Temporary layoffs in Ontario: Rules, timelines, and recall rights

A temporary layoff in Ontario lets an employer pause work without ending the employment relationship, but it also starts a clock. Under the Employment Standards Act, 2000 (ESA), every week of layoff counts toward a statutory limit, and when that limit runs out, the law treats the layoff as a termination that started on day one.

That backdated date can catch employers out on notice and severance. Another risk is that a layoff can follow every statutory rule and still lead to a successful common-law dismissal claim. In this article, explore the requirements and legal risks of conducting a temporary layoff in Ontario, and how it differs from similar workforce reductions across Canada.

In Ontario, an employee can be temporarily laid off for up to 13 weeks in any 20-week period. A layoff can run longer only when a specific statutory condition applies.

The ESA’s definition of a “week of layoff” is broader than it first appears. A week counts if the employee earns less than half of what they would ordinarily earn, so a deep cut to hours can count even when someone is still working some shifts. Weeks don’t count if the employee was unable or unavailable to work, was suspended for disciplinary reasons, or had no work because of a strike or lockout, according to Ontario’s ESA guide.

The 13 weeks don’t have to be consecutive. The ESA looks back over a rolling 20-week window, so short, repeated layoffs add up faster than they look on a schedule.

A layoff can last longer than 13 weeks, but fewer than 35 weeks in any 52 consecutive weeks, if one of these conditions is met.

Moreover, an employee collecting regular Employment Insurance (EI) doesn’t, on its own, meet any of these conditions. The condition refers to supplementary employment benefits: employer-funded top-ups paid through a plan registered with Service Canada.

Continued benefits is the easiest condition to lose by accident: if contributions stop partway through, the extension ends too.

Since November 27 2025, Ontario employers have had one more option. An extended temporary layoff in Ontario can last 35 or more weeks, but fewer than 52, in any 78 consecutive weeks. According to the ESA guide, it requires:

• A written agreement: The employer and employee agree to it in writing.
• Disclosure before signing: The employee first receives, in writing, the latest intended recall date and a statement that the agreement can’t be withdrawn.
• Director approval: The employer applies to the Director of Employment Standards at least 30 days before approval is needed.

Approval expires on the latest intended recall date, or when the layoff reaches 52 weeks in a 78-week window, whichever comes first.

Layoffs become terminations as soon as they exceed their applicable limit. The ESA then deems the employer to have terminated the employee, and the termination date is the first day of the temporary layoff, not the day the window closed.

That backdating changes the math. Take an employee laid off on February 2 with no extension condition in place and not recalled when the 13-week limit passes in early May. The termination date is February 2. The employee is generally owed termination pay as if they were let go without notice that day, and all notice and severance calculations start from that date.

Two features make this easy to miss:

• No notice is needed to start a layoff: The ESA doesn’t require written notice or a reason, so it’s easy to lose track of start dates.
• The window keeps rolling: A second layoff can push someone over the limit even after an earlier recall.

No severance is due as long as the layoff stays within the ESA’s limits. A valid temporary layoff isn’t a termination, so you don’t owe termination or severance pay.

Under the ESA severance rules, employment is severed when an employer lays someone off for 35 or more weeks in any 52 consecutive weeks, or after an approved extended layoff expires. Here, a week of layoff means earning less than a quarter of regular wages, compared with less than half for termination purposes.

Severance applies only to employees with five or more years of service, at an employer with a global payroll of at least $2.5 million, or one severing 50 or more employees within six months because all or part of the business permanently closed.

An employee with recall rights who becomes entitled to termination pay because of a layoff of 35 weeks or more can keep their right to be recalled and defer the payment, or give it up and take the money, including severance if eligible. If a non-union employee keeps the right or doesn’t choose, the money is held in trust by the Director.

Yes, fully compliant layoffs can result in litigation, and following the ESA clock is no defence.

The ESA sets minimum standards, but doesn’t give employers a general right to lay people off. At common law, an unpaid temporary layoff of a non-unionized employee is generally safe only if the employment contract expressly allows it or the employee agrees to it. Without one of those, the employee may treat the layoff as constructive dismissal and claim reasonable notice damages, which can far exceed ESA minimums.

Ontario’s ESA guide itself notes that a layoff not permitted by the contract may be a dismissal. In one 2016 case, a facilities manager with 15 years’ service was laid off for three months, with benefits continued, well within the ESA’s limits. The court still found he’d been constructively dismissed because his contract didn’t allow for a layoff.

