What is the Employment Standards Act, 2000?
All employees in Ontario who work for a company that is provincially regulated are protected by the minimum requirements set out in the Ontario Employment Standards Act, 2000 (the “ESA“). The ESA is the foundation of employment law rights in Ontario and, correspondingly, creates important responsibilities that all employers in Ontario must follow.
The ESA applies to:
- all employees whose work is to be performed in Ontario and their employers; and
- all employees whose work is to be performed in Ontario and who also perform work outside of Ontario, but only where the work is a continuation of the work performed in Ontario.
However, the ESA does not apply to employees and employers that are federally regulated and who are instead subject to the Canada Labour Code (e.g., railways, telephone companies, airlines, banks, etc.).
NOTE: the ESA only provides for an employee’s minimum standards in most Ontario workplaces. However, employees may have greater rights under an employment contract, the common law or other legislation. This blog should not be used as or considered legal advice. If an employee wants more information about their own situation, it is important to talk to an experienced employment lawyer.
What are the Basic Employee Rights in the ESA?
Payment of Employee Wages
The ESA sets out rules regarding an employer’s requirement to pay employees wages for work performed, including payment methods, deductions from wages and statement of wages (“pay stubs”). employees receive wages for work performed. For instance, the ESA states that an employer can pay an employee’s wages by cash, direct deposit or cheque payable only to the employee.
In situations where employment ends, the ESA requires employers to pay employee’s outstanding wages by no later than the later 7 days after employment has ended and the the very next pay day to fall after the date employment ends. Likewise, employers are required to pay stubs with respect to wages (including vacation pay) paid on termination of employment, as well as how the gross amounts of termination pay, severance pay, vacation pay and any other wages, in addition to those amounts was calculated.
Under the ESA, employers are prohibited from making deductions from an employees wages, including:
- withholding wages that an employee has earned;
- making a deduction from an employee’s wages;
- causing the employee to return their wages to the employer, except where the employer where permitted.
The only times an employer is allowed to make deductions from an employees wages are if:
- required by law (e.g., income tax, CPP and EI deductions);
- court order (that has determined that the employee owes the money to be deducted); or
- the employee’s written authorization permit the deduction.
Continuity of Employment (Seniority) in a Sale of Business
The ESA provides that, if there is a sale of a business and an employee of the selling company is hired by the purchaser, the employee’s length or period of employment with their previous employer is treated as if it had been employment with the new employer with respect to rights under the ESA that determined by length or period of employment. This includes an employee’s minimum entitlements to vacation, pregnancy and parental leave, notice of termination or pay in lieu and severance pay under the ESA.
Hours of Work and Eating Periods
The ESA limits the number of daily and weekly hours that an employer may generally require or allow an employee to work:
- Daily: maximum 8 hours per day; or
- Weekly: maximum 48 hours per work week.
This ESA rule allows employees to refuse to work hours in excess of 8 per day and 48 hours in a work week, unless:
- employees have agreed in writing to work hours in excess of the 8-hour daily limit;
- allows employees have agreed in writing to work hours in excess of the 48-hour weekly limit; or
- where there are exceptional circumstances (e.g., to allow an employer to deal with an emergency or carry out urgent repair work).
This means that, in a non-unionized workplace, each employee has the right on an individual basis to enter into agreements to work excess weekly hours. For example, an employee can enter into an agreement to work excess 48 weekly hours if it specifies the exact number of hours that the employee is agreeing to work, the exact number of hours over and above the weekly limit, or they can specify an upper limit (e.g., up to 60 hours a week
).
In addition, the ESA requires employers to provide an unpaid, uninterrupted eating period of at least 30 minutes timed, to ensure no employee works longer than 5 consecutive hours without receiving an eating period. Alternatively, the employer and employee may agree to an eating period arrangement whereby the employee receives 2 unpaid, uninterrupted eating periods that together total at least 30 minutes within a period of 5 consecutive hours.
Vacation with Pay
Ontario employees are entitled to a minimum 2 weeks’ of vacation time after each completed vacation entitlement year, which increases to 3 weeks after completing 5 years of continuous employment with the same employer.
Similarly, employees must receive vacation pay of at least 4% of regular wages (for employees whose period of employment is less than 5 years upon completion of a vacation entitlement period), and 6% of regular wages (for employees whose period of employment is 5 years or more upon completion of a vacation entitlement period).
