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Buying & Selling a Business

Can the new owner cut my hours without technically laying me off?

TSL Written by the Treadstone Law team· Updated August 2026

In principle, some adjustment to hours is within a new owner's normal discretion to run the business its own way, but there are real limits, and a significant enough cut can matter legally even without ever being labelled a "layoff." Ontario's Employment Standards Act, 2000 has specific rules about reduced hours or earnings crossing a threshold that gets treated as a deemed layoff for statutory purposes, whether or not the employer calls it that — the label an employer uses doesn't control the legal characterization.

Separately, at common law, a dramatic and lasting cut to your hours or pay can amount to a fundamental change to your job that you're not required to simply accept, potentially giving you rights well beyond whatever the Employment Standards Act sets as a bare minimum. A modest, temporary scheduling adjustment during a transition is different from a sustained, severe cut designed to quietly push you out or reduce costs without paying what a real layoff or termination would require.

If your hours are cut substantially and it doesn't look temporary, don't assume that avoiding the word "layoff" means nothing has legally happened — document exactly how much your hours or pay dropped and for how long, and get advice on whether it crosses into something you don't have to accept.

Key takeaways

  • Employers have some discretion over hours, but there are real legal limits on how far that goes.
  • The ESA treats a severe enough hours or earnings cut as a deemed layoff, regardless of the label used.
  • A dramatic, lasting cut can also be a fundamental change you're not required to accept at common law.
  • Document the size and duration of any cut and get advice rather than assuming the label controls.
This is general information, not legal advice. It doesn’t create a lawyer–client relationship, and the rules can change. For advice on your situation, a Treadstone business lawyer can help.
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