In the current economic environment, employees live in the constant fear of being laid off from work. A business which might be experiencing a short decline might consider temporarily laying off employees, as they might not be able to afford termination and severance costs. There are a lot of misconceptions surrounding temporary lay-offs. If you have been temporarily laid off you should consider consulting an Employment law firm Toronto, they will help you understand under what conditions are layoffs acceptable and what your rights are.

What are layoffs?

Layoffs and termination have two distinct meanings. Temporary Layoff implies an employer temporarily ceasing an employee’s employment with the understanding that the employee would be asked to join work again within a stipulated time frame. If layoffs exceed the maximum number of days under the applicable employment standards legislation, then it shall turn into a termination at law. In such a situation the employee would be entitled to pay in lieu notice under the applicable employment standards legislation and under the common law as well.

According to provincial jurisdiction, temporary layoffs could last up to 13 weeks in a consecutive period of 20 weeks. This could include the time not worked by the employee and the time where the employee was given significantly less income as compared to their regular earnings before the layoff. Layoff period can be extended beyond the 13 weeks notice by the employer if substantial payments are given to the employee and the benefits are continued or if the employee is entitled to unemployment benefits or if the employee has been called back to work within the approved time.

When can layoffs be treated as constructive dismissal?

Notice of layoff prior to it is not mandatory as long as the employer calls back the employee before the specified date. Employers do not have a free-standing right to temporarily lay off employees as they please. There must be a specification in the contract which has been approved by the employee stating that the employer is right. If there is so no such document and the employer has imposed a temporary layoff on an employee, then the employee has to treat it as constructive dismissal. Due to constructive dismissal, the employee will be entitled to seek damages for wrongful dismissal and file for a lawsuit.

In a situation where there is no contract and the employer wants to preserve their ability to impose temporary layoffs, they should approach the employee with a proposed temporary layoff. As the chances of preferring a temporary layoff as compared to termination are higher. Employers could advise the employees to collect their Employment Insurance benefits during the layoff.

If a layoff has been imposed in contradiction to the employee’s rights and entitlements under the law, then the negative impact of it can be reduced if the employer asks the employee to join back as soon as possible. If the employee fails to do so, then it will have a negative impact on the employee’s claim.