If you have been temporarily laid off in Ontario, you may be wondering whether you still have a job, how long your employer can keep you off work and whether you are entitled to severance pay.
Ontario’s Employment Standards Act, 2000 (ESA) sets out rules for temporary layoffs. However, employers do not automatically have the legal right to temporarily lay off employees simply because the ESA recognizes temporary layoffs.
Depending on your employment contract and the circumstances, a temporary layoff may amount to constructive dismissal, potentially entitling you to compensation.
Understanding your rights is important before accepting a temporary layoff, agreeing to an extension or deciding whether to return to work.
What Is a Temporary Layoff?
A temporary layoff occurs when an employer reduces or stops an employee’s work without immediately ending the employment relationship.
For example, an employer may temporarily lay off employees because of a shortage of work, reduced business activity or financial difficulties.
During a temporary layoff, the employer generally expects the employee to return to work in the future. However, the fact that a layoff is described as temporary does not necessarily mean that it is lawful.
Under Ontario employment law, a temporary layoff may constitute constructive dismissal if the employer does not have the contractual right to impose it.
Can My Employer Temporarily Lay Me Off Without My Consent?
Employers in Ontario do not have an automatic right to temporarily lay off employees.
Generally, an employer must have a contractual basis for imposing a temporary layoff. This may arise from an express term in an employment contract or, in certain circumstances, an implied term of employment.
If your employer does not have that right, placing you on a temporary layoff may constitute a substantial change to your employment terms and amount to constructive dismissal.
What If My Employment Contract Does Not Allow Temporary Layoffs?
If your employment contract does not contain a temporary layoff provision, your employer may not have the right to impose a layoff.
Ontario courts have addressed this distinction in several employment law decisions.
In E. v. Cambridge Spring Service (2001) Ltd., 2011 ONCA 831, the Ontario Court of Appeal considered the relationship between the ESA’s temporary layoff provisions and an employee’s common law rights.
The Court confirmed that, absent an agreement to the contrary, an employer generally does not have the right at common law to unilaterally lay off an employee.
In M. v. CIMA Canada Inc., 2016 ONSC 1925, the court considered whether an employer had an implied right to temporarily lay off employees.
The decision illustrates that an employer cannot necessarily rely on previous layoffs involving other employees or general industry practices to establish an implied contractual right.
Whether a temporary layoff is permitted depends on the employment agreement, workplace circumstances and applicable law.
How Long Can a Temporary Layoff Last in Ontario?
Ontario’s ESA establishes time limits for temporary layoffs. The permitted duration depends on the circumstances and whether additional statutory requirements are satisfied.
Temporary Layoffs of Up to 13 Weeks
Under section 56 of the ESA, a temporary layoff can generally last up to 13 weeks of layoff in any period of 20 consecutive weeks.
The weeks of layoff do not necessarily have to be consecutive. The ESA contains specific rules for determining which weeks count as weeks of layoff.
Temporary Layoffs of More Than 13 Weeks
In certain circumstances, a temporary layoff may last more than 13 weeks in a 20-week period, provided it remains less than 35 weeks in any period of 52 consecutive weeks.
At least one of the additional conditions set out in the ESA must be satisfied. Depending on the circumstances, these may include:
- The employee continues to receive substantial payments from the employer.
- The employer continues payments under a qualifying group insurance, retirement or pension plan.
- The employee receives supplementary unemployment benefits.
- The employee qualifies for supplementary unemployment benefits but is employed elsewhere.
- The employer recalls the employee within a timeframe approved by the Director of Employment Standards.
- The employee is recalled within a timeframe permitted under an applicable agreement.
Employers cannot automatically extend a temporary layoff simply by promising to recall an employee at a later date.
Extended Temporary Layoffs Under Ontario’s New Rules
Effective November 27, 2025, Ontario introduced additional rules allowing certain non-unionized employees and employers to agree to an extended temporary layoff.
Under these provisions, a temporary layoff may last 35 or more weeks in a period of 52 consecutive weeks, provided it remains less than 52 weeks in any period of 78 consecutive weeks and the applicable requirements are met.
The employee and employer must enter into a written agreement, and the employer must obtain approval from the Director of Employment Standards.
Before entering into the agreement, the employee must receive specified written information, including the latest intended recall date and a statement that the agreement cannot be withdrawn once entered into.
Different provisions may apply to employees represented by a trade union.
For the full requirements, see the Ontario government’s guide to temporary layoffs and termination of employment.
Important: Even if a temporary layoff complies with the ESA’s time limits, it may still constitute constructive dismissal if the employer does not have the contractual right to impose it.
Do Employers Have to Provide Notice of a Temporary Layoff?
Under Ontario’s ESA, employers are generally not required to provide advance written notice of a temporary layoff or explain the reason for it.
However, an employment contract or collective agreement may impose additional obligations.
The absence of an ESA notice requirement does not mean that an employer automatically has the right to temporarily lay off an employee. An unauthorized layoff may still result in constructive dismissal.
Do You Lose Your Benefits During a Temporary Layoff?
