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Layoffs and Termination

There are rules employers and employees must follow when laying off individual employees or terminating their employment.  There are additional rules that an employer must follow if there is a group termination.

Layoff means the temporary interruption by an employer of the services of an employee for a period exceeding six consecutive work days.

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1. Notice Periods

Employees must be provided with written notice when being laid off or terminated.  Where no notice is provided, employers must provide pay instead of notice equal to the amount of notice the employee is entitled to. The minimum amount of notice is based on how long an employee has been working. 

Employee's Period of Employment*  Minimum Period of Working Notice
more than 13 consecutive weeks but one year or less  one week
more than one year but three years or less  two weeks
more than three years but five years or less four weeks
more than five years but 10 years or less six weeks
more than 10 years eight weeks

* Periods of employment are defined as any period of employment that is not interrupted by more than 14 consecutive days of employment.

Note: If you are laid off for more than 14 consecutive days and return to work with the same employer, your period of employment restarts at zero.

Notice is not required if:

  • the employee has not worked for the employer for at least 13 weeks;
  • the employee quits;
  • just cause for termination exists; or
  • the employer provides the employee with pay instead of notice.

When an employee is terminated, the employer must, within 14 days, pay:

  • all wages owing;
  • all vacation pay and public holiday pay owing; and
  • any pay instead of notice (if required).

If a pay day falls within the 14-day period, the employer must provide an employee's pay on that day.

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2. Just Cause

Just cause for termination generally involves employee misconduct.  Employers are expected to manage employee misconduct as they would other employee performance issues. Where an employee has engaged in misconduct, the employer may terminate the employment relationship for just cause.

Employers should:

  • be objective in assessing employee performance;
  • impose proportional disciplinary responses; and
  • keep records of employee misconduct and performance reviews.

Employers carry the burden of proof.  Employers alleging just cause must be able to prove that employee misconduct was serious enough to justify immediate dismissal. The employer must be able to prove misconduct on an objective standard.

The law for just cause can be complex. It is recommended employers consult with a lawyer for advice.


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3. Pay Instead of Notice

When laying off or terminating employees, employers can provide pay instead of working notice. The pay instead of notice must be equal to the amount of notice an employee is entitled to.

To calculate pay instead of notice, take the employee’s normal weekly wage and multiply by the working notice requirement. 

If the employee’s wages vary from week to week, the employer would need to calculate the weekly wage averaged over the employee’s last 13 weeks of work. The weekly average would then be multiplied by the amount of working notice required. Overtime, tips and gratuities are not included in these calculations.

Pay instead of notice must be paid within 14 days.  If a pay day falls within the 14-day period, the employer must provide the employee’s pay on that day.

Pay instead of notice is not required if:

  • the employee has not completed 13 consecutive weeks of employment;
  • the employee quits or retires; or
  • the employee is dismissed for just cause.

Entitlements cannot be a part of notice.  For example, employers cannot substitute paid vacation time or vacation pay for written notice or for pay instead of notice. 

The same goes for overtime banks.  Employers cannot schedule the employee to take paid regular time off from an overtime bank as part of the notice period.  They also cannot use overtime bank payout as pay instead of notice.

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4. Employee Responsibilities When Leaving a Job

Employees have the responsibility of providing notice when leaving a job.  Employees employed for 13 consecutive weeks or longer must provide their employer with two weeks written notice before leaving. The notice must state the employee’s last day of work. 

In some situations, employees are not required to provide notice.  These situations include:

  • the employee quits for health and safety reasons;
  • the employee quits due to a wage reduction; and
  • the employee’s contract terminates through no fault of either the employer or employee (i.e., fire destroys business).

Employers can waive the requirement for an employee providing written notice.  

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5. Group Termination

A group termination occurs when an employer terminates 10 or more employees at one place of employment within a four-week period.  This includes a layoff that has no recall date or that is longer than 26 weeks. 

The employer must give notice of group termination.  The minimum notice for group termination is:

10 to 49 employees  4 weeks
50 to 99 employees 8 weeks
100 or more employees 12 weeks

Notice must be in writing and provided to:

  • the Minister of Labour Relations and Workplace Safety;
  • each employee whose employment will be terminated; and
  • any union representing the employee.

The notice must include:

  • the number of employees being terminated or laid off;
  • the effective date(s) of the termination or layoff; and
  • the reasons for termination or layoff.

Employees affected by a group termination must also get an individual termination notice.  The employer can give the individual and group termination in the same document and at the same time if the notice meets the time required for both individual and group termination.

Exceptions:

An employer is not required to give notice of group termination if the employees:

  • work on an ‘on-call’ basis;
  • are employed for a definite period ( e.g., an employee hired under a 26-week contract);
  • are employed for a specific project with a completion date that is reasonably foreseeable (e.g., a construction project nearing completion);
  • are offered and refuse reasonable alternate work;
  • are employed on a seasonal basis;
  • are laid off for a period of less than 26 weeks; and
  • are unable to work because of an unpredictable event or circumstance (e.g., fire, abrupt cancellation of a contract, etc.)

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