Experiencing a layoff in Canada can be a daunting and uncertain time. At Monkhouse Law Employment Laywers, we understand the complexities involved and are here to provide you with essential information and legal support. If you’re facing a Canada layoff, knowing your rights and the legal framework can make a significant difference.
What Is Considered a Layoff in Canada?
It is common for people to refer to being “fired” as a “layoff” when the company alleges that it is because of a lack of work (in part or in whole). This creates confusion with temporary layoffs, which are exceptionally uncommon (except during COVID-19). The word “layoff” is usually more often used as a euphemism for terminated, fired, let go, etc.
In Canada, the term “layoff” is often used interchangeably with “termination,” creating confusion. There are two types of layoffs: temporary and permanent.
- Temporary Layoff: A temporary reduction in workforce, with the expectation that employees will return to work when business conditions improve. Unlike termination, a layoff often implies the possibility of returning to work when conditions improve. The employee is generally not entitled to pay during the layoff period.
- Permanent Layoff (Termination): A permanent end to the employment relationship, often referred to as being “fired,” “terminated,” or “let go.” This can happen due to lack of work, restructuring, or other reasons. A permanent layoff may be referred to as a “wrongful dismissal”.
Is a Temporary Layoff Allowed in Canada?
A temporary layoff is legal in Canada under minimum employment standards legislation. It allows employers to reduce their workforce for a short period without permanently terminating employment. During a temporary layoff, the employment relationship should be maintained, and the employer may recall the employee back to work within the specified timeframe.
However, under the judge-made law, called the common law, employers generally do not have the right to layoff employees. A layoff is a termination of employment under common law or a “constructive dismissal” the very instant the employee is laid off, unless there are contractual terms that allow the layoff or the employee agrees to the layoff.
How Long is a Temporary Layoff in Canada?
The length of time a temporary layoff differs depending on your province or territory. In Ontario, for instance, a temporary layoff is generally defined under the Employment Standards Act (ESA) as lasting no more than 13 weeks in any period of 20 consecutive weeks. If the layoff exceeds this period without recalling the employee, it may be considered a termination, entitling the employee to severance pay and other termination benefits.
Employee Rights During a Canada Layoff
Severance Pay: If the layoff is a termination or a constructive dismissal or the employees are not recalled as required by the applicable legislation, employees laid off in Canada may be entitled to severance pay or common law notice based on their length of service, age, the size of the employer’s payroll, and other factors. To get an idea of your potential severance owed go to: Severance Pay Calculator Ontario
If the layoff is temporary and specifically allowed in the contract, and conforms with the applicable minimum standards legislation, the employee may be entitled to:
- Notice: In certain jurisdictions, such as Alberta or federally, notice of the temporary layoff is required in certain circumstances.
- Benefits Continuation: During a temporary Canada layoff, certain benefits, such as health insurance, may continue for a specified period, depending on the legislative requirements, terms of the employment contract and company policies.
- Recall Rights: If the layoff is temporary, employees may have the right to be recalled to work within a certain period, usually defined by provincial laws or collective agreements. If the employee is not recalled during the prescribed time, then the employment is terminated and the employee is entitled to severance pay.
It is important to keep in mind that a temporary layoff may turn into a termination of employment if the legislative requirements are not respected.
Employer Obligations During a Canada Layoff
- Compliance with Legislation: Employers must comply with federal and provincial employment laws regarding notice, severance, and other layoff-related matters in Canada.
- Providing Notice of Temporary Layoff: When required by legislation, adequate notice of temporary layoff must be given to employees, either in writing or through pay in lieu of notice, as per legal requirements in Canada.
- Fair Treatment: Employers should treat employees fairly and consistently, ensuring that layoffs are conducted without discrimination or unjust dismissal in Canada.
- Documenting the Process: Proper documentation is crucial during layoffs in Canada. Employers should maintain records of notices given, reasons for layoffs, and any communications with employees.
Steps to Take if You Are Laid Off in Canada
- Review Your Employment Contract: Understand the terms and conditions related to layoffs, notice periods, and severance pay in Canada.
- Seek Legal Advice: Consult with an employment lawyer to ensure your rights are protected, and you receive fair compensation during your Canada layoff.
- Apply for Employment Insurance (EI): If eligible, apply for EI benefits through Service Canada to receive financial support during your layoff period in Canada.
- Stay Informed: If you were temporarily laid off, keep up-to-date with your employer’s communications regarding the status of your employment and any potential recall dates during your Canada layoff.
Monkhouse Law and Layoffs in Canada
Monkhouse Law helps employees navigate their layoffs and have won numerous court cases.
Contact Monkhouse Law Employment Lawyers
If you have been laid off in Canada or are facing a potential layoff, it’s crucial to understand your rights and options. Monkhouse Law specializes in employment law and can provide expert guidance and representation.