The COVID-19 pandemic has created a great deal of uncertainty, including for many employees. You may be told by your employer that you are being temporarily laid off due to a lack of available work, leading you to wonder: can my employer do this? And, if so, what are my rights?

The answer to these questions, like most legal questions related to your employment, depends on three different sources of legal rights: your employment contract; the common law (legal rules developed through court decisions); and employment legislation (for more information on these sources of your rights, see Know Your Rights – Determining the Terms and Conditions of Your Employment).

At common law, an employer has no right to lay off an employee. This means that, unless there is a term in your employment contract permitting layoffs, a layoff is a substantial change in your employment contract amounting to a constructive dismissal—this is true even if the employer agrees to recall you once more work is available and has no intention to end the employment relationship. This allows you to bring a claim against your employer for wrongful dismissal. (To learn more about what you could claim, see What is Reasonable Notice?) However, before claiming constructive dismissal, you should obtain legal advice about the consequences of that decision (including abandoning any rights to be recalled).

If your employment contract does allow temporary layoffs, that term of the contract must comply with the minimum standards in employment legislation. For workers governed by the Ontario Employment Standards Act, an employer can only lay an employee off for 13 weeks in any 20-week period, or up to a maximum of 35 weeks in a 52-week period if one of several requirements are met:

  • The employee is still paid;
  • The employer continues the employee’s pension or benefits;
  • The employee received supplementary unemployment benefits, or would have if the employee were not working elsewhere;
  • The employee is recalled within the time period specified in an agreement between the employee and the employer, or within the time approved by the Director.

If your employment contract violates these provisions (for example, if it includes a term allowing indefinite layoffs), that term may be found void by the courts, which means that you were constructively dismissed as of the first day of your layoff. If your contract does comply with this legislation, you will be considered terminated if the layoff exceeds 35 weeks.

Conclusion

In these difficult times, many employers may be considering temporary layoffs as a response to the economic consequences of the pandemic; however, in many cases, doing so may trigger the employees’ right to claim constructive dismissal.

It is important to emphasize that the current crisis is unprecedented, and may itself impact the development of the law. As a result, there is some uncertainty about how a court will decide a claim for constructive dismissal in these unusual circumstances. For this and other reasons, it is important for employees to obtain legal advice before claiming constructive dismissal as a result of a temporary layoff, to fully understand the risks and consequences.

[Note: this information applies to non-unionized employees only. Unionized employees should consult their bargaining agent. This article is for informational purposes only and does not constitute legal advice, which requires an assessment of your individual circumstances.]