Layoffs
A layoff typically means that your employment has ended
In Toronto workplaces, layoffs can occur because of restructuring, reduced work, or economic decisions made by the employer. Most layoffs are meant to be permanent. Employees who are laid off are typically entitled to a severance package.
A so-called “temporary” layoff can also be treated as a termination, depending on how it is handled and whether you agreed to it.
What is the difference between a termination and a layoff?
In many cases, there is little practical difference. A termination and a layoff both describe a situation where the employment relationship has ended and there is no real expectation that the employee will return to work. Whether an employer uses the word “layoff” or “termination,” the legal analysis focuses on what actually happened, not the label that was used.
If you are laid off permanently, or if a layoff effectively ends your role, you are generally entitled to severance pay unless the employer can establish just cause. Employers sometimes describe dismissals as layoffs to reduce obligations or create uncertainty, but terminology does not determine your rights.
As with any termination scenario, an employer may claim to have ended employment without just cause, which requires severance pay, or with just cause, which is reserved for serious misconduct. If you have been laid off, even on a so-called temporary basis, you may have the right to challenge the decision and seek compensation.
What is a temporary layoff?
A temporary layoff happens when an employer directs an employee to stop working for a period of time, without pay, while claiming the employment relationship is still intact. Employers often describe the role as paused rather than ended, suggesting the employee will be recalled once business conditions improve. Temporary layoffs commonly arise during downturns, reorganizations, or short-term operational disruptions. Under Ontario employment law, however, an employer’s ability to do this is limited and often misunderstood.
In many situations, a temporary layoff can give rise to legal claims. If the layoff is imposed without a contractual right or your consent, it may amount to a constructive dismissal. Where constructive dismissal is established, employees are typically entitled to severance pay or compensation for lost income during the layoff period.
Does your employer have the right to place you on a temporary layoff?
There are only a few limited situations where your Toronto employer may lawfully place an employee on a temporary layoff.
Scenario 1: Your employment contract allows for layoffs
You agreed you could be placed on a layoff in your employment contract
If there is a layoff clause in your employment contract, your employer could lawfully place you on a temporary unpaid layoff. However, some contracts may fail to comply with provincial employment standards or were signed under circumstances that undermine their validity.
Scenario 2: You consent to the temporary layoff
An employer may argue a layoff is lawful if you agreed to it at the time it was imposed. Accepting a layoff without understanding your rights can limit future options.
Scenario 3: Layoffs are common in your industry
In some industries, temporary layoffs are considered part of the normal course of business. Prior acceptance of layoffs may weaken a challenge later. Even so, employers must still comply with employment standards and act in good faith. A layoff used to avoid proper severance obligations may still be legally challenged.
How can a layoff lawyer in Toronto from Whitten & Lublin help?
Layoffs are often communicated with little detail. Employees may be told the layoff is temporary, that the employer has no choice, or that the severance offer is standard. Those statements are not determinative. A layoff lawyer in Toronto can assess whether the employment relationship has legally ended, whether a temporary layoff amounts to a termination, and what severance obligations apply under employment standards and common law.
At Whitten & Lublin, our Toronto layoff lawyers can help employees dealing with a layoff by reviewing severance packages, assessing whether the layoff can be challenged, and explaining the legal consequences of accepting or declining an offer. That advice is focused on how the situation is likely to be treated if disputed, rather than how it is framed by the employer.
If you have been laid off, contact our layoff lawyers in Toronto for advice that could help preserve your entitlements and prevent missteps that are difficult to reverse. With Whitten & Lublin, you get the support of experienced layoff lawyers who will fight for your rights.
Often, yes. If a layoff is permanent, or if a temporary layoff is unlawful or extends beyond what the law allows, it is treated as a termination. In those cases, employees are generally entitled to severance or termination pay under Ontario’s employment standards.
Under Ontario’s Employment Standards Act, a temporary layoff is generally limited to a defined period. The threshold is 13 weeks in a 20-week period, or up to 35 weeks in a 52-week period if certain conditions, such as continued benefits or recall rights, are met.
If the layoff exceeds what the legislation permits, the employee is deemed terminated by operation of law, triggering severance and termination obligations.
Your rights depend first on whether the layoff was lawful. If it was not, you may be entitled to full severance or damages for lost income. Even if the layoff technically complies with employment standards, you may still challenge it under common law, where courts take a broader view of employer obligations. You may qualify for Employment Insurance during the layoff, but those benefits do not replace or eliminate your right to compensation from your employer. If a temporary layoff becomes prolonged or indefinite, legal action may be warranted.
Your employment
is our specialty
In need of legal advice? We are committed to treating your case with the care, dedication, and compassion that you deserve. Contact our employment and labour lawyers today to learn how we can help you understand and resolve your workplace legal matter.
All required fields are marked with an asterisk (*)
"*" indicates required fields
Get empowered with every newsletter.
"*" indicates required fields
