If an employer is unable to provide work for an employee but doesn’t want to lose the employee long-term, the employer can lay the employee off for a short period of time in a “temporary lay-off”. An employee who is part of a temporary lay-off will return back to their place of employment after the temporary lay-off is over.
A temporary lay-off has specific criteria that are outlined in the Employment Standards Act, 2000 (“ESA”).
How Long Can a Temporary Lay-Off Be?
The maximum duration of a temporary lay-off is found in section 56(2) of the ESA.
For a lay-off to be considered temporary, it must not be longer than either:
- 13 weeks within a period of 20 consecutive weeks or
- 35 weeks within a period of 52 consecutive weeks
The 20-week and 52-week consecutive periods that are used to determine the duration of a lay-off are rolling windows, meaning that neither party can pick which weeks are used to see if the threshold for a lay-off being temporary is met.
Instead, if the 13-week and 35-week thresholds are surpassed at any point in a 20-week and 52-week window, respectively, the lay-off is considered permanent rather than temporary.
If a lay-off is not longer than 12 weeks within a period of any 20 consecutive weeks, then it is considered a temporary lay-off. If a lay-off is longer than 12 weeks but less than 35 weeks within a period of 52 consecutive weeks, a number of other factors can indicate that a lay-off is temporary.
Factors Indicating That a Lay-Off is Temporary
If a lay-off is between 12 to 35 weeks long within a 52-week period, meeting any one of the following factors is sufficient to classify the lay-off as temporary:
- The employee continues receiving substantial payments from the employer. In order for this to apply, the employer should make payments throughout the entirety of the temporary lay-off.
- The employer continues contributing to a retirement, pension, group, or employee insurance plan for the benefit of the employee. If the contributions are wage-based, they should continue based on the employee’s wages prior to the lay-off.
- The employee receives supplementary unemployment benefits or is entitled to but does not receive the benefits because they are employed elsewhere. Supplementary unemployment benefits are when an employer makes payments that are held in trust and given to employees or former employees that may be or are laid off.
- The employer recalls the employee within a time frame that is approved by the Director.
- If the employee is not represented by a trade union, the employer recalls the employee in a time frame that is agreed upon between the two parties.
If an employee is represented by a trade union, then a temporary lay-off can be for a longer period than the time frames mentioned above, as long as the employer recalls the employee within a time frame that is agreed upon by the employer and the trade union.
What Happens if a Temporary Lay-Off is Longer?
Under section 56(4) of the ESA, a temporary lay-off is not considered termination if it satisfies the criteria addressed above, even if the employer does not provide a recall date for the employee. This changes once the temporary lay-off time limits are surpassed.
If the employee does not get recalled by their employer within the temporary lay-off period, the lay-off is no longer considered to be temporary and the employee is deemed to be terminated on the first day that the lay-off started. As a result, if an employee is terminated following a temporary lay-off, the duration of the temporary layoff is not included in the calculation of the employee’s period of employment.
If the employee is not recalled within the temporary lay-off period, and the employee’s employment is terminated, the employee may be entitled to severance or termination pay. Whether the employee is entitled to a common law “reasonable notice” of termination, statutory notice of termination under the ESA, or statutory severance under the ESA depends on how long they worked at their place of employment and the content of their employment agreement.
Lydia is a third-year student at Western Law who is interested in employment, technology, and intellectual property law. She enjoys exploring these topics, and other areas of the law, through contributions to this blog.