Stelco Hamilton Layoffs: Recall, Severance and Your Rights

Stelco is indefinitely idling the finishing operations at Hamilton Works and moving production to Lake Erie Works in Nanticoke. United Steelworkers Local 1005 says about 350 of its members in Hamilton will be laid off, starting on 9 October 2026, and reporting puts the total at up to 500 across both sites. The company says some Hamilton employees will be offered work at Lake Erie. Its U.S. owner, Cleveland-Cliffs, blames the trade war with the United States. Ottawa says the layoffs breach the job commitments Cleveland-Cliffs gave when it bought Stelco in 2024, and the Prime Minister has said the government will pursue the company to the full extent of the law.

Updated October 2026

Most of the people affected are union members, and for them the collective agreement and the union run the process. But an indefinite layoff raises questions that apply whether or not you are in the union: how long a layoff can last before it becomes a termination, what happens if you turn down a job at Lake Erie, and whether the federal undertakings give you anything you can enforce yourself. This article works through those questions.

What has been announced

The fork: union or not

How long an indefinite layoff can last

For non-union employees, the Employment Standards Act, 2000 treats a layoff as temporary only up to 13 weeks in any 20 consecutive weeks. It can run to 35 weeks in 52 if the employer keeps paying benefits or makes substantial payments to the employee, or the employee receives supplementary unemployment benefits. Past those limits, the employment is treated as having been terminated on the first day of the layoff.

Union members are treated differently. Where employees are represented by a union, a layoff longer than 13 weeks stays temporary as long as the employer recalls them within the time set out in the agreement with the union. So for USW members at Hamilton Works, the clock is the recall period in the collective agreement, not 35 weeks. If the recall period ends without a recall, the layoff becomes a termination dating back to its first day.

At that point the statutory entitlements apply. Termination pay runs from one to eight weeks depending on service. Statutory severance of one week per year of service, to a maximum of 26 weeks, applies to employees with five or more years where the employer’s payroll is at least $2.5 million, which Stelco clearly meets. If 50 or more people at one establishment are terminated within four weeks, the mass termination rules also apply: 12 weeks of notice for 200 to 499 employees, with the notice period starting only when the employer files a Form 1. One point catches people out. Where you qualify for severance but still hold recall rights, you can choose between keeping the recall rights and taking the severance, and taking the severance gives up the recall right. That is a decision to make with your union. Our articles on layoff compared with termination and mass layoffs in Ontario set out the rules in full.

The jobs at Lake Erie Works

Stelco says Hamilton employees will be offered work at Lake Erie. For union members, who gets those positions and on what terms is a matter for the collective agreement, its transfer and bumping provisions, and the union.

For non-union staff, an offer of work at a different site has two sides. Moving someone to a different location without a contractual right to do so can be a fundamental change to the job. But refusing a reasonable offer from the same employer can count against you. Under the ESA, an employee who refuses an offer of reasonable alternative employment with the employer may lose statutory notice. At common law, the Supreme Court of Canada held in Evans v. Teamsters Local Union No. 31, 2008 SCC 20, that returning to work for the same employer can be part of the duty to mitigate where the conditions are not humiliating or degrading and the relationship has not broken down. Whether the commute, the role and the pay make a Lake Erie offer reasonable depends on the person and the offer, so get advice before you answer. Our article on the duty to mitigate covers the rule.

If you are not in the union

Salaried, supervisory and professional staff are the group most likely to assume that the union’s process covers them. It does not. At common law, an employer has no right to lay off a non-union employee unless the contract allows it, expressly or through a well-established practice the employee accepted. Without that right, a layoff is generally treated as a termination, and the employee can claim reasonable notice now rather than waiting for the ESA limits to run. A contract that does allow layoffs is another matter. In Taylor v. Salytics Inc., 2025 ONSC 3461, a layoff clause was enforced even though the contract’s for-cause wording was not.

Where notice is owed, the market matters. Reasonable notice is assessed on age, length of service, the character of the role and the availability of comparable work. A long-serving steel industry professional in Hamilton looking for comparable work while the region’s largest steelmaker is cutting back has a strong argument on that last factor. Our Hamilton employment lawyers make that argument on these files, and our article on the Bardal factors explains how it is weighed.

The federal undertakings: what they do and do not do for you

When Cleveland-Cliffs bought Stelco in 2024, it gave the federal government undertakings under the Investment Canada Act, including commitments to maintain unionized employment levels for five years. Ottawa says the layoffs breach them. Under the Act, the Minister can demand compliance and can go to court, where a judge can order compliance, impose penalties or require the investment to be sold. The full terms are confidential. Only a government summary is public, and lawyers commenting on the dispute have said the outcome will turn on their exact wording.

For workers, the important point is who holds those rights. The undertakings are an agreement between the investor and the government, enforced by the government. In general they do not give individual employees a claim they can bring themselves. Your rights come from the collective agreement, the ESA, your employment contract and the Human Rights Code. What happens between Ottawa and Cleveland-Cliffs may affect whether Hamilton Works restarts and whether recall happens, so it is worth following, but it is not a substitute for protecting your own position.

When selection touches a protected ground

Most of this layoff runs on seniority under the collective agreement, which is neutral on its face. Where selection or the handling of transfers falls on people on medical leave, on accommodation, on parental leave, or in an older age group, that can be a human rights issue. Unionized employees can bring a claim to the Human Rights Tribunal of Ontario in their own name, because the Tribunal and labour arbitrators share jurisdiction over human rights matters in unionized workplaces. Our article on human rights claims for unionized employees explains how that works. The deadline is generally one year from the last incident, and a grievance does not pause it.

For other Hamilton employers

Tariff pressure reaches well beyond Stelco, and suppliers and service companies may be looking at their own layoffs. The rules above work the same way from the other side. A non-union employee can only be laid off where the contract allows it, the ESA limits on the length of a layoff apply, and layoffs that turn into terminations count toward the mass termination threshold. In a unionized workplace, the collective agreement sets the order of layoff, bumping and recall. Our article on layoffs in unionized workplaces covers the employer side.

Frequently asked questions

The information in this article is current as of 1 October 2026 and provides general information only. It is not legal advice and should not be relied on as legal advice or opinion. It is based on public reporting of Stelco’s announcement of 28 September 2026, and what any individual is entitled to depends on their collective agreement or contract, service and circumstances. 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.