Understanding Your Employment Rights During Layoffs

Layoffs can be a stressful and uncertain time for employees, especially when they are unfamiliar with their rights. In Canada, employment laws protect workers facing job losses by ensuring they receive fair treatment, severance pay, and notice periods as required under employment standards legislation. Understanding these rights can help employees navigate layoffs more confidently and take appropriate action if their rights are violated.

1. What is a Layoff?

A layoff occurs when an employer temporarily or permanently ends an employee’s job due to economic downturns, restructuring, or other business reasons. Layoffs can be either short-term or long-term, and employees should be aware of their entitlements during this period.

Temporary vs. Permanent Layoffs

Temporary Layoff: A short-term suspension of work with the expectation that the employee will return within a specific period.

Permanent Layoff: A job termination where the employee is not expected to return.

Each province in Canada has different rules governing layoffs, including the maximum duration of temporary layoffs before they become terminations.

2. Notice Periods and Severance Pay

Under Canadian employment laws, employees are entitled to either advance notice of termination or compensation in lieu of notice, known as severance pay. The length of notice or severance pay depends on factors such as:

The employee’s length of service

The terms of the employment contract

Provincial and federal employment standards

For example, under Ontario’s Employment Standards Act (ESA), the notice period can range from one week for employees with less than a year of service to eight weeks for those with eight or more years of service. In some cases, employees may also be entitled to common law severance, which is often more generous than statutory severance.

3. Employment Insurance (EI) Benefits

Employees affected by layoffs may qualify for Employment Insurance (EI) benefits, which provide temporary financial support while they search for new employment. To be eligible, employees must have worked a minimum number of insurable hours and meet other criteria set by Service Canada.

4. Constructive Dismissal and Layoffs

If an employer lays off an employee without proper notice or violates contractual terms, the employee may have grounds for a constructive dismissal claim. This occurs when:

An employer significantly reduces an employee’s hours or pay without consent

Changes fundamental aspects of the job without agreement
Extends a temporary layoff beyond the legal limit

In such cases, employees may be able to claim wrongful dismissal compensation.

5. Employee Rights Under Collective Agreements

For unionized employees, layoffs are often governed by collective agreements, which outline specific rights, such as:

Priority recall rights

Severance entitlements

Seniority-based layoff procedures

Unionized employees should consult their union representatives if they believe their layoff violates the terms of their collective agreement.

6. When to Seek Legal Advice

If an employee suspects their layoff is unlawful or unfair, consulting an employment lawyer can help them understand their rights and possible legal remedies. Firms such as Whitten & Lublin employment firm in Toronto specialize in employment law and can provide guidance on severance negotiations, wrongful dismissal claims, and other workplace legal matters.

7. Employer Obligations During Layoffs

Employers must ensure they comply with employment laws when conducting layoffs. This includes:

Providing proper notice or severance pay

Ensuring compliance with employment contracts

Not discriminating against employees in layoff decisions

Failure to meet these obligations could result in legal consequences for the employer.

Conclusion

Layoffs are challenging, but employees who understand their rights can better navigate the process and ensure they receive fair treatment. Whether seeking severance pay, filing for EI benefits, or challenging an unfair layoff, knowing the legal protections available can make a significant difference. If in doubt, consulting an employment lawyer can provide clarity and legal options to safeguard an employee’s interests.