Temporary layoffs can be a necessary element of operating a business in Canada. Employers faced with a shortage in available work may need to reduce staffing in the short term to control costs, with the goal of preserving jobs in the long term.
Temporary layoffs are common in some industries and rare in others. They may be driven by cyclical changes in business demand or extraordinary events like the COVID-19 pandemic. Whatever the reason, employers should be aware of applicable laws before taking this step. This legal update reviews the laws applicable to temporary layoffs, with particular attention to rules in Alberta, British Columbia, Ontario and the federal sector.
Employment standards statutes across Canada provide for “temporary layoffs.” These enable an employer to lay an employee off work for a limited period of time, typically without terminating the employment relationship. The employee generally is not entitled to pay during the layoff period. In effect, the employment relationship is paused.
The employer can recall the employee back to work at any time before the end of the statutory layoff period. If the employee is recalled within this time period, then the employment relationship generally continues and, in most jurisdictions, termination entitlements are not owed. Generally, if the employee is not recalled within this time period, the employment relationship is deemed to be terminated, and any termination entitlements (under...
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