Temporary layoffs risk dismissal claims (Legal view)

A history of layoffs and contractual provisions lessen risk
By Jennifer Fantini and Lisa De Piante
|Canadian HR Reporter|Last Updated: 03/16/2009

Staff cuts, both temporary and permanent, are often the unfortunate reality of a contracting economy.

While unionized employers have the ability to lay off employees temporarily and recall them when economic conditions improve, subject to the terms of the collective agreement, employment standards legislation seems to give all employers the right to implement layoffs for a specified duration, subject to recall, without triggering a termination. However, there are other factors non-union employers must consider that could expose them to constructive dismissal claims.

Take, for example, Ontario. The province’s Employment Standards Act permits a temporary layoff of an employee, without pay, for up to 13 weeks within a period of 20 consecutive weeks. If the unpaid layoff exceeds that period, it will no longer be deemed “temporary” and the employer will become liable for reasonable notice and severance pay, if applicable.