With the current economic climate, temporary lay-offs are an increasingly common tool employers attempt to use to circumnavigate severance and termination notice rights. As an employment law firm, we at Monkhouse Law encounter issues with temporary lay-offs frequently. The Employment Standards Act, 2000 (“ESA”) and jurisprudence combine to give an overview of what is and isn’t legal in the sphere of temporary lay-offs.
Temporary layoffs are generally only allowed when in the contract
The case of Martellaci v. CFC/INX Ltd, 1997 CanLII 12327 (ON SC) set the standard that an employment contract must contain a right for the employer to temporarily lay-off the employee in order for an employer to be allowed to temporarily lay off an employee. If it is not contemplated by the contract then the temporary layoff is a constructive dismissal and the employee is owed wages during the length of the temporary layoff.
Employees who are temporarily laid off are generally entitled to common law notice of between 3 to 6 weeks per year of service.
In order to allow for a temporarily layoff a contract must:
- Specifically and directly allow for a temporarily layoff in the contract;
- The temporary layoff must comply with the Employment Standards Act, 2000;
- The Employer must comply with the layoff provision in the Contract;
- The Employee must receive benefits during the layoff period if over 13 weeks;
- The temporary layoff must be no longer than 35 weeks total.
Generally, temporary layoffs are meant to force employees to try to find new jobs and avoid severance pay. Almost all employees who are temporarily laid off are entitled to significant severance and their employer is merely hoping that they do not realize due to misleading references to the Employment Standards Act, 2000.
Ongoing Advice for Employers
As an employer, it is important that any temporary lay-offs which are implemented comply with Employment Standards. In order to ensure that your employment contracts and/or temporary lay-offs are compliant, it is wise to speak with an Employment Lawyer if you plan to engage in temporary layoffs.
Ongoing Advice for Employees
If you have been temporarily laid off there is a good chance that you are actually owed wages during your temporary layoff. Therefore it is important to contact an employment lawyer today in order to see if you can get some compensation for the time that you were forced to be off.