of a full or partial plant closing involving fifty or more people severance pay will be paid to an employee who:
• Is terminated as the result of a strike or lockout, unless the employer can prove the termination was caused by the economic consequences of a lockout (Note: In view of the rights of workers to return to work within six months of a strike, and the prohibition of the hiring of replacement workers, terminations because of strikes or lockouts are infrequent.)
• Retires on a reduced pension
• Is terminated as a result of events of a fortuitous or unforeseen nature
• Cannot work because of illness or injury
• Is bumped by a more senior employee
• Receives notice of termination but dies before employment ends.

However, you should note that there are some exceptions. For example, if you work in the construction industry or if you retire on a full pension, you will not get severance pay. An employee is also not entitled to severance pay if the employee refuses an offer of reasonable alternate employment from the employer or if the employee refuses to exercise seniority or bumping rights. An employee who was terminated for misconduct, disobedience or neglect of duty also loses any severance pay. As does an employee who having been terminated, returns and receives an actuarial non-reducing pension. If you are entitled to severance pay, you will receive one week's salary for every year worked for the employer up to twenty-six weeks. Partial years are also recognized. For example, an employee with seven years and six months employment would be entitled to seven and one half weeks severance pay. Finally, the Employment Standards Act states an employee cannot be dismissed or laid off for refusing to work on Sunday or another holiday. In addition, if the employer is ordered to pay on a court order (e.g. via garnishment or family support order), this cannot
be considered a valid ground for dismissing an employee.

Summary
The Ministry of Labour provides numerous Fact Sheets on Employment Standards that explore these issues by job category. If you have any further questions about termination of employment, you should contact your local Employment Standards office, a lawyer or your local community legal clinic.

Revision Date: November 1, 1999

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