Do I Have To Give My Employees Notice?Team
When it comes to letting an employee go, employers are required to provide notice or termination pay in lieu of notice. Notice is the time period that begins when the employee was informed, they were being fired up until the employee’s last day of work. Employers must be aware of what their obligations are, as failure to comply with the minimum notice standards under the Employment Standards Act (ESA) can lead them to further and increased damages against themselves.
What is notice?
Notice is the advanced warning an employer provides their employee in which they indicate their intention to terminate the employee without cause. Employers usually provide an employee with termination pay or a severance package in lieu of notice.
The notice usually comes in 2 forms: statutory notice and reasonable notice.
- Statutory notice: this is the minimum amount of notice that an employer must give to their employee according to the ESA.
- Reasonable notice: this is the amount of notice an employer must provide to their employee according to the common law precedents.
Reasonable notice tends to be more lucrative than statutory notice.
When determining reasonable notice, we refer to the Bardal factors which examine:
- The employee’s position
- The employee’s length of service
- The employee’s age; and
- The availability of similar employment.
The ESA outlines that employees are entitled to a written notice about their employment termination if they have worked for a minimum of 3 months for the same employer. Employers must provide their employees with an official notice of termination which is addressed directly to the employee. This notice could be in person, via email, or by mail, keep in mind that delivery must be able to be verified.
The ESA guarantees that most employees in Ontario who have worked for 3 months or longer for the same employer are entitled to written notice or pay instead of notice is also known as termination pay. The ESA sets out the minimum notice requirements. The length of notice is determined by whether the employee worked for a federal or a provincially regulated company. If an employer wished to terminate the employee immediately without providing any written notice, employees are entitled to receive terminated pay instead of notice. Employers may also give employees a combination of both notices and pay in lieu.
Notice requirements under the Employment Standards Act
Notice requirements as mentioned above depend on the length of time and employee worked for the company, if an employee worked:
- between 3 months to less than 1 year, usually have the right to at least 1 week’s notice or pay instead of notice.
- 1 year or more and less than 3 years, employees usually have the right to at least 2 weeks’ notice or pay instead of notice.
- 3 years or more and less than 4 years, employees usually have the right to at least 3 weeks’ notice or pay instead of notice.
- 4 years and more and less than 5 years, employees usually have the right to at least 4 weeks’ notice or pay instead of notice.
- 5 years and more and less than 6 years, employees usually have the right to at least 5 weeks’ notice or pay instead of notice.
- 6 years or more and less than 7 years, employees usually have the right to at least 6 weeks’ notice or pay instead of notice.
- 7 years and more and less than 8 years, employees usually have the right to at least 7 weeks’ notice or pay instead of notice.
- 8 years and more, employees usually have the right to at least 8 weeks’ notice or pay instead of notice.
What are the employers’ requirements during the notice period?
Employers must continue to pay employees their regular wages and continue to make the corresponding contributions that are required to maintain the employee’s benefits plan.
For mass terminations, there are specific rules when the employment of 50 or more employees is terminated at an employer’s establishment within a four-week period.
When a mass termination occurs, the employer must submit a Form 1 known as Notice of Termination of Employment to the Director of Employment Standards. In addition to providing employees with individual notices of their termination, employers are required to post a copy of Form 1 given 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.
In Ontario, the minimum notice period will not be based on the workers’ length of employment, but on the number of employees who have been terminated:
- 8 weeks’ notice for the termination of 50 to 199 employees
- 12 weeks’ notice for the termination of 200 to 499 employees
- 16 weeks’ notice for the termination of 500 or more employees
How is the Termination Notice Paid?
The purpose of providing notice to an employee is to allow the employee sufficient time to find comparable employment. The employer either has the option to allow the employee to work until the notice period ends or terminate the employee immediately and compensate with pay in lieu of notice which is to be equivalent to the salary and benefits the employee would have been provided until the end of the notice period. If the employer decided to pay in lieu of notice, this remuneration must be paid no later than 7 days after the termination date or on the next regular payday the employee was entitled to, whichever is later.
Employers must keep in mind that when it comes to providing notice of termination they should always be in writing and that the ESA sets out the minimum amount of notice that an employee may be entitled to. In most cases, employees may be entitled to much more than what the ESA sets out, which is where common law notice supplements the amount the employee is truly entitled to.
Employers must always ensure that the notice they provide their employees is suitable to their particular case and employees must always be aware of what they are entitled to under statutory law and common law.
If you are unsure about how to provide notice to an employee or what notice of termination period you are entitled to or obligated to give, our team of experienced employment and human rights lawyers at Achkar Law can help. Contact us by phone toll-free at +1 (800) 771-7882 or email us at [email protected], and we will be happy to assist.