For employers, that means:

• Check contracts before the layoff: Confirm whether each affected employee’s contract expressly allows temporary layoffs (not all will).
• Get consent in writing: If you’re relying on the employee’s agreement, document it and make sure it’s genuinely voluntary.
• Don’t treat benefits as a shield: They can meet an ESA extension condition, but they didn’t protect the employer in the 2016 case.
• Add layoff clauses to new contracts: Changing existing contracts raises enforceability questions, so speak to employment counsel first.

In unionized workplaces, the collective agreement sets the rules for layoffs and recalls.

Yes, employees can collect Employment Insurance during a temporary layoff, as long as they meet the EI eligibility rules.

When an employee has, or is expected to have, seven consecutive calendar days with no work and no insurable earnings, you must issue a Record of Employment (ROE), even if they don’t plan to apply for EI. Service Canada’s ROE guide sets paper ROEs as due within five calendar days of the interruption, while electronic ROEs follow pay-period deadlines.

To top up income during the layoff, a registered SUB plan (supplemental unemployment benefit plan) lets you pay employees without deducting those payments from their EI. In Ontario, it also counts as a condition that can extend a layoff past 13 weeks.

Recall gets far less attention than the layoff, yet it decides whether you get back the people you meant to keep. For that reason, recall rights deserve a deliberate plan.

Ontario’s ESA doesn’t prescribe a recall notice for non-union employees, so set your own standard. Include:

• The return date, time, and location
• The position, hours, and pay the employee is returning to
• The date by which they need to confirm
• A contact person for questions
• What happens if they don’t respond or return

Send it by email and one other reliable method, such as courier or registered mail, and keep proof of delivery. If the original layoff wasn’t in writing, our guide on writing a layoff letter covers what to include. When recalling only part of a group, use consistent, documented criteria such as skills, seniority, or business need.

Ontario’s ESA refers only to a “reasonable time.” Alberta is more specific: its Employment Standards Code gives employees seven calendar days from service of a written recall notice. That’s a useful benchmark for Ontario, with more time after longer layoffs. 

Under the ESA, an employee who doesn’t return within a reasonable time after being recalled from a temporary layoff isn’t entitled to termination pay. Before treating silence as a resignation, follow up, check for a protected leave or medical reason, and document every attempt to reach them.

If you implement a temporary layoff in Canada, the rules will vary by location. Each province sets its own limits, and federally regulated employers follow the Canada Labour Code, so the clock depends on where each employee works.

Here are the basic rules for temporary layoffs across Canada:

Jurisdiction	Basic limit	When it can run longer
Ontario	13 weeks in any 20 consecutive weeks	Under 35 weeks in 52 if a statutory condition applies; under 52 weeks in 78 with an approved extended layoff.
Federal	3 months	Written recall date within 6 months; continued payments, benefits, or SUB; or recall under a collective agreement (up to 12 months).
British Columbia	13 weeks in any 20 consecutive weeks	Recall period in a collective agreement, or a variance for exceptional circumstances.
Alberta	90 days in any 120-day period	Regular payments such as wages, pension, or benefits continue, and the employee agrees.
Manitoba	8 weeks in any 16-week period	Wages, or pension and group insurance contributions, continue.
Quebec	No fixed statutory limit	Written notice required before a layoff of 6 months or more.

BC allows layoffs only if the employee agreed in advance, through the contract, an agreement, or industry norms. Alberta requires written notice before the layoff starts, while Manitoba backdates termination to the layoff’s first day, as Ontario does.

Quebec doesn’t cap layoff length, but requires one to eight weeks’ written notice, depending on service, before a layoff of six months or more. If a layoff expected to last under six months runs past that point, the indemnity in lieu of notice becomes payable at the six-month mark.

In Ontario, a temporary layoff holds up only when three things line up: a contract or written consent that allows it, an accurate count of the weeks used, and a recall plan that brings the right people back on time. Miss one, and a pause can become a backdated termination or a costly common law claim.

When a layoff becomes permanent, the support you offer shapes how quickly people land. With a 30:1 coaching ratio, Careerminds gives every participant unlimited one-on-one coaching, and our executive outplacement program supports senior leaders through more complex transitions. Book a demo with one of our experts to see how it works.