In Taylor v. Salytics Inc., 2025 ONSC 3461, the Ontario Superior Court of Justice considered whether a temporary layoff provision in an employment contract constituted a termination provision, and was therefore subject to the applicable principles established by earlier Ontario decisions related to the interpretation of termination language in employment agreements. The Court ruled that a valid temporary layoff provision is not a termination provision. This decision indicates that a contractual temporary layoff provision, when properly constructed, will not be invalidated simply on account of unenforceable termination language.

Background

The applicant was employed by the respondent employer for approximately 11 years, first joining as a Lead Developer and later moving to the position of Senior Technical Consultant in 2018. Due to the respondent’s financial difficulties, the applicant agreed to a temporary 20% reduction in hours and pay. Three weeks later, he was placed on a temporary layoff for six months during which he received no income, though his benefits continued. The applicant argued this temporary layoff amounted to a constructive dismissal. The respondent disagreed, taking the position that it was entitled to temporarily lay off the applicant pursuant to the terms of his employment contract. The contract contained a section labelled “Termination,” which stated as follows:

Termination

Salytics may terminate your employment at any time for cause.

Salytics may...

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