Facing a layoff in Canada? You’re not alone.

Layoffs affect thousands of employees across the country every year, and it’s crucial to understand your rights and the steps to take if you’re impacted.

At Samfiru Tumarkin LLP, we specialize in employment law and have helped over 50,000 individuals secure their severance pay and protect their workplace rights.

Whether you’re dealing with a temporary or permanent layoff, this guide breaks down everything you need to know about layoffs in Canada, including the legal framework, your entitlements, and recent trends.

What is a layoff?

A layoff happens when an employer temporarily or permanently suspends your employment, often due to business challenges such as financial losses, restructuring, or market changes.

While temporary layoffs are sometimes allowed under provincial law, they must follow strict guidelines.

Permanent layoffs, on the other hand, often entitle employees to severance pay under Canada’s common law system.

• LEARN MORE: Severance Pay Rights by Company

Your rights during a layoff in Canada

When you’re laid off, you have legal protections. Here are some key rights employees should know:

• Severance Pay: If you’re permanently laid off, your employer must provide severance. This applies even if they cite financial hardship or restructuring as the reason for your termination.
• Notice of Termination: Employers are legally required to provide notice or pay in lieu, based on your employment contract and provincial laws.
• Employment Insurance (EI): You may qualify for EI benefits if you’ve been laid off. This can provide financial support while you search for new opportunities.

Temporary layoffs vs. permanent layoffs

Temporary layoffs

Under employment law, temporary layoffs are generally allowed only if:

• They are explicitly permitted in your employment contract.
• You have previously accepted a layoff with the same employer.

If these conditions are not met, the layoff is considered illegal. You may be able to claim constructive dismissal, entitling you to severance.

Permanent layoffs

When an employer terminates your employment without plans to recall you, it is called a termination without cause. you are entitled to:

How to respond to a layoff in Canada

If you’ve been laid off, follow these steps to protect your rights and secure your financial future:

1. Request documentation: Ask for a written record of the layoff, including details about severance, notice, and recall (if applicable).
2. Review your contract: Look for clauses about layoffs, notice, and severance pay. Employers can’t impose conditions beyond what’s legally permitted.
3. Speak to an employment lawyer: Before accepting any severance package or signing agreements, consult with an employment lawyer at Samfiru Tumarkin LLP to ensure you’re receiving what you’re owed.

About to be placed on a layoff? Review our guide on How To Refuse a Layoff for five important tips.