Definitions
58.(1) In this section, “lay-off” means a period of at least one week in which an employee receives less than one-quarter of the wages he or she would earn at his or her regular rate in a regular non-overtime work week unless the employee, (a) was not able to work or not available for work, (b) was subject to disciplinary suspension, or (c) was not provided with work by his or her employer by reason of any strike or lock-out occurring at his or her place of employment or elsewhere; (“mise à pied”) “termination” means, (a) a dismissal, including a constructive dismissal, (b) a lay-off that is effected because of a permanent discontinuance of all of the employer’s business at an establishment, or (c) a lay-off, including a lay-off effected because of a permanent discontinuance of part of the business of the employer at an establishment, that equals or exceeds thirty-five weeks in any period of fifty-two consecutive weeks, and “terminated” has a corresponding meaning. (“licenciement”, “licencié”) R.S.O. 1990, c. E.14, s. 58 (1). Termination when bankruptcy, etc. (1.1) An employer shall be deemed to have terminated the employment of an employee and the termination shall be deemed to have been caused by the permanent discontinuance of all or part of the business of the employer at an establishment if the employment is terminated by operation of law, (a) as a result of the bankruptcy of the employer, whether or not it is the employer who initiates bankruptcy proceedings; (b) as a result of the insolvency of the employer; or (c) as a result of any operations of the employer being placed in receivership. 1995, c. 1, s. 75 (1). Severance pay (2) Where, (a) fifty or more employees have their employment terminated by an employer in a period of six months or less and the terminations are caused by the permanent discontinuance of all or part of the business of the employer at an establishment; or (b) one or more employees have their employment terminated by an employer with a payroll of $2.5 million or more, the employer shall pay severance pay to each employee whose employment has been terminated and who has been employed by the employer for five or more years. R.S.O. 1990, c. E.14, s. 58 (2); 1993, c. 27, Sched. Where location deemed an establishment (3) Where, (a) there is a permanent discontinuance of all or part of the business of an employer at a location which is part of an establishment consisting of two or more locations; and (b) fifty or more employees have their employment terminated in a period of six months or less because of the permanent discontinuance, the location shall be deemed to be an establishment for the purpose of determining the rights of the employees employed at that location under this section. R.S.O. 1990, c. E.14, s. 58 (3); 1993, c. 27, Sched. Amount of severance pay (4) The severance pay to which an employee is entitled under this section shall be in an amount equal to the employee’s regular wages for a regular non-overtime work week multiplied by the sum of, (a) the number of the employee’s completed years of employment; and (b) the number of the employee’s completed months of employment divided by 12, but shall not exceed twenty-six weeks regular wages for a regular non-overtime work week. R.S.O. 1990, c. E.14, s. 58 (4); 1993, c. 27, Sched. Application (5) Subsections (2), (3) and (4) apply to, (a) a regular full-time employee and a regular part-time employee; (b) an employee whose employment is terminated as a result of a strike or lock-out except where the employer establishes that the permanent discontinuance of all or part of the business at an establishment is caused by the economic consequences of the strike; (c) an employee who is absent because of illness or injury, if the employee’s contract of employment has not become impossible of performance or been frustrated by that illness or injury; (d) an employee who received or was entitled to receive notice of termination but who died before his or her employment was terminated or would have been terminated if notice of termination had been given; (e) a permanent discontinuance of all or part of a business at an establishment however caused, whether fortuitous, unforeseen or by act of God; (f) an employee who loses his or her employment by the exercise by another employee of a seniority right; and (g) an employee who, upon having his or her employment terminated, retires and is entitled to receive a reduced pension benefit. R.S.O. 1990, c. E.14, s. 58 (5). Exceptions (6) Subsections (2), (3) and (4) do not apply to, (a) an employee who refuses an offer by his or her employer of reasonable alternative employment with the employer; (b) an employee who refuses to exercise his or her seniority rights to obtain reasonable alternative employment; (c) an employee who has been guilty of wilful misconduct or disobedience or wilful neglect of duty that has not been condoned by the employer; (d) an employee who, upon having his or her employment terminated, retires and receives an actuarially unreduced pension benefit; (e) an employee whose employer is engaged in the construction, alteration, maintenance or demolition of buildings, structures, roads, sewers, pipelines, mains, tunnels or other works where the employee works at the site thereof; or (f) an employee who is employed under an arrangement whereby the employee may elect to work or not when requested to do so. R.S.O. 1990, c. E.14, s. 58 (6); 1993, c. 27, Sched. Severance pay in addition to other payment (7) Severance pay under this section is payable to the employee in addition to any other payment under this Act or contract of employment without set-off or deduction, except for, (a) supplementary unemployment benefits payable to and received by the employee; or (b) payments made to the employee under a contractual severance pay scheme under which payments for loss of employment based upon length of service are provided. R.S.O. 1990, c. E.14, s. 58 (7); 1993, c. 27, Sched.; 1996, c. 23, s. 11. Prior employment