temporary layoff in ontario, termination, workplace lawyers

Everything you Need to Know About Temporary Layoff in Ontario

During the COVID-19 pandemic, we received countless questions from employers and employees about temporary layoffs in Ontario. The Ontario government also amended the Employment Standards Act (“ESA”) to address some of the new challenges arising from the pandemic. Below are some of the most frequent questions we receive about temporary layoffs in Ontario.

What is a Temporary Layoff in Ontario?

A temporary layoff in Ontario is where an employer stops the employee’s work (or reduces his/her hours significantly) without ending the employment relationship. It allows the employer to disrupt an employee’s work and compensation, for a limited amount of time, without owing the employee the entitlements s/he would receive upon termination.

An employee may be temporarily laid off for a variety of reasons such as restructuring, seasonal nature of the work, or economic hardship of the employer.

How Long Can a Temporary Layoff Last?

Employment standards legislation outlines the maximum amount of time a temporary layoff can last.

Prior to COVID-19, the ESA outlined that a temporary layoff could last for a maximum of 13 weeks in a consecutive 20-week time period. A layoff longer than this could amount to constructive dismissal, based on the circumstances. For example, an employer may extend the layoff beyond 13 weeks where it meets certain conditions, such as providing the employee with substantial payments and continues to make payments for his/her benefits, among other things. However, A temporary layoff could not last longer than 35 weeks in 52-week time period.

Due to the hardships faced by employers during the pandemic, the Ontario government introduced a regulation under the ESA allowing employers to extend the time period an employee is on a temporary layoff beyond the limits in the ESA. Currently, employees may remain on temporary layoff until July 3, 2021 (provided that the government does not make further extensions).

Prior to the pandemic, regulations under the Canada Labour Code allowed federal employers to lay off federal employees for up to 3 months without a recall date, or up to 6 months, where the employee is provided with a written notice outlining his/her expected date of recall. However, the government also made similar amendments as federal legislation to extend the time period a temporary layoff is permitted.

What is the Difference Between a Temporary Layoff and a Permanent Layoff?

In contrast to a temporary layoff, a permanent layoff ends the employment relationship. Accordingly, an employee may seek their entitlements upon termination if their layoff is permanent, as one may upon termination.

Does Your Employer Need to Provide Notice for a Layoff?

There is no legislated requirement for an employer to provide an employee with advance notice before a layoff.

However, it is important to know that an employer does not have an unequivocal right to layoff its employees. There must be an agreement by the employee, such as through a term in his/her employment contract, that gives the employer the power to layoff that employee. Where there is no such agreement, the employer unilaterally imposing a temporary layoff could amount to a constructive dismissal.

How Do You Return to Work From a Temporary Layoff?

Although some provinces have specific requirements on how an employer is to recall an employee to work, there are no legislated requirements in Ontario. Therefore, employers in Ontario do not have to provide a specific amount of notice before recalling employees to work. It is good practice to ensure that employees are provided with sufficient information to feel safe and comfortable returning to work.

There are a variety of factors for consider when employees are returning to work. Generally, employees should be recalled to the same job and terms they enjoyed prior to the temporary layoff. However, there may be times when employee may need to be recalled to a different position. If this is the case, seek legal advice to avoid a potential claim of constructive dismissal.

When recalling employees, it is important to consider that some employees may not want to or be able to return right away. An employee may have found a new position or remain unable to return due to personal circumstances. Some employees are issuing work refusals in relation to the pandemic. If this is the situation, we recommend seeking legal advice on an employer’s duties and an employee’s rights.

Conclusion

This is a snapshot of the types of the questions we receive from employers and employees during this unprecedented time. Considering the novelty of the challenges created by the pandemic, it is always prudent to seek legal advice when navigating through this uncharted territory.

Contact Us 

If you are an employer and need help temporarily layoff employees, or an employee who has been temporarily laid off and have questions pertaining to your layoff, our team of experienced workplace lawyers at Achkar Law can help. Contact us by phone toll-free at +1 (800) 771-7882 or email us at [email protected] and we would be happy to assist.

If you are a small or medium-sized company looking for full-service support with same day response, visit our CLO Program page for our strategic solutions.