What are the rules for temporary layoffs in Ontario?

Ontario's Employment Standards Act, 2000 permits temporary layoffs under specific conditions without the layoff being treated as a termination — but the rules are narrow. A temporary layoff can last up to thirteen weeks in any twenty consecutive weeks without triggering termination obligations. The layoff can extend up to thirty-five weeks in a fifty-two week period if the employer continues to pay benefits or recalls the employee.

If the layoff exceeds these periods, it is deemed a termination under the ESA, and the employer owes notice or pay in lieu (and severance, if applicable).

Crucially, many employment agreements do not actually include an express right to lay off employees. If the employment contract does not authorize layoffs, a layoff — even a short one — can constitute constructive dismissal at common law. This is a significant trap: the ESA temporarily permits the layoff while the common law may simultaneously entitle the employee to treat themselves as terminated and claim damages.

Employers considering temporary layoffs should review whether their contracts authorize them and consult a lawyer before proceeding. The interaction between ESA and common law on this issue is an active area of Ontario employment law.