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Ontario Layoffs: Your Rights and What You Are Owed
Being laid off is stressful, and the language around it makes things worse. In Ontario, the word layoff is used loosely. Sometimes it describes a genuine, temporary pause in work where you are expected back when business picks up. Far more often it is simply a softer word for being terminated, fired, or let go. Those are not the same thing in law, and the difference decides what you are owed. If you have been laid off in Ontario, here is what a layoff actually means, what your rights are, and what to do before you sign anything.
There is a second trap most people miss. Ontario's Employment Standards Act lets employers impose temporary layoffs in defined circumstances, but the common law generally does not give an employer the right to lay you off at all. Unless your contract clearly allows a layoff, or you agree to it, being placed on a temporary layoff can itself be a constructive dismissal, which you may be able to treat as a termination and claim severance for. Knowing which situation you are in is the difference between accepting nothing and recovering months of pay.
Laid off in Ontario and not sure what you are owed?
Do not assume a layoff means you walk away with nothing, and do not sign a release or a recall agreement before you understand your rights. Estimate what your severance could be worth, then have it reviewed before you decide anything.
Call: 1-800-771-7882 Estimate Your SeveranceWhat a layoff actually means in Ontario
People use the word layoff to describe two very different situations. Sorting out which one applies to you is the first step.
Temporary layoff
A temporary layoff is a reduction or pause in your work, usually unpaid, on the understanding that you will be recalled when conditions improve. The employment relationship is meant to continue during the layoff. Temporary layoffs are far less common than people assume, and they are subject to strict time limits under the Employment Standards Act.
Permanent layoff, which is really a termination
A permanent layoff is an end to the employment relationship. It is the same thing as being terminated, fired, or let go, whether the reason is a shortage of work, a restructuring, or a cost cutting exercise. When people say they were laid off, this is usually what they mean. A permanent layoff that is not handled lawfully is a wrongful dismissal, and it can entitle you to significant compensation.
Temporary layoffs: allowed by the ESA, but not always by your contract
This is the point that trips up both employees and employers. Ontario's Employment Standards Act permits temporary layoffs in defined circumstances and for limited periods. That leads many people to believe an employer can always lay someone off temporarily without consequence. That is not how the law works.
Under the common law, an employer generally has no automatic right to lay you off. Imposing a layoff is a fundamental, unilateral change to your employment. Unless your written contract clearly gives the employer the right to lay you off, or you agree to it, a layoff can be treated as a constructive dismissal the moment it is imposed. In plain terms, a layoff that is perfectly allowed under the ESA can still be a termination at common law, entitling you to notice and severance. The label your employer uses does not control your rights.
How long can a temporary layoff last in Ontario?
Under the Employment Standards Act, a layoff is only temporary if it stays within set limits. If it runs past those limits without a recall, it generally becomes a termination dated to the first day of the layoff, which triggers termination and severance entitlements.
| Type of temporary layoff | Limit under the ESA | What happens if it is exceeded |
|---|---|---|
| Standard temporary layoff | Up to 13 weeks of layoff in any period of 20 consecutive weeks | Treated as a termination dated to the first day of the layoff, triggering termination pay and, where applicable, statutory severance |
| Extended temporary layoff | Up to 35 weeks of layoff in any period of 52 consecutive weeks, but only if certain conditions are met, such as the employee continuing to receive substantial payments, benefits, or supplementary unemployment benefits, or having recall rights | Treated as a termination dated to the first day of the layoff if the extended conditions are not met or the 35-week limit is passed |
The weeks of layoff do not have to be consecutive. A brief recall in between does not reset the count. What matters is the total weeks of layoff within the applicable window. And as noted above, even within these limits, a layoff your contract did not authorize can still be a constructive dismissal from day one.
Your rights if you are laid off in Ontario
If your layoff is really a termination, a constructive dismissal, or a temporary layoff that was not recalled in time, your entitlements can be substantial. They generally include:
- Statutory termination pay under the Employment Standards Act, based on your length of service, up to a maximum of eight weeks.
- Statutory severance pay, which is separate and additional, where you have at least five years of service and your employer meets the payroll or mass termination threshold under the ESA. This can add up to 26 weeks.
- Common law reasonable notice, which is usually far higher than the statutory minimums and is assessed on your age, your length of service, the seniority of your role, and the availability of comparable work. You can estimate that range with our severance pay calculator.
