Layoffs in Ontario

Layoffs in Ontario: Your Rights as an Employee

Being laid off can feel sudden and overwhelming. Many employees are told a layoff is “temporary” or that there’s nothing they can do — but that’s not always true. In Ontario, layoffs are tightly regulated, and employers often get them wrong.

If you’ve been laid off, your rights depend on the facts, not just what your employer says.

What Is a Layoff in Ontario?

Employers often use the word “layoff” to soften the message of being fired, terminated, or let go. That wording can be misleading and creates confusion about whether the employment relationship has actually ended or is only on pause.

In Ontario, layoffs generally fall into two categories:

1. Temporary Layoff- A temporary pause in work where the employer indicates the employee may be recalled. Although the employment relationship technically continues during this period, the employee is effectively suspended from active work. In some cases, benefits may continue and compensation may be required if the layoff extends beyond certain limits. However, under Ontario common law, a temporary layoff is generally treated as a constructive dismissal unless the employment contract clearly permits layoffs.
2. Permanent Layoff (Termination)- A permanent end to the employment relationship. If the employer fails to provide proper notice or severance, this type of layoff may amount to a wrongful dismissal.

Are Temporary Layoffs Legal in Ontario?

Yes. Temporary layoffs are allowed in Ontario under the Employment Standards Act, 2000 (ESA), but only for limited periods and only if strict conditions are met. In most cases, a layoff can last up to 13 weeks in a 20-week period, or up to 35 weeks in a 52-week period if benefits continue. If these requirements are not met, the layoff is legally treated as a termination, which can trigger entitlement to termination pay and severance pay.

Even if a temporary layoff complies with the ESA, that does not automatically make it lawful. Under Ontario common law, a temporary layoff may still be considered a constructive dismissal unless the employment contract clearly allows the employer to impose layoffs.

Maximum Length of a Temporary Layoff in Ontario

• Up to 13 weeks within any 20-week period, or

• Up to 35 weeks within any 52-week period, but only if certain conditions are met, such as:
  • The employer continues to make substantial payments to the employee
  • The employer continues contributing to the employee’s benefits or pension plan during the layoff
  • The employee receives supplementary unemployment benefits
  • For non-unionized employees, the employer recalls the employee within the timeframe set out in an agreement between the parties

Your Rights After a Layoff in Ontario

If you’ve been laid off, you may have legal entitlements that include:

• Severance pay. Use our severance calculator to get an estimate of what you may be owed.
• Notice of termination or pay in lieu of notice
• Continued benefits in certain situations
• Employment Insurance (EI) benefits

What to Do if You’ve Been Laid Off

If you’ve been laid off, what you do next can affect your legal rights and potential compensation. Taking the right steps early can make a meaningful difference.

1. Don’t sign anything right away – Layoff letters, acknowledgements, or agreements can limit your rights if signed without review.
2. Get everything in writing – Ask whether the layoff is temporary or permanent, how long it is expected to last, and whether benefits will continue.
3. Track timelines carefully – The length of a layoff matters under Ontario law, and missing key dates can change your entitlements.
4. Apply for EI if needed – Employment Insurance can provide income support while your situation is being assessed.
5. Speak with an employment lawyer– An employment lawyer can review your situation and confirm whether the layoff is valid, whether it amounts to a termination, and what compensation you may be entitled to.

Speak With an Employment Lawyer Today

If you’ve been laid off, timing matters. Roberts & Obradovic Law helps employees across Ontario understand their rights, avoid costly mistakes, and pursue fair compensation after a layoff.

We can review your layoff, determine whether it legally amounts to a termination or constructive dismissal, and advise you before you sign anything. When appropriate, we deal directly with your employer to pursue fair severance, notice, and continued benefits. Whether you’re facing a temporary layoff, a failed recall, or a wrongful dismissal, we’ll help you understand your options and protect your rights.

Call us at 647-724-5179 or book a consultation online to review your situation and understand your options under Ontario law.