Laid-off versus Terminated?

You may have heard the terms ‘termination’ and ‘lay-off’ used interchangeably in employment contexts. However, these terms have distinct legal meanings that are important to understand. The consequences of employment terminated vs laid-off differ significantly for employees.

This discussion focuses on non-unionized employees not subject to a collective bargaining agreement. A collective agreement can significantly influence the legality of temporary layoffs and employers’ obligations regarding notice and compensation.

What Is a Lay-Off?

A lay-off does not necessarily mean a permanent end to employment but suggests a temporary break with some potential for recall, typically without pay. Regular wages are often used as a benchmark for determining entitlement to pay during layoff periods.

What Is Termination?

Termination refers to the permanent end of employment. An employee who is terminated will either have been dismissed with or without cause. Upon termination, the employee is entitled to the statutory minimums as set out in the Employment Standards Act (Ontario), 2000, or according to the terms of their employment agreement, provided it is enforceable. If an employee does not receive what they are entitled to, they may be considered to have been wrongfully dismissed and could have a claim for damages.

When an employee is permanently terminated, they should be given reasonable notice (either through working notice or pay in lieu of notice). Unless the contract states otherwise, employees are generally entitled to common-law reasonable notice based on factors such as their age, position, years of service, and economic conditions at the time of dismissal. Long-term employees may require more notice or compensation instead of minimal legislative requirements.

The difference between employment terminated vs laid-off affects severance entitlements.

Can a Lay-Off Be Considered Wrongful Dismissal?

Now, you might wonder: Is an employee entitled to claim wrongful dismissal if they have been temporarily laid off instead of terminated?

The answer depends on whether the lay-off is legal or illegal.

Legal Considerations for Lay-Offs

The right to lay off an employee temporarily is not automatically provided by the Employment Standards Act (ESA). Instead, an employer must have the express right to lay off in the employment contract through a valid and enforceable term or have the right implied by industry standards. Additionally, the lay-off must comply with the duration limits set in the ESA. Employers must follow the basic rules surrounding temporary layoffs, including the obligation to provide notice to employees before a layoff occurs.

Constructive Dismissal and Being Laid-off

Generally, if an employer attempts to lay off an employee and advises them that they have not been terminated because they may be recalled later, but does not have the legal right to do so, the employer may be liable to a claim for constructive dismissal. This is because the lay-off constitutes a unilateral and fundamental change to the employment contract.

An employee may also have a claim for constructive dismissal if the temporary lay-off period exceeds the duration prescribed by section 56(2) of the Employment Standards Act. Employees with at least 12 consecutive months of continuous employment are entitled to specific benefits, including severance pay, upon termination of their employment.

Lay-Offs in Specific Industries

For specific categories of employees where lay-offs are an industry standard, such as construction employees, the right to lay off may be implied. These employees are explicitly exempted from the minimum notice and severance entitlements under the ESA. However, construction employees may still be entitled to reasonable notice under common law in some circumstances, and not all employees doing construction work fall under the legal definition of a ‘construction employee.’ Employers should also be aware of the specific rules that apply to group terminations when laying off a large number of employees.

Conclusion

In Ontario, understanding if you have had your employment terminated vs laid-off is crucial for both employees and employers. Terminations generally involve a permanent end to employment and come with specific entitlements under the law. Lay-offs, on the other hand, may be temporary but can still lead to legal claims if not handled properly.

If you are facing a lay-off or termination and are unsure of your rights, it is essential to consult with a knowledgeable employment lawyer. Legal guidance can help ensure that your rights are protected and that you receive the entitlements you are owed.

Contact Achkar Law – Your Lay-Off Lawyers in Ontario

If you are dealing with being laid-off versus a termination, Achkar Law is here to help. Our experienced lay-off lawyers can guide you through the complexities of your legal rights, ensuring that you receive the entitlements you deserve. Whether you’re an employer seeking compliance or an employee facing a lay-off, our team is prepared to provide strategic legal advice and representation.

Take the Next Step:

• Phone: 1 (800) 771-7882
• Email: [email protected]

Don’t face these challenges alone. Knowing your rights in an employment terminated vs laid-off situation is essential to ensure you’re not missing out on compensation or other protections.