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Many employees treat layoff and termination as the same thing. Under Ontario employment law they are not, and the distinction decides what you are owed. A layoff is meant to be temporary. A termination is permanent and triggers notice and severance obligations immediately. What most people do not know is that a layoff can become a termination by operation of the statute, that the termination date is then backdated, and that many layoffs were not lawfully permitted in the first place.
Updated September 2026
This article sets out the difference, the two clocks that run once a layoff begins, why the date the clock started matters more than the date it runs out, and what to do while you are waiting for a recall.
A layoff suspends work temporarily. A termination ends employment permanently. A layoff that exceeds the limits in the Employment Standards Act, 2000 becomes a termination, and it is deemed to have happened on the first day of the layoff.
There is a second and earlier route. The Act does not give an employer the right to lay anyone off. That right has to come from the contract, a collective agreement or established practice. Without it, a layoff can be a constructive dismissal from day one, with no need to wait for any time limit to expire.
The two states, side by side
Temporary layoff
- Work is interrupted; the employment relationship technically continues
- Recall is possible, and in a unionized workplace usually governed by the agreement
- Subject to strict time limits under the Act
- Becomes a termination once those limits are exceeded
- Requires the employer to have a right to impose it in the first place
Termination
- Permanent end of the employment relationship, no recall
- Notice or pay in lieu is owed immediately
- Statutory severance may apply on top, to a maximum of 26 weeks
- Common law reasonable notice usually exceeds the statutory floor by a wide margin
- The clock on a civil claim starts running
The first clock: how long a layoff can last
| Layoff duration | What happens |
|---|---|
| Up to 13 weeks in any 20-week period | Generally a lawful temporary layoff |
| Up to 35 weeks in any 52-week period | Still lawful, but only where extending conditions are met |
| Beyond the applicable limit | Deemed a termination, with notice and severance obligations triggered |
| 35 weeks of layoff within 52 | Also counts as being severed for statutory severance purposes |
The longer window is not automatic. It depends on conditions such as the employer continuing to make substantial payments, maintaining benefit plan contributions, or recalling the employee within a period agreed with a trade union. If your benefits were cut off when the layoff started, that is not just inconvenient, it is evidence that the longer window may not be available to your employer.
The part almost everyone misses: the date is backdated
When a layoff exceeds the limit, the employment is not terminated on the day the limit is passed. It is deemed terminated as of the first day of the layoff.
That single rule changes three things. Your termination pay and statutory severance are calculated from the earlier date. Your two-year limitation period for a civil claim starts from the earlier date. And the period you spent waiting for a recall does not extend anything, it simply consumes time you had.
So write down the first day you were sent home. That date, not the date the employer eventually confirms the job is gone, is the one your entitlement is measured from.
The second clock: was the layoff lawful at all
The Act limits how long a layoff may run. It does not create a right to impose one. That right has to come from your employment contract, a collective agreement, or an established practice in your industry. Where none of those applies, sending an employee home without pay is a unilateral removal of work and wages, and it can be a constructive dismissal from the moment it happens.
That means a claim may exist in week one rather than week fourteen. Many people wait out a layoff assuming it is lawful and only take advice when the recall does not come, by which point months of the limitation period have gone. The related situation where hours or pay are cut instead of stopped is covered in our article on whether an employer can cut your pay.
No layoff clause
Your contract says nothing about layoffs, or does not clearly permit the employer to suspend your work without pay.
No timeline
You were told it was temporary but given no recall date, no end date and no updates.
Benefits stopped
Coverage was cut at the start, which undercuts the extended 35-week window.
Other terms changed too
The layoff came with a pay cut, a role change or a demotion, each of which is its own issue.
Waiting for recall, or treating it as a dismissal
This is a real decision with a real trade-off, and it is the question most people actually have. Waiting preserves the recall and the relationship, but the clock runs and the entitlement is measured from a date already in the past. Treating the layoff as a dismissal crystallises the claim now, and it ends any prospect of going back.
Which is right depends on three things: whether your contract permitted the layoff, how realistic the recall is on the facts, and how much your notice entitlement is worth, which turns on your age, service and role. The last of those is set out in our articles on the reasonable notice period and common law severance. It is a short conversation and it is worth having before the decision is made by default.
What you are owed if the layoff becomes a termination
Statutory notice
Banded from one week at three months to eight weeks at eight years of service.
Statutory severance
One week per year to a maximum of 26, where you have five years and the employer meets the payroll test. See when severance is mandatory.
Common law notice
Usually the largest component, unless an enforceable termination clause limits you.
How it is paid
Lump sum or salary continuance changes benefits, tax and your job search. See the comparison.
Where a layoff sits in a larger cut
Where a group is affected rather than one person, further rules can apply. Terminating 50 or more employees at one establishment within a four-week period triggers enhanced group notice of eight, twelve or sixteen weeks and a Form 1 filed with the Director of Employment Standards, with the notice period not beginning until that form is received. Our article on mass layoffs in Ontario sets out the sequence, and layoffs in unionized workplaces covers what changes when a collective agreement governs recall and seniority.
