Your Rights When You're Laid Off in Ontario
A temporary layoff is not automatically legal. Depending on your contract, it can amount to termination. Here is how to tell which one you are dealing with.
Key takeaways
- A "temporary" layoff is not automatically legal. Unless your contract allows it or you agree, a layoff can be a constructive dismissal.
- If the layoff is a constructive dismissal, you can treat yourself as terminated and claim full severance.
- The ESA limits how long a layoff can last before it becomes a termination, generally 13 weeks in any 20, extendable to about 35 weeks with continued benefits.
- Even within those ESA limits, if your contract never gave the employer the right to lay you off, the layoff itself can be a dismissal.
- You usually have to act within a reasonable time, so get advice rather than waiting indefinitely to be recalled.
In this article
Being laid off feels temporary, like the job is paused rather than ended. But in Ontario, a layoff is a surprisingly powerful legal event. Done without the right to do it, a layoff can amount to a termination that entitles you to full severance, even though no one used the word "fired."
✅Quick answer. A temporary layoff is only lawful if your employment contract allows it, or you agree to it. If neither is true, the layoff can be a constructive dismissal, and you can claim the same severance as if you were terminated. The ESA also caps how long a layoff can run (generally 13 weeks, or up to about 35 weeks with continued benefits) before it becomes a termination by law.
Is a temporary layoff legal in Ontario?
Not automatically. Many employers assume they can lay off staff whenever business slows. But the right to lay off has to come from somewhere: a clear term in your contract, or your agreement. The Employment Standards Act sets out rules for *how long* a layoff can last, but it does not, on its own, give an employer the *right* to impose one. Without that right, imposing a layoff can be a breach of your contract.
When does a layoff become a termination?
Two ways:
- By time. Under the ESA, a layoff that exceeds the statutory limit (generally 13 weeks of layoff in any period of 20 consecutive weeks, extendable to roughly 35 weeks within 52 weeks if the employer maintains certain benefits) becomes a termination, triggering termination and severance pay.
- By breach. If your contract never gave the employer the right to lay you off, the layoff can be a constructive dismissal from day one, regardless of the ESA timelines.
Temporary layoff vs. constructive dismissal
This is the key distinction. If the employer had the right to lay you off and stays within the ESA limits, it may be a lawful temporary layoff. If they did not have that right, the same layoff can be a constructive dismissal, which means you can treat the employment as ended and claim severance. See our guide to constructive dismissal for how that works.
When a layoff is treated as a constructive dismissal, the notice awarded is substantial. Recent Ontario examples:
- Webb v. SDT North America (2023 ONSC 7170): a 55-year-old with 13 years of service was awarded 15 months.
- Fogelman v. IFG (2021 ONSC 4042): a 48-year-old manager with about 11 years received 15 months.
- Chandran v. National Bank (2011 ONSC 4369): a long-service employee received 14 months.
What are your options if you are laid off?
Generally you can either treat the layoff as a temporary pause and wait to be recalled, or, if it is a constructive dismissal, treat it as a termination and pursue severance. Which path is better depends on your contract, your finances, and how likely recall is. The choice has deadlines and consequences, so it is worth getting advice before you decide, and before too much time passes.
What should you do if you are laid off?
- 1.Get a copy of your employment contract and check whether it mentions layoffs.
- 2.Keep the layoff notice and any record of what you were told about pay, benefits, and recall.
- 3.Do not assume you simply have to wait it out, and do not resign.
- 4.Get advice promptly. A layoff with no contractual right behind it is often a severance claim in disguise.
If your layoff looks like a dismissal, see how severance is calculated in our guide to severance pay in Ontario, or get a free review of your situation.
Frequently asked questions
Can my employer lay me off without pay in Ontario?
Only if your contract gives them the right to lay you off, or you agree. Without that right, an unpaid layoff can be a constructive dismissal entitling you to severance, even if the employer calls it temporary.
How long can a temporary layoff last in Ontario?
Generally up to 13 weeks of layoff in any 20-week period, extendable to roughly 35 weeks within 52 weeks if the employer maintains certain benefits. Past those limits, the ESA treats it as a termination.
Is a layoff the same as being fired?
Not always, but it can be. If the employer had no contractual right to lay you off, or the layoff exceeds the ESA limits, it is treated as a termination and you may be owed full severance.
Should I wait to be recalled or claim severance?
It depends on your contract, your finances, and how likely recall is. Both paths have deadlines and trade-offs, so it is best to get advice quickly rather than waiting indefinitely.
Daniel Carter
Legal Writer, Mirza Law
Daniel Carter is a legal writer at Mirza Law in Toronto. He writes about layoffs, employment contracts, and the steps to take before you sign anything from your employer.
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