Understanding temporary layoffs in Ontario

When there’s a slowdown in business, you may want to consider temporarily laying off staff instead of terminating them. A temporary layoff is when an employer temporarily pauses the employment relationship with the intention of bringing the laid off staff back to work at a later date. A temporary layoff is not the same as termination of employment.

But it is important to temporarily lay off workers in compliance with the Ontario Employment Standards Act (ESA). And recalling staff correctly will help you avoid wrongful dismissal claims.

A temporary layoff helps employers manage fluctuating workforce needs without constantly terminating and hiring staff. Temporary layoffs allow you to retain already trained and skilled staff without wasting time and money on training new workers.

But if an employee is temporarily laid off for a period longer than the maximum time stated in the Ontario ESA, the employer will be considered to have permanently laid off or terminated the employee. The employee will then usually be entitled to termination pay.

If you need expert support, call our advisors today. They can help you make sense of Ontario’s ESA rules on temporary layoffs.

Rules for Temporary Layoffs in Ontario

In Ontario, a temporary layoff can last up to 13 weeks within a 20-week period or up to 35 weeks within a 52-week period in specific circumstances, such as if the worker continues to receive substantial payments or benefits. If a layoff exceeds the maximum time allowed under the ESA, it is deemed to be a termination of employment.

The ESA does not require employers to provide employees with written notice of a temporary layoff, nor are they required to provide a reason for the layoff. However, employment contracts should always contain a temporary layoff clause.

If you need help with staying complaint, call our HR experts. They are available 24/7 to support you.

What are the essential conditions for a temporary layoff to be legally valid?

There are specific conditions that an employer must meet to impose a temporary layoff legally. These include:

  • The right to temporarily lay off an employee must be included in the employee’s job contract.
  • The temporary layoff cannot exceed the maximum duration permitted by the ESA.

If these conditions are not met, the temporary layoff may be considered a termination of employment. In such a case, the employee may be entitled to termination and severance pay, if applicable.

Have more questions about temporary layoffs?

Our HR experts can help you understand Ontario’s rules on temporary layoffs and answer any questions you may have. We can help you stay compliant, avoid unnecessary fines, and set your business up for success.

Call our dedicated advice line today at 1 (833) 247-3650.