Recent examples show how differently these play out. At Novelis in Kingston most of the workforce was placed on temporary layoff rather than terminated, which is precisely the situation this article addresses. At Hamilton Health Sciences positions were eliminated outright across both union and non-union staff. The Ottawa health care cuts and the Invista Kingston layoffs raised the same questions again.
One further trap: if your position is eliminated and then quietly refilled, that is worth a look, and our article on being replaced after a layoff explains why.
The point to hold onto
Two clocks run from the day you were sent home. One asks whether the layoff has gone on too long, and if it has, the termination is backdated to that first day. The other asks whether the employer had the right to lay you off at all, and if it did not, the claim existed from that first day regardless of how long the layoff lasts. Both are measured from a date that is already behind you, which is why waiting quietly is the costly option. Position as of September 2026.
If you have just been laid off
- Write down the first day. Everything is measured from it. Count 13 weeks and 35 weeks forward and put both dates in your calendar.
- Read your employment contract for any clause permitting layoff. If there is none, you may already have a claim.
- Get the layoff in writing, including whether it is temporary, whether there is a recall date, and what happens to your benefits.
- Check whether benefits continued. If they stopped, the extended 35-week window may not be available to the employer.
- Apply for EI now and check how the record of employment describes the separation.
- Do not sign a recall agreement or a release without having it read. Both can give away more than they give.
- Take advice before the 13-week mark, not after. The decision to wait or to claim is easier to make while both options are open.
Frequently asked questions
What is the difference between a layoff and a termination in Ontario?
A layoff is a temporary suspension of work where the employment relationship technically continues and recall is possible. A termination is the permanent end of employment and triggers notice and severance obligations immediately. A layoff can become a termination, either because it exceeded the time limits in the Employment Standards Act, 2000 or because the employer had no right to impose it in the first place.
How long can a layoff last before it becomes a termination?
Generally not more than 13 weeks in any 20-week period. That can extend to 35 weeks in any 52-week period where conditions are met, such as the employer continuing substantial payments or benefit contributions, or a recall period agreed with a trade union. Once the applicable limit is exceeded the layoff is deemed a termination.
If my layoff becomes a termination, what is my termination date?
The first day of the layoff, not the day the limit was exceeded. That backdating matters because termination pay, statutory severance and the two-year limitation period for a civil claim are all measured from the earlier date. Time spent waiting for a recall consumes the limitation period rather than extending it.
Can my employer lay me off if it is not in my contract?
Not automatically. The Act limits how long a layoff can last but does not give an employer the right to impose one. That right must come from an employment contract, a collective agreement or established industry practice. Without it, a layoff can be a constructive dismissal from the day it starts, entitling you to notice and severance without waiting for any time limit to run.
Should I wait for the recall or treat the layoff as a dismissal?
It is a trade-off rather than an obvious answer. Waiting keeps the recall alive but lets the clock run from a date already passed. Claiming now crystallises the entitlement and ends the prospect of returning. The right choice depends on whether the contract permitted the layoff, how realistic the recall is, and what your notice entitlement is worth, so it is worth advice before deciding.
Am I entitled to severance pay during a layoff?
Not during a lawful temporary layoff, because employment has not ended. Once the layoff converts to a termination you are owed statutory notice and, where you have five or more years of service and the employer meets the payroll threshold, statutory severance of one week per year to a maximum of 26 weeks. A layoff of 35 weeks within a 52-week period is itself treated as being severed for that purpose.
Can a layoff be a wrongful dismissal?
Yes. A layoff imposed without a contractual or legal right to do so may be a constructive dismissal from the moment it begins, and you do not have to wait for the statutory limits to expire before asserting it. Where it is, you may treat the employment as terminated and claim reasonable notice or pay in lieu. The two-year limitation period runs from that date, so act promptly.
What if I am recalled and then laid off again?
The time limits are measured across rolling windows, 13 weeks within 20 and 35 weeks within 52, so separate periods of layoff within the same window are counted together rather than starting fresh. A short recall does not reset the clock, which is worth checking carefully where work has been intermittent.
How Achkar Law helps
We act for people who have been sent home on a layoff and told to wait. The first question is always whether the employer had the right to do it, because that decides whether there is a claim now or in three months, and the second is what the notice entitlement is actually worth, because that decides whether waiting is sensible.
Our termination without cause lawyers assess where a layoff stands, our constructive dismissal lawyers act where the layoff was imposed without the right to do so, and our severance pay lawyers negotiate the package once employment has ended. If the question is whether your contract permitted any of this, our employment contract lawyers can answer it in one reading. In the GTA, see our Toronto termination lawyers.
The information in this article is current as of September 2026 and provides general information only. It is not legal advice and should not be relied on as legal advice or opinion. Whether a layoff was lawful, and what it is worth if it was not, depend on the wording of your contract and the facts. This publication is copyrighted by Achkar Law Professional Corporation and may not be reproduced in any form, in whole or in part, without express permission.
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