If you have been temporarily laid off in Ontario, you may be wondering how long your employer can keep you off work and what happens if you are never called back.
A temporary layoff can become a permanent termination if your employer ends your employment or the layoff exceeds the limits established by Ontario’s Employment Standards Act, 2000 (ESA).
However, employees may have rights before those time limits expire. If your employer did not have the contractual right to temporarily lay you off, you may have grounds to claim constructive dismissal and pursue compensation.
Understanding when a temporary layoff becomes a termination is important, particularly if your employer has offered you a severance package or has stopped communicating about your return to work.
When Does a Temporary Layoff Become Permanent in Ontario?
A temporary layoff may become a termination in Ontario when:
- Your employer tells you that your employment is ending permanently.
- Your temporary layoff exceeds the applicable limits under the ESA.
- Your employer closes the business or eliminates your position and ends your employment.
- Your employer imposes a temporary layoff without the contractual right to do so, potentially resulting in constructive dismissal at common law.
The important distinction is that a temporary layoff may become a termination under the ESA even if your employer has not formally dismissed you.
However, a layoff that complies with the ESA may still amount to constructive dismissal under the common law.
How Long Can a Temporary Layoff Last Before It Becomes a Termination?
Ontario’s Employment Standards Act, 2000 establishes the circumstances in which a layoff is considered temporary rather than a termination.
Temporary Layoffs of Up to 13 Weeks
Generally, a temporary layoff can last up to 13 weeks in any period of 20 consecutive weeks.
The weeks of layoff do not necessarily have to be consecutive. The ESA contains rules for determining when an employee is considered to be on layoff during a particular week.
Temporary Layoffs of More Than 13 Weeks
Under certain conditions, a temporary layoff may extend beyond 13 weeks, provided it remains less than 35 weeks in any period of 52 consecutive weeks.
These conditions may include continued substantial payments, qualifying benefit or pension contributions, supplementary unemployment benefits or an approved recall arrangement.
Employers cannot automatically extend a temporary layoff simply by promising to recall an employee.
Extended Temporary Layoffs Under Ontario’s Updated Rules
Ontario introduced additional extended temporary layoff provisions effective November 27, 2025.
Under these rules, certain non-unionized employees and employers may enter into a written agreement allowing a temporary layoff to last 35 or more weeks in a 52-week period, provided it remains less than 52 weeks in any 78 consecutive weeks.
The agreement must meet the statutory requirements, and the employer must obtain approval from the Director of Employment Standards.
These extended layoff provisions do not give every employer an automatic right to keep an employee off work for that length of time.
For a more detailed explanation of the time limits, contractual rights and benefits requirements, read our guide to temporary layoff rules and employee rights in Ontario.
The Ontario government also explains these requirements in its guide to termination of employment and temporary layoffs.
What Happens When a Temporary Layoff Exceeds the ESA Limits?
When a temporary layoff exceeds the applicable ESA limits, the employee is generally considered to have been terminated for the purposes of the ESA.
Under section 56 of the ESA, the termination is generally treated as having occurred on the first day of the layoff.
This can affect the employee’s entitlement to statutory termination pay and, where the eligibility requirements are satisfied, statutory severance pay.
For example, if an employee is temporarily laid off and the employer does not satisfy the conditions permitting a longer layoff, exceeding the applicable statutory period may result in a deemed termination.
Employees should not assume that they must wait until the maximum permitted layoff period expires before obtaining legal advice. Their common law rights may arise earlier.
Can My Employer Permanently Terminate Me During a Temporary Layoff?
Yes. An employer may decide to permanently terminate an employee during a temporary layoff rather than recalling them to work.
For example, an employer may initially expect a temporary reduction in business but later determine that the employee’s position will not be restored.
If the employer terminates the employee without cause, the employee may be entitled to statutory termination pay, statutory severance pay where applicable and potentially compensation for wrongful dismissal at common law.
The amount depends on the employment agreement, length of service and other relevant circumstances.
Employees should review any proposed severance package before signing a release or accepting a final settlement.
Can a Temporary Layoff Be Constructive Dismissal Before It Becomes Permanent?
Yes. An employee may have a constructive dismissal claim even before a temporary layoff exceeds the ESA’s time limits.
Under Ontario common law, employers generally require a contractual right to impose a temporary layoff. Without that right, temporarily stopping an employee’s work and pay may amount to a substantial unilateral change to the employment relationship.
In E. v. Cambridge Spring Service (2001) Ltd., 2011 ONCA 831, the Ontario Court of Appeal addressed the distinction between temporary layoffs under the ESA and the contractual right to impose a layoff at common law.
The decision illustrates why an employer’s compliance with the ESA does not necessarily resolve whether the layoff amounts to constructive dismissal.
An employee who has been constructively dismissed may be entitled to pursue wrongful dismissal damages, depending on their employment contract and circumstances.
