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2. General Overview

Termination of Employment

Nobody Expects to Lose Their Job

Ensuring that termination of employment is done with respect and dignity is of the utmost importance. All workers deserve to have appropriate notification and compensation when their job is terminated.

Canada Labour Code

Termination of employment for federally regulated workplaces is covered by the Canada Labour Code. The Code is administered by Human Resources and Skills Development Canada’s Labour Program.Code provisions are minimum standards only and do not interfere with additional rights or enhanced benefits established by collective agreement, private arrangements or employer policies.

The Canada Labour Code covers all employees and employers who work within the federal jurisdiction. This includes some of Canada’s major infrastructure sectors, such as interprovincial and international transportation (air, rail, ports and trucking), communications, banking and Crown corporations.

Responsibilities of the Employer

When terminating the employment of one or more workers, an employer must follow specific procedures to ensure that individuals are given ample notice or appropriate compensation in lieu of notice.

Notice of Termination

Workers are entitled to a written notice of the employer’s intention to terminate their employment, at least two weeks before the date specified in the notice. In lieu of such notice, workers are entitled to two weeks of wages at their regular rate.

Group Termination

A group termination is a situation where 50 or more workers from a single establishment are dismissed simultaneously or within a four-week period. In such cases, employers must give notice of a group termination at least 16 weeks before the date the termination commences to:

• the Minister of Labour;
• the Canada Employment Insurance Commission;
• the union certified to represent any worker in the group whose employment is being terminated; and
• any worker in the group whose employment is being terminated who is not represented by a trade union.

In most cases, an employer will be required to establish a committee to develop an adjustment program to avoid or minimize the impact of a group termination, and help workers find other employment.

Severance Pay

A worker must have completed at least 12 consecutive months of continuous employment to qualify for severance pay. Severance pay is the equivalent of two days pay at the worker’s regular rate for each complete year of employment, with a minimum benefit equivalent to five days of wages.

Layoffs

A layoff is considered a termination of employment if the employer has no intention of recalling the worker to work. In such a case, employers have responsibilities and obligations to the workers usually associated with the termination of employment.

There are circumstances when a layoff is not considered a termination of employment, for example when it is the result of a strike or lock-out, or when the layoff is for three months or less. In most cases, if an employer is unable to recall a worker after a layoff in the above situations, the layoff becomes an individual termination of employment.

Compliance

The Code contains provisions designed to support voluntary compliance, which the Labour Program promotes using a range of tools and techniques. If required, it responds to non-compliance situations through various voluntary and non-voluntary measures.

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Date Modified:

2011-10-05