If your layoff is genuinely temporary and your contract clearly allows it, your position is different. You are generally not paid during the layoff, but you may be entitled to continued benefits for a period and to recall within the ESA window. You can also usually apply for Employment Insurance, though how and when your severance is paid can affect the timing of those benefits.
When a layoff becomes a termination
A temporary layoff does not stay temporary forever. It becomes a termination, with full entitlements, when any of the following happens: the layoff runs past the ESA limit without a recall, your employer makes clear the work is not coming back, or the layoff was never one your contract permitted in the first place. In each of these situations you may be owed notice and severance as though you had been dismissed outright, because in law you have been.
Find out what your layoff is really worth
Use our free calculator to estimate your statutory minimum and your likely common law severance range, then have our team review it before you sign a release or accept a recall arrangement.
Estimate Your Severance Or call us: 1-800-771-7882What to do if you have been laid off
Read your employment contract
Check whether it actually gives your employer the right to lay you off. If it does not, the layoff may be a constructive dismissal you can act on.
Do not sign anything yet
Releases, severance offers, and recall agreements can permanently limit your rights. Once you sign a release, you generally cannot go back for more.
Document everything
Keep your layoff letter, your contract, and all communications, and note your start date, role, and any changes over time. These affect what you are owed.
Estimate and review your severance
Get a sense of your likely entitlement, then have it assessed against your specific circumstances rather than relying on the statutory floor.
Apply for Employment Insurance
If you are eligible, apply through Service Canada. Be aware that severance can affect when your benefits begin.
Mind the limitation period
In Ontario you generally have two years from the date of termination to bring a claim. Acting promptly protects your options.
Ontario layoff FAQs
Is a layoff the same as being fired in Ontario?
Often, yes. When people say they were laid off, they usually mean a permanent layoff, which is the same as being terminated, fired, or let go. A true temporary layoff, where you are expected to be recalled, is much less common. The two are treated very differently in law, which is why it matters to identify which one applies to you.
Can my employer lay me off without pay in Ontario?
The ESA allows temporary, generally unpaid layoffs in limited circumstances. But unless your contract clearly gives your employer the right to lay you off, doing so can be a constructive dismissal, meaning you may be able to treat it as a termination and claim severance rather than simply accepting an unpaid layoff.
Do I get severance if I am laid off in Ontario?
If your layoff is a termination, a constructive dismissal, or a temporary layoff that exceeded the ESA limit without a recall, you may be entitled to termination pay, statutory severance in some cases, and common law reasonable notice. Common law notice is usually well above the statutory minimum and depends on factors like your age, service, and role.
How long can a temporary layoff last in Ontario?
Under the ESA, a temporary layoff is generally up to 13 weeks of layoff in any period of 20 consecutive weeks. It can extend to up to 35 weeks in any period of 52 consecutive weeks if certain conditions are met, such as the employee continuing to receive benefits or certain payments. If the layoff exceeds the applicable limit without a recall, it generally becomes a termination dated to the first day of the layoff.
Can a temporary layoff be a constructive dismissal in Ontario?
Yes. Unless your contract authorizes a layoff or you agree to it, the common law generally treats a layoff as a fundamental change to your employment that you can refuse. In that case the layoff can be a constructive dismissal from the moment it is imposed, entitling you to notice and severance even though the layoff was within the ESA limits.
Can I collect EI if I am laid off?
If you are eligible, you can usually apply for Employment Insurance through Service Canada after a layoff. Severance pay does not eliminate EI eligibility, but the amount and how it is paid can postpone when your benefits start. It is worth getting advice on how a severance package is structured for this reason.
How Achkar Law helps employees
Achkar Law advises employees across Ontario on layoffs, terminations, constructive dismissal, and severance. If you have been laid off, we can tell you whether your layoff is really a termination, whether your employer had the right to impose it, and what you are actually owed, before you sign a release or accept a recall arrangement you may not have to.
Were you laid off in Ontario?
Our employment lawyers help employees understand whether a layoff is lawful and what their full entitlements are. Start with our severance pay calculator, then contact us for a confidential review before you sign anything.
Call us at 1-800-771-7882 or fill out the form below and we will be in touch.
In British Columbia instead? See our guide to temporary layoffs in BC and the 13-week rule.