In Ontario, a layoff can be no longer than 13 weeks. Under section 56(2) of the Employment Standards Act, if the layoff is longer than 13 weeks, then the employee becomes terminated. In that case, the employee is likely entitled to pay in lieu of notice and severance.
However, in rare circumstances, a layoff can be longer than 13 weeks. In that regard, a layoff can be up to 35 weeks if one of the following is met by the employer:
(i) the employee is paid most of his salary; or
(ii) the employee’s benefits are maintained; or
(iii) the employee’s pension contributions are maintained; or
(iv) the employee goes on employment insurance (“EI”); or
(v) the employee is eligible to go on EI, but chooses to work somewhere else; or
(vi) the Ministry of Labour approves a 35-week layoff; or
(vii) the employee agrees to go on a maximum 35-week layoff.
If any of the above applies, but the employee is laid-off for longer than 35 weeks, then the employee becomes terminated. Again, in that case, the employee would likely be entitled to termination pay.
Nevertheless, it is very important to know that unless the employee’s employment contract explicitly allows for a layoff, a layoff of any amount of time may constitute a constructive dismissal that would entitle the employee to notice pay and or severance. The fact is, a layoff is a fundamental breach of the employment relationship unless a contract says it isn’t.