Guide to Termination of Employment

Understanding what to do

Human Resources
 Min read
September 10, 2021

What is Termination of Employment?

Termination of employment is simply the ending of a working relationship between an employer and employee. There are quite a few variations and terms used for describing situations where employment is being terminated including but not limited to being let go, dismissed, fired, permanent lay-off, and being discharged. As defined in the Employment Standards Act, an employment is terminated if the employer has dismissed or stopped employing an employee, an employer constructively dismisses an employee where the employee resigns, and an employer lays off an employee for a longer period than what is constituted under a temporary lay-off.

More often than not, situations where an employer terminates the employment of an employee who has provided service for a period longer than 3 months, the employer is required to provide the employee with a written notice of termination, termination pay, or a combination of both. The combination can occur as long as the termination notice and the termination pay are equal to the length of notice the employee is entitled to receive.

Termination Without Cause

Termination without cause occurs when an employer wishes to terminate an employee if they decide they no longer want to maintain the employee’s services, therefore the employee does not have to do anything wrong for this outcome. It is the employer’s right to terminate the employment if they wish. This could be a result of many different things including lack of work, restructuring, and any other reason that would not lead to cause for dismissal. The employee in this case can generally apply for employment insurance benefits.

Giving an employee reason for the termination is not required under the Employment Standards Act. The ESA also doesn’t require an employer to provide the employee with a reason as to why their employment is being terminated. The employer, however, must meet the other legal requirements.

There are limitations to terminating an employee without cause including terminating the employee for enforcing their rights or health & safety legislation, or for discriminatory reasons. The Ontario Human Rights Code identifies the protected grounds under which an employer cannot discriminate against their employees or treat them unfairly.

Termination For Cause

Termination for cause is also known in Ontario as a termination for just cause. In this case, the employee being terminated is not provided with a notice of dismissal or a severance package and may be ineligible for employment insurance benefits. The employee must have been guilty of serious misconduct, neglect of duty that becomes a habit, incompetence, or willful disobedience in order for an employer to terminate the employment for cause. The employer must be able to prove they had just cause to terminate the employee and prove the actions of the employee are going against their contract of employment in terms of misconduct, disobediences or incompetence.

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