Temporary layoffs: Understanding the right

Knowing the rules and the importance of a contractual provision is important for employers who want the option to lay off workers temporarily
By Alexander Kowal
|Canadian Employment Law Today|Last Updated: 06/20/2018

Layoff is a word often used to describe termination of employment, but for many employees who specialize in seasonal or fluctuating industries, the ability to temporarily lay off employees for a period of time and then bring them back when there’s work available is essential to doing business. But those employers must follow certain rules and practices to ensure they are able to manage employees whose work comes and goes a different times of the year.

A common misconception in employment law is an employer’s right to temporarily lay off an employee. In order to understand how this misconception arises, we need to properly understand what a temporary layoff is. While the word layoff is often synonymous with termination, a temporary layoff differs from a permanent layoff or termination in that the employee remains an employee of the employer, but the employer — often for financial, seasonal or production-related reasons — advises an employee or group of employees not to report to work for a period of time. This period of time may be undefined or clearly defined, depending upon the employer’s business requirements or the issue giving rise to the temporary layoff. When used properly, a temporary layoff can be an effective arrow in an employer’s quiver, allowing for greater flexibility to meet operational demands.

Below we will discuss the common mistakes employers make (and the consequences) when they conduct temporary layoffs. We will also outline strategies employers can utilize to mitigate and practically eliminate the risk associated with conducting a temporary layoff.