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Uncertainty surrounding COVID-19 continues to grow and the resulting social distancing and self-isolation directives bring new challenges to Canada’s workforce. Given the economic challenges that Canadian employers are facing, it is inevitable that many employers will decide to dismiss employees.

Employers, particularly in this climate, appear focused on the option of laying off employees rather than proceeding with a termination of employment.

What is a temporary layoff?

Layoffs are a temporary cost-saving measure implemented by employers. In contrast with a termination of employment, layoffs carry the possibility of a return to work. While the definition of a layoff varies depending on the province, it is generally understood as a period when an employer stops the employee’s work without the employment relationship formally ending. In most cases, and unless the employment contract states otherwise, the employee does not receive compensation during this period.

How long can a temporary layoff last?

In Ontario, there are two types of temporary layoffs, distinguished by the duration of time:

  • 1 day to a maximum of thirteen (13) weeks
  • Between thirteen (13) and a maximum of thirty (35) weeks

The main difference between these two layoffs is that, where a temporary layoff lasts longer than 13 weeks, an employer must continue to provide some payment to an employee who is on leave, such as a continuation of employee benefits. Specific rules relating to layoffs differ across Canada, including the specific length of leave and what, if anything, an employer must provide to an employee during the layoff period.

Do I have to accept a layoff?

No.

Not all circumstances are appropriate for a layoff.  Just because your employer may have decided to use this route does not mean that it is legal.  Specifically, in certain circumstances, an employee can claim that a layoff is not appropriate and that they should be provided with termination pay to support them in finding alternate employment.

What should employees know?

In short, there are two key takeaways.

First, not all employers can legally layoff their employees and it is possible a layoff could in fact be a constructive dismissal, entitling the employee to termination pay.

Second, if an employee is laid off for a period longer than is statutorily permitted (as set out above), the employer is considered to have terminated the employee. The employee would therefore again be entitled to termination pay, including severance pay, if applicable, as well as payments under the common law.

If you have any questions relating to your employment, including in relation to a temporary layoff, termination of employment, or if you have questions about being fired or wrongfully dismissed, please contact Toronto employment lawyersSultan Lawyers at mlahert@sultanlawyers.com or 416-214-2111.

This is our second blog post on employment issues related to the COVID-19 pandemic; you can view the first one here. We will continue to provide clarity relating to employment rights during the COVID-19 outbreak.


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