In Ontario, a temporary layoff automatically becomes a deemed termination once it exceeds 13 weeks within any 20 consecutive weeks, or 35 weeks within 52 weeks if the employer keeps paying benefits. Since November 27, 2025, employers can extend a layoff to just under 52 weeks in 78 weeks with written consent and Director approval, but common law risk remains.

What Are Ontario's Basic Temporary Layoff Time Limits?

Ontario's Employment Standards Act, 2000 sets out the point at which a layoff stops being "temporary" and becomes a termination in law. A layoff can last more than 13 weeks in any period of 20 consecutive weeks, but less than 35 weeks in any period of 52 consecutive weeks, only where the employee continues to receive substantial payments from the employer, continued benefit or pension contributions, or supplementary unemployment benefits, among other qualifying conditions.

Outside of those conditions, the basic rule is simple: 13 weeks of layoff in a 20-week window is the ceiling. Cross it without qualifying for an extension, and the ESA treats the employee as terminated on the first day of the layoff, not the day the limit is crossed.

What Changed Under the Working for Workers Seven Act, 2025?

Bill 30, the Working for Workers Seven Act, 2025, received Royal Assent on November 27, 2025 and added a third layoff window on top of the existing 13-in-20 and 35-in-52 rules. Non-unionized employers and employees can now agree in writing to extend a layoff beyond 35 weeks in a 52-week period, provided the total layoff stays under 52 weeks in any 78-week period.

This extended layoff option is not automatic. It requires the employer and employee to agree in writing, with a stated latest recall date and confirmation that the employee cannot withdraw consent, and it requires formal approval from the Director of Employment Standards before it takes effect. Employers must also retain a copy of the approved agreement for three years.

For most employers, this changes the outer boundary of a compliant layoff from 35 weeks to just under 52 weeks in a rolling 78-week window, but only with paperwork, consent, and government sign-off in place.

Can an ESA Compliant Layoff Still Be a Constructive Dismissal?

Meeting the ESA time limits does not automatically make a layoff legal. In Elsegood v. Cambridge Spring Service (2001) Ltd., 2011 ONCA 831, the Ontario Court of Appeal confirmed that an employer has no right to impose a unilateral temporary layoff on an employee, even where the ESA contemplates layoffs, unless that right was specifically agreed to in the employment contract or is an established industry practice.

The Ontario Superior Court applied this same reasoning in Bevilacqua v. Gracious Living Corporation, 2016 ONSC 4127, where a facilities manager laid off for a three month period during a downturn successfully sued for wrongful dismissal and was owed compensation well beyond ESA termination pay, because his contract contained no layoff clause.

In practice, this means two separate legal tracks run at once: the ESA clock (13-in-20, 35-in-52, or the new extended window) and the common law question of whether the employer ever had the right to lay the employee off in the first place. An employer can be fully within ESA time limits and still face a constructive dismissal claim for common law reasonable notice, which is typically far larger than the statutory minimum.

What Must Employers Pay Once a Layoff Becomes a Termination?

Once a layoff is deemed a termination under the ESA, two separate statutory payments can come into play.

ESA termination pay is based on length of service and is calculated at one week of regular wages per completed year of service, capped at a maximum of 8 weeks, regardless of how long the employee has worked there.

Completed years of service	ESA termination pay owed
Less than 3 months	None (no ESA notice requirement yet)
3 months to 1 year	1 week
1 to 2 years	2 weeks
2 to 3 years	3 weeks
3 to 4 years	4 weeks
4 to 5 years	5 weeks
5 to 6 years	6 weeks
6 to 7 years	7 weeks
7 to 8 years	8 weeks
8 or more years	8 weeks (statutory cap)

ESA severance pay is a separate, additional entitlement. It applies only where the employee has at least 5 years of service and the employer has a global payroll of at least 2.5 million dollars, or severed 50 or more employees within a six month period because all or part of the business permanently closed. Where both conditions are met, severance pay equals one week of regular wages per completed year of service, capped at 26 weeks.

Combined, a long-service employee whose employer meets the payroll threshold can be owed both ESA termination pay and ESA severance pay, and that combined statutory floor still sits below what a court might award under common law reasonable notice if the layoff also amounts to a constructive dismissal.

What Should Employers Verify Before Placing Anyone on Temporary Layoff?

• Confirm the employment contract contains an express layoff clause, or that an established industry practice permits layoffs.
• Track the layoff against the 13-in-20 and 35-in-52 week windows from day one, not just from the most recent notice.
• Continue benefit or pension contributions if you intend to rely on the 35-week extension.
• If you need more than 35 weeks, get written employee consent with a firm recall date and secure Director of Employment Standards approval before relying on the extended window.
• Calculate both ESA termination pay and ESA severance pay exposure for any layoff that may be deemed a termination, and budget for potential common law claims separately.

FAQ

Is a temporary layoff automatically legal in Ontario if it stays within ESA time limits?

No. Staying inside the ESA's 13-in-20 or 35-in-52 week windows only means the layoff has not yet become a deemed statutory termination. Under Elsegood v. Cambridge Spring Service, 2011 ONCA 831, the employer still needs a contractual right or established industry practice to impose the layoff, otherwise the employee can treat it as a constructive dismissal at common law from day one.

How long can a temporary layoff last in Ontario in 2026?

The basic limit is 13 weeks in any 20 consecutive weeks. It can extend to just under 35 weeks in any 52 consecutive weeks if the employer continues benefits, substantial payments, or supplementary unemployment benefits. Since November 27, 2025, non-union employers and employees can agree in writing, with Director of Employment Standards approval, to extend a layoff to just under 52 weeks in any 78 consecutive weeks.

What happens if an employer lets a layoff run past the ESA time limit?

The ESA deems the employee terminated, generally as of the first day of the layoff. The employer then owes ESA termination pay based on years of service, and ESA severance pay as well if the employee has 5 or more years of service and the employer meets the payroll or mass-termination threshold.

Can an employee sue for more than ESA termination and severance pay after a layoff?

Yes, if the layoff was not authorized by the employment contract or established practice, the employee may pursue a common law wrongful dismissal claim for reasonable notice, which courts frequently set well above the ESA statutory minimums.

Facing a layoff decision or a possible constructive dismissal claim in Ontario? OptiMaxWork AI can generate a verified answer for your specific case. Get your verified answer

Disclaimer: This article summarizes Ontario's Employment Standards Act, 2000 layoff and termination provisions, the November 27, 2025 amendments under the Working for Workers Seven Act, 2025 (Bill 30), and relevant case law as publicly reported. It is general information, not legal advice, and does not account for your specific contract terms or circumstances. Sources reviewed and captured on August 24, 2026:

• Government of Ontario, "Your guide to the Employment Standards Act: Termination of employment," ontario.ca
• Hicks Morley, "Ontario's Working for Workers Seven Act, 2025 Receives Royal Assent," December 2, 2025
• Legislative Assembly of Ontario, Bill 30, Working for Workers Seven Act, 2025
• BLG, "Compliance with the Temporary Layoff Provisions of the ESA Does Not Insulate Employers," discussing Elsegood v. Cambridge Spring Service, 2011 ONCA 831 and Bevilacqua v. Gracious Living Corporation, 2016 ONSC 4127
• Samfiru Tumarkin LLP, "Severance Pay Ontario: ESA Minimums vs. Common Law"
• Kompa Law, "Termination Pay Ontario: What You're Entitled To"