Temporary Layoffs
In Ontario, a temporary layoff may result in the termination of your employment
A temporary layoff is generally not something your employer has the right to impose on you. Here is what you need to know about temporary layoffs in Ontario, your rights, and when your employer may have the right to place you on temporary layoff.
What is a temporary layoff?
A temporary layoff occurs when an employer instructs an employee to stay off work for a set period without pay. The employer may assert that the employee has not been terminated but that their position is temporarily suspended or “on hold.” These layoffs are often seen during periods of economic slowdown, restructuring, or operational difficulties. While employers may claim that a temporary layoff is within their rights, the reality under Ontario employment law is more nuanced.
You may be entitled to claim damages if your employer has placed you on a temporary layoff. In some instances, this layoff could be considered a constructive dismissal, meaning your employment relationship has been fundamentally altered without your consent. In most cases, employees who have been constructively dismissed are entitled to severance pay or compensation for lost wages during the layoff period.
Why do you need an employment lawyer if you have been temporarily laid off?
If you are not part of a union and you are placed on a temporary layoff, there are several potential outcomes under Canadian law. Depending on the facts, you may be able to claim a severance package or lost wages during the period of your layoff.
If you are not unionized and have been placed on a temporary layoff in Ontario, it is recommended to seek legal advice from an experienced employment lawyer to understand your rights, as there are several potential outcomes under Canadian law, including your potential entitlement to a severance package or lost wages during the period of your temporary layoff.
Having Whitten & Lublin employment lawyers on your side helps safeguard your interests. We can guide you through negotiations with your employer and, if necessary, pursue legal proceedings to recover what you are owed, so that you receive the appropriate termination pay and any other entitlements.
If you’re facing termination of employment, our team is here to protect your rights. We go beyond basic legal advice by utilizing our Severance Solution®, a powerful tool developed to help assess the financial compensation of your case to craft a tailored action plan. This step-by-step strategy is designed to maximize your severance package. Whether through negotiation or more assertive legal action, we will stand by you to ensure your compensation is what you rightfully deserve.
Does your employer ever have the right to place you on a temporary layoff in Ontario?
Occasionally. There are a few limited situations where your employer may have the right to place you on a temporary layoff:
Scenario 1
You agreed you could be placed on a layoff in your employment contract
One situation where your employer may have the legal right to place you on a temporary layoff is if you have agreed to it in your employment contract. This express term means that, as part of your agreement with your employer, you acknowledged and accepted the possibility of being laid off without pay for a set period.
In such cases, your employer may argue that the layoff is lawful because it was part of the terms you agreed to at the start of your employment.
When an Ontario employee’s employment contract permits a temporary layoff, whether through an express or implied term, this may give your employer the right to lay you off without pay. Even then, not all contracts comply with provincial or federal labour employment legislation and the contract may be drafted or signed under circumstances where it would not be valid.
Scenario 2
You consent to the temporary layoff
Another scenario where an employer may lay you off legally is if you consent to it. In some cases, workers may choose to accept a temporary layoff even if their employment contract does not specifically mention it. This may happen during times of economic uncertainty or if the employer assures the worker that the layoff is only temporary and the employer recalls them soon. However, agreeing to a layoff is a significant decision, and it’s important to be fully informed before making it. You should only consent to a temporary layoff after you fully understand your potential rights and entitlements.
Sometimes, you can choose not to fight the layoff at the time it occurs and to wait and then see how things unfold later. In this situation, it is still important to communicate your stance to your employer.
Scenario 3
Temporary layoffs are common in your industry, or you have previously been laid off temporarily
In some industries, temporary layoffs are so common that workers are expected to endure them as part of the normal course of business. If you work in one of these industries and you have previously condoned layoffs then you may not have the right to challenge a temporary layoff if and when it occurs to you.
Even in industries where layoffs are routine, the employer must still comply with employment standards and treat employees fairly. If you believe your employer is using the layoff as a tactic to avoid conducting proper terminations with severance packages, an employment lawyer can help you determine if you have a case for constructive dismissal, wrongful dismissal, or other legal claims.
How can the employment lawyers at Whitten & Lublin assist if you are placed on a temporary layoff in Ontario?
Our lawyers will be able to determine whether your employer even has the right to place you on a layoff and if not, we will help you to get clarity and control of your matter by explaining the options you should consider ensuring that your legal rights are protected. Oftentimes in this scenario you will need an employment lawyer to advocate on your behalf or to pursue a claim for damages.
If you find yourself in this situation, you can count on the layoff lawyers at Whitten & Lublin to be in your corner. We regularly assist workers who are faced with temporary layoff scenarios.
In many cases, no. Employers in Ontario do not have an automatic right to impose a temporary layoff unless that right is clearly outlined in your employment contract or permitted under a binding collective agreement. If you were placed on leave without prior agreement or if there’s no established industry practice allowing for it, your employer may have overstepped. Legally, that kind of unilateral change could be considered a constructive dismissal, which entitles you to severance as though you were terminated outright. If you’re unsure whether your layoff was legal or not, it’s critical to get legal advice before making assumptions or signing anything.
In Ontario, the Employment Standards Act (ESA) sets time limits on how long a layoff can last before it’s treated as a termination. Generally, 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. But here’s the key detail: even if a temporary layoff in Ontario meets those timelines under the ESA, it may still amount to a constructive dismissal at common law, where timelines are not the sole factor. That’s a critical distinction, and one that we can help you assess based on your employment agreement and circumstances.
No, you are not required to accept a temporary layoff if it wasn’t part of your original employment agreement. If your contract doesn’t expressly allow for layoffs and you’re not part of a unionized workforce, you may have legal grounds to treat the layoff as a termination. Accepting it without protest could weaken your position if the layoff becomes long-term or permanent. These situations can be legally complex and emotionally draining, especially when financial uncertainty is involved. Our team can help you evaluate your options and assert your rights without delay.
During a temporary lay off in Ontario, your rights hinge on whether the layoff was lawful in the first place. If it wasn’t, you may be entitled to full severance or compensation for lost income. Even if the layoff was technically permitted under the ESA, you still retain the right to challenge it under common law, where courts take a broader view of employer obligations. You may also qualify for Employment Insurance during this period, but those supplementary unemployment benefits do not remove your entitlement to damages from your employer. If a temporary layoff has dragged on or feels indefinite, we can help affected employees determine whether it’s time to take action to claim termination entitlements.
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