An employee who is terminated is eligible for compensation based on the following formula:
A week's pay is calculated by totalling the employee's wages, excluding overtime, earned in the last 8 weeks in which the employee worked normal hours, and dividing this amount by 8.
An employee's period of continuous employment is not interrupted by the sale, lease or transfer of a business.
No compensation is required if an employer gives an employee advance written notice of termination which is equal in weeks to the number of weeks' pay for which the employee is eligible.
An employer may also give an employee a combination of notice and compensation equal to the weeks' pay for which the employee is eligible.
An employee cannot be on vacation, leave, strike or lockout, or be unavailable for work due to medical reasons during the notice period. If employment continues after the notice period ends, the notice is of no effect. Once notice has been given, the employer may not alter any condition of employment, including the wage rate, without the employee's written consent.
An employer is not required to give notice of termination or pay compensation on termination if:
If a definite term or specific work is extended for at least 3 months past its scheduled completion, the definite term and specific work exceptions described above would not apply.
An employer is not required to give notice of termination or pay compensation if an employee is laid off temporarily.
A temporary layoff becomes a termination when:
A week of layoff is a week in which an employee earns less than 50% of the his or her weekly wages at the regular rate, averaged over the previous 8 weeks.
When a temporary layoff becomes a termination, the date of layoff becomes the termination date and the employee becomes entitled to compensation as described above.
A layoff other than a temporary layoff is considered a termination.
If an employer substantially alters a condition of employment, the Branch may determine that an employee's employment has been terminated. If the Branch makes such a determination, the termination provisions of the Act apply.
Where an employer intends to terminate 50 or more employees at a single location within 2 months, the employer must give written notice of group termination to each employee affected. The employer must also notify the Minister of Labour, and any trade union which represents the employees. The length of notice depends on the number of employees to be laid off. If notice is not given or is shorter than required, termination pay in lieu of the deficient portion of the notice must be paid. Group termination requirements are in addition to individual termination requirements, and the two notice periods may not coincide. For further information, please refer to Part 8 of the Act.
Variations of the individual and group termination provisions apply to employees covered by collective agreements. For further information, please refer to Part 8 of the Act.
Employers and employees should be aware that other laws, including the Human Rights Act and the common law regarding termination and wrongful dismissal, may apply to a particular termination even in cases where no compensation or notice is required under the Employment Standards Act.
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