Learn more about constructive dismissal in Ontario.
How Much Severance Pay Can I Receive After a Temporary Layoff?
If your temporary layoff becomes a termination, your compensation may depend on three different legal entitlements: ESA termination pay, ESA severance pay and common law reasonable notice.
Termination Pay Under the ESA
Eligible employees who are terminated without the required working notice may be entitled to termination pay under the ESA.
For employees with at least three months of continuous employment, the minimum notice generally increases with length of service, up to eight weeks for employees with eight or more years of service.
Different requirements may apply in certain circumstances, including mass terminations.
Statutory Severance Pay
Statutory severance pay is separate from termination pay under the ESA.
Generally, an employee must have at least five years of employment and meet additional statutory requirements, such as the employer having a global payroll of at least $2.5 million or the severance resulting from a qualifying permanent discontinuance of business.
Eligible employees may receive one week’s regular wages for each completed year of employment, plus a proportionate amount for a partial year, up to a maximum of 26 weeks.
Not every terminated employee qualifies for statutory severance pay.
Common Law Reasonable Notice
Some employees may be entitled to compensation beyond the ESA minimums if their employment contract does not contain an enforceable provision limiting their termination entitlements.
Common law reasonable notice is assessed based on several factors, including:
- The employee’s length of service.
- The employee’s age.
- The nature of the employee’s position.
- The availability of comparable employment, considering the employee’s experience, training and qualifications.
There is no fixed formula that guarantees a particular number of weeks or months of compensation for every year of service.
For more information, read Am I Entitled To Severance Pay?
You can also review the Ontario government’s guidance on termination of employment and statutory severance pay.
What If My Employer Never Calls Me Back After a Temporary Layoff?
If your employer does not recall you and the layoff exceeds the applicable ESA limits, your employment may be deemed terminated under the ESA.
However, employees should not assume that the absence of a recall automatically determines their common law rights.
Whether you have a constructive dismissal claim may depend on your employment agreement, the circumstances of the layoff and your employer’s actions.
If your employer has stopped communicating, repeatedly postponed your recall date or indicated that your position may no longer exist, consider obtaining legal advice about your employment status and potential entitlements.
What If My Employer Offers to Recall Me After the Layoff?
If your employer offers to recall you, your decision to return or refuse the offer may affect your legal rights.
Even where a temporary layoff was unauthorized and amounted to constructive dismissal, an employee may have an obligation to take reasonable steps to reduce their financial losses.
In B. v. Gracious Living Corporation, 2016 ONSC 4127, the court considered an employee’s refusal to return to work following an unauthorized temporary layoff.
The decision illustrates how an employee’s duty to mitigate damages can affect compensation following constructive dismissal.
Before refusing a recall offer or resigning during a temporary layoff, consider speaking with an employment lawyer about the possible consequences.
What Should I Do If My Temporary Layoff Becomes Permanent?
If your employer has permanently terminated your employment or your temporary layoff has exceeded the applicable statutory limits, consider taking the following steps:
- Request written confirmation. Ask your employer to confirm your employment status, termination date and any proposed compensation.
- Review your employment agreement. The terms of your contract may affect your entitlement to compensation.
- Review any severance package. Do not assume the amount offered represents everything you may be entitled to receive.
- Keep employment records. Save your layoff notice, pay statements, benefits information and communications about recall or termination.
- Consider Employment Insurance. If you have not already applied, review the Government of Canada’s EI eligibility requirements.
- Obtain legal advice before signing a release. An employment lawyer can assess whether the termination and proposed compensation comply with your legal entitlements.
Key Takeaways for Employees
- A temporary layoff may become a termination if the employer permanently ends the employment relationship or the layoff exceeds the applicable ESA limits.
- Ontario’s ESA includes different temporary layoff periods and conditions, including extended layoff provisions introduced in November 2025.
- A temporary layoff may amount to constructive dismissal before the ESA time limits expire if the employer lacks the contractual right to impose it.
- Employees may qualify for ESA termination pay, statutory severance pay and potentially common law wrongful dismissal damages.
- Refusing a recall offer or resigning during a layoff can affect an employee’s rights and potential compensation.
- Employees should consider obtaining legal advice before accepting a severance package or signing a release.
Speak With an Ontario Employment Lawyer About Your Temporary Layoff
If your temporary layoff has become permanent, or you are unsure whether your employer can legally keep you off work, understanding your rights can help you make informed decisions.
Monkhouse Law represents employees in Ontario employment law matters, including temporary layoffs, constructive dismissal, wrongful dismissal and severance pay disputes.
Our employment lawyers can review your employment agreement, assess your circumstances and help you understand the compensation you may be entitled to pursue.
Contact Monkhouse Law Employment Lawyers to discuss your temporary layoff or termination.