Q&A: Temporary Lay-Offs from Work

Q&A is a recurring series on the Vey Willetts LLP blog. The aim is to provide quick answers to questions we commonly encounter in our day-to-day practice of employment law. In this edition, we focus on temporary lay-offs from work.

Q. What is a temporary lay-off?

A. A temporary lay-off from work occurs when your employer temporarily stops your work (and therefore pay) but does not terminate the employment relationship. Lay-offs usually happen when an employer has a shortage of work or is attempting to reduce labour costs.

Q. Is my employer allowed to temporarily lay me off from work?

A. Generally speaking, an employer can only place an employee on a temporary lay-off where it has agreed contractual terms that allow it to do so. As such, if you are an employer, and want the flexibility to lay-off staff during periods of economic slowdown, it is essential that your employees sign an employment agreement which includes express language agreeing that he/she may be placed on a temporary lay-off in accordance with the Employment Standards Act, 2000 (“ESA”).

If you are an employee and either do not have a written employment contract, or the contract is silent as to temporary lay-offs, your employer typically cannot place you on a lay-off unless you have expressly agreed, acquiesced by your conduct (i.e. have accepted past lay-offs without complaint) or there is a demonstrable industry norm that provides for such regular layoffs.

If your employer attempts to impose a lay-off despite this, you should speak immediately with an employment lawyer to ensure that your rights are protected. The courts have recognized that where an employee is placed on a temporary unpaid lay-off, absent a contractual right to do so, it will likely amount to a constructive dismissal.

Q. How long does the Employment Standards Act, 2000 allow a temporary lay-off to last?

A. Section 56(2) of the Employment Standards Act, 2000 (“ESA”) set the parameters for a temporary lay-off in the following manner:

• It is a lay-off from work of not more than 13 weeks in any period of 20 consecutive weeks; or
• A lay-off of more than 13 weeks in any period of 20 consecutive weeks, if the lay-off is less than 35 weeks in any period of 52 consecutive weeks, provided that:
  • the employee either continues to receive substantial payments from the employer; or
  • the employer continues to make all usual payments for the benefit of the employee pursuant to any group or employee insurance plan and retirement or pension plan; or
  • the employee receives supplementary unemployment benefits; or
  • the employee is entitled to receive supplementary unemployment benefits, but isn’t receiving them as he/she is working elsewhere; or
  • the employer recalls the employee within the time frame approved by the Director of Employment Standards; or
  • the employer recalls the employee within the time frame set out in agreement with a non-unionized employee.

Again, it is important for both employers and employee to remember that while the ESA sets the parameters for how long a temporary lay-off can last, it does not provide employers with an inherent right to place employees on lay-off.

Q. What happens if my employer lays me off for a period that is longer than permitted by the ESA?

A. If your temporary lay-off last longer than the period required by the ESA (either 13 weeks, or 35 weeks where pre-conditions are satisfied), your employer is deemed to have terminated your employment. In such circumstances, you will be entitled to receive severance. Your entitlements in this regard will depend on your particular circumstances.

Additional Resources:

• Ministry of Labour, Temporary Lay-offs
• Vey Willetts Severance Pay Calculator

*This Q&A article is provided solely for informational purposes. It is not specific legal advice. Should you wish to receive specific legal advice regarding a temporary lay-off from work, please contact us directly.

Vey Willetts LLP is an Ottawa-based employment and labour law boutique that provides timely and cost-effective legal advice to help employees and employers resolve workplace issues in the National Capital Region and across Ontario. To speak with an employment lawyer, contact us at: 613-238-4430 or info@vwlawyers.ca