In terms of when vacation may be taken, the ESA gives employers the right and the obligation to determine when an employee may take the vacation time earned over the stub period. And where when an employee’s employment ends, the employee must be paid any accrued vacation pay that is outstanding at the termination of employment date.
Termination Pay
The ESA provides that when an employer decides to terminate an employee’s job, it must generally provide the employee with:
- prior notice to the employee of their last day of work, or termination pay instead;
- continue their benefits for a minimum period of time (depending on the employee’s years of service with the employer; and, in some cases:
- statutory severance pay.
When does an employee receive notice of termination and severance pay? Basically, whenever their job is terminated, including where the employer notifies the employee that they are being:
- “let go”
- “discharged”
- “dismissed,”
- “fired”
- “permanently laid off
The main requirement for employees to qualify for receiving notice of termination and severance pay are: (i) the employee was continuously employed for 3 months (i.e., has completed probation); and (ii) the employer has not terminated the employee’s job due to wilful misconduct, disobedience, or wilful neglect of duty.
The employer must provide the employee with either written notice of termination, termination pay or a combination.
Statutory Severance Pay
In some cases, employers must also provide an employee with statutory “severance pay” when termianting their employment.
“Severance Pay” is meant to financialily compensate an employee for the fact that their employment was “severed” (given the fact that they lose their seniority).
It is important to keep in mind that Severance Pay is not the same as termination pay, which is given in place of the required notice of termination of employment. Also, Severance Pay is only required in certain circumstances, including if the employee:
- has worked for the employer for 5 or more years
and - his or her employer:
- has a payroll in Ontario of at least $2.5 million;
or - severed the employment of 50 or more employees in a six-month period because all or part of the business permanently closed.
- has a payroll in Ontario of at least $2.5 million;
How much is the Minimum Amount of Notice of Termination, Benefits Continuance and Severance Pay?
The following chart illustrates how much notice is required if an employee has been continuously employed for at least 3 months:
| Period of employment | Notice required |
|---|---|
| Less than 1 year | 1 week |
| 1 year but less than 3 years | 2 weeks |
| 3 years but less than 4 years | 3 weeks |
| 4 years but less than 5 years | 4 weeks |
| 5 years but less than 6 years | 5 weeks |
| 6 years but less than 7 years | 6 weeks |
| 7 years but less than 8 years | 7 weeks |
| 8 years or more | 8 weeks |
Minimum Wage
The ESA requires that an employer pay employees at least the minimum wage, which differ depending on the type of job (see here).
Job-Protected Leaves of Absence from Work
All qualified employees who have worked the required duration have the right to take job protected leaves, including:
Pregnancy and Parental Leave: allows parents to spend time with a newborn or newly adopted child and was also intended to enable employees to take advantage of the new parental benefit under the former federal Unemployment Insurance Act.
Sick Leave: employees who have been employed for at least 2 consecutive weeks with the right to take up to 3 days of unpaid leave from work each calendar year because of a personal illness, injury or medical emergency.
Critical Illness Leave: employees who have been employed by their employer for at least six months with the right to take unpaid time off work to provide care or support to a critically ill minor child or adult who is a family member of the employee. Employees are generally entitled to up to 37 weeks of unpaid leave in relation to a minor child, and 17 weeks in relation to an adult, to be taken in a 52-week period (and may requalify for subsequent 37 or 17 weeks of leave in subsequent 52-week periods).
Family Responsibility Leave: employees who have been employed for at least 2 consecutive weeks with the right to take up to 3 days of unpaid leave from work each calendar year because of the illness, injury, medical emergency or urgent matter of certain relatives.
Family Medical Leave: employees with the right to take up to 28 weeks of unpaid leave from work to provide care or support to certain family members who have a serious medical condition and are at significant risk of dying within a period of 26 weeks without penalty.
Family Caregiver Leave: employees with the right to take unpaid time off work to provide care or support to specified family members who have a serious medical condition, even if the family member is not at significant risk of death within a period of 26 weeks, which is a qualifying criterion for family medical leave. Employees are entitled to up to 8 weeks of unpaid leave each year with respect to each specified family member.
Contact Employment Lawyer
If you are an employee who has been fired, terminated or dismissed from your job, or an employer that has terminated an employee, and want to know more about your rights and options, Bune Law, Toronto employment lawyer, can help and would be happy to assist. As discussed above, the ESA only establishes the “base floor” (minimum) rights in Ontario workplaces – and in fact, many employees have much greater rights in their employment contract or under common law, including when it comes to a financial severance package, constructive dismissal or a wrongful dismissal claim.
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