Temporary Layoffs: Know Your Rights
Has your employer ever stopped giving you work without actually terminating your employment? Or perhaps your employer suddenly gives you fewer shifts? If so, then you may have been put on a temporary layoff.
A temporary layoff happens when an employer stops or significantly cuts back on the work they give to an employee without actually terminating their employment. An employee does not have to accept a temporary layoff unless temporary layoffs are permitted under their employment contract.[1] If there is no such term in their contract, the employee is entitled to consider the layoff as a permanent termination of their employment and seek their termination entitlements. For information on termination entitlements, please read our article from March 2024.
Employees on a termination layoff are left in a difficult situation: their income has suddenly been reduced or eliminated completely, but they have not received any termination pay or confirmation that they can search for a new job. Thankfully, Ontario’s Employment Standards Act (ESA) provides some protections and certainty to employees facing a temporary layoff.
Length of Temporary Layoffs
Under the ESA, a temporary layoff can only last a defined period of time, after which the employee can consider the layoff permanent and seek their termination entitlements.
In most cases, a temporary layoff is limited to 13 weeks in any period of 20 consecutive weeks. However, the ESA provides some exceptions to this general time limit for temporary layoffs. If one of the exceptions is met, the temporary layoff can last up to 35 weeks in a period of 52 consecutive weeks. For the exception to apply, one of the following exceptions must apply:
- The employee continues to receive “substantial payments” from their employer;
- the employer continues making payments for the benefit of the employee under a retirement plan or employee insurance plan;
- The employee receives “supplementary unemployment benefits” or would be entitled to receive said benefits if not for the fact that they are employed elsewhere during the layoff;
- The employer recalls the employee within a time approved by the Director of Employment Standards;
- Their is an agreement in place between the employee and employer regarding the length of the layoff; or
- The employee is represented by a union and their is an agreement in place covering the layoff.
These exceptions are usually interpreted on a case-by-case basis. If you are concerned that one of these exceptions applies to you, it is best to speak with a lawyer.
What to do if you are placed on a temporary layoff
First, if you are placed on a temporary layoff, consult your employment contract to confirm whether a temporary layoff is actually permitted. If your contract does not provide for temporary layoffs, you should consider whether you wish to treat the layoff as permanent or to wait and see if you will be called back to work. This is a difficult decision for many employees because even if they could be entitled to some compensation for their termination, they will be left unemployed without the hope of being recalled to work. If you are considering this option, you should seek legal advice before doing so.
Second, employees are generally eligible to receive Employment Insurance (EI) while on a temporary layoff. If your employment contract does permit temporary layoffs, or you consent to the layoff, you can apply for EI benefits so you can support yourself while you wait for the layoff to end. To file an application for EI, request your Record of Employment (ROE) from your employer to include with your application. Once you have your ROE, you can contact Service Canada to submit an application for EI.
Temporary layoffs are a complicated situation for most employees with few good options. It is always best to speak with a lawyer about your specific situation. However, knowing your rights when facing a temporary layoff can help you to protect yourself and assert your rights under Ontario’s laws.
This is legal information and not legal advice. If you need further information or need legal advice, please call our Intake Line at 416-441-1764 ext. 1 or complete our online Intake Form.
[1] Pham v. Qualified Metal Fabricators Ltd., 2023 ONCA 255 (CanLII).