Temporary vs. permanent layoffs are back in the spotlight across Ontario, as workers navigate job insecurity in an uncertain economy. According to a recent survey by the Toronto Region Board of Trade, nearly 40% of Toronto-area workers fear losing their jobs in the next 12 months. For younger workers under 35, that number climbs to nearly 50%.
With major May 2025 layoff announcements from TD Bank, OpenText, and Alstom, employees across industries are left wondering what their rights are—and what they’re truly owed—whether their layoff is temporary or permanent.
Understanding Temporary vs. Permanent Layoffs
Ontario law treats temporary vs. permanent layoffs very differently. Knowing which category your situation falls into is crucial for protecting your legal rights, accessing severance, and ensuring continued benefits where applicable.
A temporary layoff occurs when an employer suspends an employee’s work with the intention of recalling them later. Under Ontario’s Employment Standards Act (ESA), a temporary layoff can last:
- Up to 13 weeks in any 20-week period, or
- Up to 35 weeks in any 52-week period if certain conditions are met, such as continued benefits or partial wages.
But here’s where many employees are misled: unless your employment contract clearly authorizes temporary layoffs, placing you on one may be considered a constructive dismissal. In that case, the law may treat it as a termination—entitling you to full severance pay.
A permanent layoff signifies the end of the employment relationship. In such cases, employers are required to provide:
- Termination pay, and
- Possibly severance pay under common law, which often exceeds the ESA minimums.
The amount depends on factors like your length of service, age, position, and the availability of similar employment. It’s essential to have any severance offer reviewed by an experienced employment lawyer to ensure it reflects your rightful entitlements.
Layoffs While on Disability Leave: Special Considerations
If you’ve been laid off while on disability or medical leave, your situation involves additional legal protections. The Ontario Human Rights Code prohibits employers from terminating employees because of disability or while they are on protected medical leave.
If you are currently:
- Receiving short- or long-term disability benefits, or
- Recovering from an illness or mental health condition with a doctor’s support
…and are handed a layoff notice, that action may be discriminatory—even if labeled temporary.
You may have a claim for human rights damages in addition to severance. These situations require careful legal review, as the intersection of disability, employment law, and human rights is highly nuanced.
What to Do If You’re Laid Off
If you’ve been affected by either a temporary or permanent layoff, here are the key steps to protect your rights:
- Do not sign any severance or recall documents right away.
- Get your employment contract reviewed—especially for layoff language.
- Consult an employment lawyer to understand what you’re legally entitled to.
The difference between temporary vs. permanent layoffs can significantly impact your compensation, benefits, and legal remedies.
We’re Here to Help
At Lecker & Associates, we specialize in employment law and are dedicated to protecting employees’ rights. If you’re dealing with a layoff or termination, especially under uncertain economic conditions, we’re here to provide the guidance and support you need.
📞 Call us at 416-223-5391
💻 leckerslaw.com/contact-us