included (8) Employment before the 1st day of January, 1981, shall be taken into account in calculating the years of employment of an employee to whom this section applies. Employment not included (9) A year of employment for which an employee has been paid severance pay shall be excluded in any subsequent calculation of severance pay for that employee. R.S.O. 1990, c. E.14, s. 58 (8, 9). Sale of a business (9.1) If an employer who sells a business within the meaning of section 13 purports to pay severance pay to an employee employed by the purchaser and if the amount paid at least equals the amount of severance pay to which the employee would have been entitled had he or she not been employed by the purchaser, the amount paid shall be treated as severance pay for the purposes of subsection (9). Same (9.2) Subsection (9.1) applies with respect to payments made before or after that subsection comes into force. 1997, c. 21, s. 3 (2). Election by employee (10) Where an employee who is entitled to severance pay under this section has a right to be recalled for employment under the terms and conditions of employment, the employee may elect to be paid the severance pay forthwith or may elect to maintain the right to be recalled. Effect of election to accept severance pay (11) Where the employee elects under subsection (10) to be paid the severance pay forthwith, the employee shall be deemed to have abandoned the right to be recalled. Effect of election to maintain right to recall (12) Where the employee elects to maintain the right to be recalled or fails to make an election, the employer shall pay the severance pay to the Director in trust to be paid by the Director, (a) to the employer, where the employee accepts employment made available under the right of recall and in such case the employee shall be deemed to have abandoned the right to severance pay; or (b) to the employee in any case other than a case mentioned in clause (a), including the case where the employee renounces the right to be recalled, and, upon payment, the employee shall be deemed to have abandoned the right to be recalled. Where employee resigns (13) Where an employee who receives notice of termination resigns from employment during the statutory notice period and provides the employer with at least two weeks written notice of resignation, the employee shall, (a) where the employee has been given notice of termination because of the permanent discontinuance of all of the employer’s business at an establishment, be deemed to have had his or her employment terminated by the employer on the date the notice of termination was to have taken effect; and (b) in any other case, be deemed to have been laid off by the employer commencing on the date the notice of termination was to have taken effect. Calculation of severance pay (14) The amount of severance pay for an employee who is entitled to severance pay under subsection (13) shall be calculated on the employee’s length of employment up to the date on which his or her notice of resignation takes effect. Instalment payments (15) Despite subsections (2) and (12) and section 7, where the Minister so recommends, the Director may, on an application by the employer, approve the employer’s plan to pay severance pay by instalment and, where such approval has been given, the employer shall be deemed to have complied with subsections (2) and (12) and section 7. Where employer fails to comply with plan (16) Where an employer fails to comply with the approved plan and the Director does not approve another instalment plan within thirty days of such failure, all unpaid severance pay shall be deemed to have become due and payable on the date the Director approved the original instalment plan. Maximum period for payment of instalments (17) No instalment plan shall extend payment of severance pay for a period longer than three years from the date on which such severance pay became due and payable. Where agreements made by trade union (18) Despite section 3, where an employee who is entitled to severance pay under this section is represented by a trade union, the trade union may enter into an agreement with the employer which includes a settlement of all severance pay claims, in which case this section does not apply. Director to be notified (19) The parties to an agreement under subsection (18) shall forthwith notify the Director in writing. Proceedings terminated (20) Where there is an agreement under subsection (18), any proceeding under section 68 or 69 to determine severance pay is terminated with regard to the employees represented by the trade union. R.S.O. 1990, c. E.14, s. 58 (10-20). Failure to pay severance pay (21) If a trade union has entered into a settlement agreement under subsection (18) and the employer does not pay the severance pay agreed to or the trade union demonstrates that the agreement was made as the result of fraud or coercion, an employment standards officer may make an order under section 65 as to what action, if any, the employer shall take and may make an order to compensate the employee for the severance pay that is owed. Calculation of severance pay (22) For purposes of subsection (21), the amount of severance pay an employee is entitled to in an order under section 65 is the amount as calculated under subsection (4) or as negotiated in the collective agreement, whichever is the greater. 1991, c. 16, s. 4. No offence (23) An employer does not commit an offence under subsection 78 (1) when his, her or its employees are deemed to have been terminated under subsection (1.1) and the employer does not comply with subsection (2). Same (24) An officer, director or agent of a corporation or a person purporting to act in any such capacity does not commit an offence under subsection 79 (1) when the corporation is an employer whose employees are deemed to have been terminated under subsection (1.1) and the corporation does not comply with subsection (2). 1995, c. 1, s. 75 (2). PART XIV.1   EMPLOYEE WAGE PROTECTION PROGRAM (DISCONTINUED)