The Legality of Layoffs During the COVID-19 Crisis

In the midst of one of the worst pandemics to plague the earth in the past century, the global economy has seriously suffered. One way businesses are trying to cut costs in order to weather the storm is by imposing layoffs. While this short article can help you to better understand lay-offs and some of their legal implications, for specific advice, it is recommended that you seek advice from a lawyer.

A “layoff” can be temporary or it can be permanent. In Ontario layoff is considered to be temporary when it lasts no more than 13 weeks in any period of 20 consecutive weeks or less than 35 weeks in any period of 52 consecutive weeks, subject to an agreement between then employer and trade union, where applicable. A layoff which exceeds these time periods is considered permanent and usually amounts to termination.

But what does it mean to be laid off?

For people with regular work weeks, you are “laid off” for a given week when, in that week, you earn less than half the money you would earn at your regular pay rate in a regular work week, subject to certain exclusions.[1]

For people with no regular work week, you are “laid off” for a given week when you earn less than half the average amount you would earn per week, based on your earnings in the 12 consecutive weeks prior to the 20 or 52 week layoff periods, depending on the duration of your layoff, and subject to the same exclusions as individuals with regular work weeks.

While many employers are laying off their employees during this global pandemic, the fact is that, more often than not, layoffs are unlawful, and provide grounds for a claim in constructive dismissal. The courts in Ontario have generally sided with the employee in constructive dismissal claims arising from layoffs where there is either no employment contract at all or there is an employment contract, but the contract does not specifically provide for layoff conditions.

If you have been laid off, but are unsure whether your layoff is permanent or temporary, you are unsure whether your layoff was lawful, or if you are unsure whether you have been laid off at all, it is recommended that you seek advice from a lawyer. Every person’s situation is unique, and general guidelines may or may not apply to your unique circumstances.

[1] A week is excluded from counting as a lay-off week when, for one or more days in the week, you are not able to work, are not available for work, are subject to a disciplinary suspension, or you are not provided work due to a strike or lock-out.

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