Whether your employer must continue your health benefits, insurance coverage or pension contributions during a temporary layoff depends on the circumstances.
For a temporary layoff of up to 13 weeks in a 20-week period, the ESA’s temporary layoff provisions do not generally require an employer to continue benefits solely to maintain the layoff’s temporary status.
For certain longer layoffs, continued payments under a qualifying insurance or pension plan may be one of the conditions allowing the layoff to remain temporary under the ESA.
Your employment contract, benefit plan or other legal obligations may provide additional rights.
If your employer stops your benefits during a temporary layoff, consider reviewing your employment agreement and obtaining legal advice about your options.
Can I Collect EI During a Temporary Layoff?
Employees who are temporarily laid off may qualify for Employment Insurance (EI) regular benefits if they meet the eligibility requirements.
EI provides temporary financial assistance to eligible employees who have lost their employment through no fault of their own and are available for and actively seeking work.
When an employee experiences an interruption of earnings, the employer is generally required to issue a Record of Employment (ROE) in accordance with Service Canada’s requirements.
You can apply for EI even if your employer has not yet issued your ROE.
Receiving EI does not, by itself, determine whether your temporary layoff was lawful or whether you may have a constructive dismissal claim.
For eligibility requirements and application information, visit the Government of Canada’s EI Regular Benefits page.
Can a Temporary Layoff Be Constructive Dismissal?
Yes. A temporary layoff may amount to constructive dismissal if an employer makes a substantial unilateral change to an employee’s employment terms without having the contractual right to do so.
For example, an employee who has worked continuously for an employer may have a constructive dismissal claim if the employer suddenly stops providing work and pay without contractual authorization.
In some circumstances, the employee may be entitled to pursue compensation for wrongful dismissal.
However, constructive dismissal is not automatic in every temporary layoff situation. The employment contract, workplace history and surrounding circumstances must be considered.
What If You Wait Before Challenging a Temporary Layoff?
Employees should be cautious about waiting too long before determining whether to challenge a temporary layoff.
Depending on the circumstances, an employer may argue that an employee accepted or condoned a change to their employment terms.
In K. v. Idera Inc., 2016 ONSC 3799, a case involving Monkhouse Law, the Divisional Court considered an employee’s temporary layoff and whether the employee had accepted the change.
The Court set aside a lower court decision that had dismissed the employee’s claim based on acquiescence without properly examining the employment contract.
The decision highlights the importance of considering the employment agreement and the circumstances surrounding a temporary layoff.
If you have been temporarily laid off and are uncertain whether to challenge the decision, seeking legal advice promptly can help you understand your rights.
When Does a Temporary Layoff Become a Termination?
A temporary layoff may become a termination under the ESA when it exceeds the applicable statutory limits.
When this occurs, an employee may become entitled to termination pay and, if the statutory requirements are met, severance pay.
However, an employee may have a constructive dismissal claim before the ESA’s temporary layoff period expires if the employer did not have the contractual right to impose the layoff.
Termination pay under the ESA, statutory severance pay and common law wrongful dismissal damages are different legal entitlements. Eligibility and compensation depend on the circumstances.
For more information, read When a Temporary Layoff Becomes a Termination in Ontario.
What If My Employer Calls Me Back to Work?
If your employer recalls you following a temporary layoff, your rights and obligations may depend on whether the layoff was authorized and the circumstances of the recall.
In some situations, refusing to return to work after a lawful temporary layoff could have consequences, including a potential allegation of job abandonment.
However, employees who have experienced constructive dismissal may have different legal rights.
In B. v. Gracious Living Corporation, 2016 ONSC 4127, the court considered an unauthorized temporary layoff and the employee’s refusal to return when recalled.
Although the layoff constituted constructive dismissal, the employee’s refusal to return to suitable employment affected the damages awarded because of the duty to mitigate losses.
The case illustrates why employees should understand the potential legal consequences before refusing an offer to return to work.
What Are My Rights If I Am Temporarily Laid Off in Ontario?
If you have been temporarily laid off, consider the following steps:
- Review your employment contract. Determine whether it contains a provision allowing temporary layoffs.
- Confirm the details of your layoff. Keep written notices, emails and communications from your employer, including information about a possible recall date.
- Review your benefits. Find out whether your employer intends to continue insurance coverage or pension contributions.
- Consider applying for EI. You may qualify for EI regular benefits while you are without work.
- Keep records. Document communications with your employer and any changes to your employment conditions.
- Seek legal advice before making important decisions. An employment lawyer can review whether the layoff was permitted and explain your options.
Speak With an Ontario Employment Lawyer About a Temporary Layoff
Being told that your layoff is temporary does not necessarily mean your employer has the legal right to stop providing you with work or pay.
Monkhouse Law represents employees in Ontario employment law matters, including temporary layoffs, constructive dismissal, wrongful dismissal and severance pay disputes.
If you have been temporarily laid off, our employment lawyers can review your circumstances, explain your rights and help you understand your available options.
Contact Monkhouse Law Employment Lawyers to discuss your temporary layoff.