Temporary Layoffs in Ontario: When Does a Layoff Become a Termination?
A layoff means the employer has stopped giving you work and stopped paying wages, but the job is meant to come back. It is not a termination, until it runs on too long or the employer had no right to do it at all.
- Under the Employment Standards Act (ESA), a temporary layoff can generally last up to 13 weeks in any 20-week period.
- It can run longer, up to 35 weeks in a 52-week period, only if certain conditions are met, such as the employer continuing payments or benefits, or a fixed recall date.
- A layoff that goes past the limit is treated as a termination, so termination pay, and sometimes severance pay, becomes owed.
- An employer needs the right to lay off in the contract, or a clear industry custom. Without it, a layoff can be a constructive dismissal.
What counts as a layoff
A layoff is when an employee is not given work and is not paid wages for a period of time, with the intention that they will come back. Reduced hours can also be a layoff of part of the job. The employer must still issue a Record of Employment, and the employee can usually apply for Employment Insurance.
The time limits
- The basic limit is 13 weeks of layoff in any period of 20 consecutive weeks.
- A longer layoff of up to 35 weeks in a 52-week period is allowed only where the Act's regulation is satisfied, for example the employer keeps paying benefit contributions or other substantial payments, or has set a firm recall date within the limit.
- When the permitted time is exceeded, the layoff is treated as a termination from the first day of the layoff.
Does the employer have the right to lay you off?
The ESA sets the limits on how long a layoff can last, but it does not by itself give an employer the right to lay someone off. Under the common law, an employer generally needs a term in the contract that allows it, or a well-established practice in the industry. Without one, an unrequested layoff can be a constructive dismissal, which lets an employee treat the job as ended and claim notice or severance.
What to do if you are laid off
- Ask in writing why, how long, and when you will be recalled, and keep the answer.
- Get your Record of Employment and apply for EI right away.
- Check your employment contract and any handbook for a layoff clause.
- Keep track of the weeks, because the clock matters for the ESA limits.
- Get advice before you accept or reject a recall, or sign anything, since either can affect your claim.
If the employer recalls you
If you are offered your job back within the allowed time, refusing it can be treated as a resignation. If the recall is on different terms, for example lower pay or different duties, talk to someone before deciding.
Common questions
Can my employer lay me off without notice?
The ESA does not require notice of a temporary layoff the way it does for a termination, but the employer still needs the right to do it, and the layoff has limits.
Do I keep my seniority during a layoff?
Length of service generally keeps counting while you are laid off, for the purposes of the ESA. Check your contract and benefits plan for other effects.
Who can help. Licensed paralegals can represent employees and employers in Employment Standards claims and at the Human Rights Tribunal of Ontario.
This guide is general information for people in Ontario, not legal advice. Rules, forms and deadlines change, and every situation is different. Check the current rule or speak to a licensed legal professional before you act.
Not sure where you stand? A licensed paralegal can look at your documents and tell you your options.
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