Temporary Layoff Ontario: What You Need To Know

Temporary layoff Ontario


If you are searching for temporary layoff Ontario then you may be in this difficult situation, or are concerned that you may soon to be in this situation. In Ontario, a large proportion of the workforce has experienced or will be experiencing temporary layoffs due to COVID-19. Furthermore, provincial changes to employment legislation due to COVID-19 has dramatically changed the legalities of temporary layoffs in Ontario. But what exactly does a temporary layoff mean? Read on to find out more about what it means, and what you can do if you are in this situation.

What is a temporary layoff?

A temporary layoff is when the employer cuts back or stops an employee’s work without ending his or her employment. Despite this interruption of work and compensation, the parties treat the employment relationship as ongoing, with the understanding that work and compensation may resume in the future. A temporary layoff, unlike “termination” and “dismissal”, does not refer to the end of the employment relationship. However, if the temporary layoff is not allowed in the employment contract, it may result in constructive dismissal.

What if you don’t want to go back to work after the temporary layoff? If the employee does not come back to work after a legal temporary layoff, this may amount to job abandonment.

Can I collect EI on a temporary layoff?

Employees may be eligible to collect EI during a temporary layoff. A Record of Employment (ROE) must be issued for each employee that is on a temporary layoff. Employees may qualify to receive Regular EI benefits to cover the layoff period. For more information for employees, visit the Regular EI Benefit program.

Do employers have to provide notice of a temporary layoff?

No, unlike a termination, employers in Ontario do not have to provide notice, a temporary layoff is effective immediately.

How long is a temporary layoff in Ontario?

Under normal circumstances, prior to COVID-19, temporary layoffs could last up to 13 weeks in a consecutive 20-week period. If this amount of time is exceeded, it would be considered a constructive dismissal, unless the employer provides substantial payments to the employee. However, even with substantial payments, the layoff cannot exceed 35 weeks in a consecutive 52-week period.

On September 3, 2020, the Ontario government introduced Regulation 492/20 to the Employment Standards Act, and subsequently amended the Regulation, which allows employers to keep employees on temporary layoff until July 3, 2021, if the layoff is due to reasons related to the COVID-19 pandemic. However, those affected by the reduction in hours or temporarily laid off will still have access to judge-made remedies, such as constructive dismissal and breach of contract at common law.

A 2021 recent decision from the Ontario Superior Court, Coutinho v. Ocular Health Centre Ltd., 2021 ONSC 3076,  confirms that the regulation does not take away the employee’s common law right to sue for constructive dismissal. This means that employees who were temporarily laid off may still be entitled to compensation. Additionally, in another recent 2021 decision, Ristanovic v Corma, 2021 ONSC 3351, the Ontario Superior Court found that two employees, aged over 60 with nearly three decades seniority, were entitled to 22 months’ notice following their temporary layoff in February 2020, at the beginning of the pandemic.

Do you lose your benefits if you are on a temporary layoff?

If a temporary layoff is shorter than 13 weeks, employers do not need to continue benefits or pension plans throughout the temporary layoff period. For layoffs up to 35 weeks, employers should generally receive substantial payments or benefits under their benefit plan. However, if the layoff is due to COVID-19 related reasons, the layoff is converted into an unpaid job-protected leave which may last until July 3, 2021.

What are my options if I am on a temporary layoff in Ontario?

To recap, if you are on a temporary layoff in Ontario, you should consider applying for EI and contact Service Canada. Then, depending on the circumstances you may have the following options:

  1. Is the layoff due to COVID-19 related reasons? If yes then, until July 2, 2021 you may be placed on an unpaid job-protected emergency leave. You may have the option to claim constructive dismissal as a result of the breach of your employment contract.
  2. Is the layoff not due to COVID-19 related reasons? Then you should check with an employment lawyer to confirm whether your employment contract allows for a temporary layoff and whether the layoff period is in accordance with the law.
  3.  Are you sick to the point that you are unable to return to work? Then you should explore whether you have short-term or long-term disability coverage.

Monkhouse Law specializes in employment law. If you have been temporarily laid off, contact us to ensure that your rights are protected.

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