Lay offs and Recalling laid off employees

If you lay-off employees we need to make the insurer aware of when, how long and what benefits are to be extended during the absence.  Many insurers are offering an option to extend LTD coverage (if in place) during the lay-off period up to a maximum of 6 months (Please note that lay-offs with LTD benefits are limited to 6 months and can not be extended to the 35 weeks that the Ontario ESA references.). You are also required to alert the insurer when the laid off employee has quit, been terminated, or has returned to work (recalled)

If you have questions, are laying off, or recalling staff please consult the document below if you are located in Ontario. Any other questions, problems or you need help notifying your insurer, please give us a call (905-886-9203).

Temporary layoff

An employee is on temporary layoff when an employer cuts back or stops the employee’s work without ending their employment (e.g., laying someone off at times when there is not enough work to do). The mere fact that the employer does not specify a recall date when laying the employee off does not necessarily mean that the lay-off is not temporary. Note, however, that a lay-off, even if intended to be temporary, may result in constructive dismissal if it is not allowed by the employment contract.

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Under the ESA, a “temporary layoff” can last:

  • not more than 13 weeks of layoff in any period of 20 consecutive weeks;
  • more than 13 weeks in any period of 20 consecutive weeks, but less than 35 weeks of layoff in any period of 52 consecutive weeks, where:
    • the employee continues to receive substantial payments from the employer;
    • the employer continues to make payments for the benefit of the employee under a legitimate group or employee insurance plan (such as a medical or drug insurance plan) or a legitimate retirement or pension plan;
    • the employee receives supplementary unemployment benefits;

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If an employee is laid off for a period longer than a temporary layoff as set out above, the employer is considered to have terminated the employee’s employment. Generally, the employee will then be entitled to termination pay.