Temporary Layoffs: The 13-Week Clock Employers Don't Tell You About

The Statutory Clock

Section 56 of Ontario's Employment Standards Act, 2000 (ESA) defines a "temporary layoff" and establishes the time limits that distinguish a temporary layoff from a termination.

A temporary layoff is a layoff of not more than 13 weeks in any period of 20 consecutive weeks. If the layoff exceeds 13 weeks within any rolling 20-week window, the ESA deems the employee to have been terminated on the first day of the layoff.

There is an alternative extended timeline: a layoff of not more than 35 weeks in any period of 52 consecutive weeks, but only if specific conditions are met during the layoff. These conditions include the employer continuing to make substantial payments to the employee, the employer continuing benefit plan contributions, the employee receiving supplementary unemployment benefits, the employee being employed elsewhere and entitled to supplementary unemployment benefits, the employer recalling the employee within a timeline approved by the Director of Employment Standards, or the layoff being agreed to by the employee in writing.

If none of these conditions is met — and for most layoffs, they are not — the 13-week clock is the operative timeline.

How the Clock Works

The clock starts on the first day of the layoff — the first day on which the employee does not receive work or pay. It runs continuously from that date. Every week that passes without the employee returning to work counts toward the 13-week limit.

The 20-week window is rolling. This means the clock does not reset at the end of 20 weeks. Instead, the test asks: within any 20-consecutive-week period, has the employee been laid off for more than 13 weeks? If yes, the layoff is no longer "temporary" and the ESA deems a termination.

What Stops the Clock

The clock stops if the employee is recalled to work. But the recall must be genuine — the employee must actually return to work, not merely be notified that they might be recalled. An employer that recalls an employee for a single day and then lays them off again is attempting to manipulate the clock, and the Ministry of Labour will likely look at the substance of the arrangement.

Partial recall — the employee is given some work but not full-time hours — raises a question about whether the employee is still "laid off." The ESA does not provide a bright-line threshold for how much work constitutes a recall versus a continued layoff. The analysis is fact-specific.

What Happens at Week 13

When the 13-week limit is reached, the ESA deems a termination to have occurred. The deemed termination is retroactive to the first day of the layoff. This retroactive dating is important because it establishes the date from which the employee's entitlements are calculated and the date from which limitation periods begin to run.

Upon the deemed termination, the employer owes the employee termination pay (section 57), calculated based on the employee's length of service, severance pay (section 64), if the employee has five or more years of service and the employer meets the payroll or mass termination threshold, accrued but unpaid vacation pay, and any other outstanding ESA entitlements.

The employer's obligation to pay these amounts arises automatically. The employee does not need to make a demand, file a complaint, or take any other action. However, as a practical matter, the employee should contact the employer in writing to confirm that the 13-week limit has been reached and to request payment of their entitlements.

The Common Law Dimension

The ESA's 13-week clock is the statutory floor. The common law provides additional and more employee-protective rights.

At common law, an employer has no inherent right to lay off an employee. The employment contract is a bilateral agreement in which the employer agrees to provide work and compensation. A unilateral suspension of that obligation — sending the employee home without work or pay — is a fundamental breach of the contract, constituting constructive dismissal.

The Ontario Court of Appeal confirmed this principle in Elsegood v. Cambridge Spring Service (2001) Ltd., 2011 ONCA 831: "At common law, there is no general right for an employer to lay off employees without their consent."

This means that an employee who is laid off has an immediate common law right to treat the layoff as constructive dismissal — from day one, without waiting for the 13-week ESA clock to expire. The employee can resign, claim constructive dismissal, and pursue damages for wrongful dismissal based on the reasonable notice period.

The Strategic Choice

The employee who is laid off faces a strategic choice:

Option 1: Wait for the 13-week clock. The employee waits passively during the layoff. If the employer recalls them within 13 weeks, the layoff was temporary and the employee returns to work. If the clock expires, the ESA deems a termination, and the employee is entitled to statutory entitlements. The risk is that 13 weeks of waiting costs the employee three months of income (beyond any EI benefits) and delays their ability to pursue a common law claim.

Option 2: Claim constructive dismissal immediately. The employee treats the layoff as a constructive dismissal from day one and pursues common law damages. The risk is that if the employer had a contractual right to lay off the employee (through a layoff clause in the employment contract), the constructive dismissal claim may fail.

Option 3: Apply for EI and keep options open. The employee applies for EI benefits immediately (they are eligible upon layoff), documents the layoff and the employer's communications, and monitors the situation. If the employer recalls them, they return. If the employer does not recall them, they pursue their statutory and common law rights once the 13-week clock expires or sooner if they obtain legal advice recommending earlier action.

Option 3 is typically the most prudent approach for employees who are uncertain about their rights or who want to preserve all options. The key is to act — apply for EI, document everything, and seek legal advice — rather than waiting passively.

The Contractual Layoff Clause

The common law right to treat a layoff as constructive dismissal is subject to an important exception: if the employment contract contains a clause that expressly permits the employer to lay off the employee, the layoff may not constitute constructive dismissal.

A valid layoff clause must be clear and unambiguous. It must specifically contemplate the possibility of temporary layoff and should specify the circumstances under which a layoff may occur, the maximum duration, any benefits or payments during the layoff, and the employee's recall rights.

A general clause giving the employer discretion to "modify the terms of employment" is not sufficient. The layoff must be specifically contemplated.

Even with a contractual layoff clause, the employer's exercise of the layoff right must be reasonable and in good faith. A layoff that lasts indefinitely, with no communication about recall prospects and no continuation of benefits, may constitute constructive dismissal despite the contractual clause — because the employer's conduct demonstrates an intention not to restore the employment relationship.

The Working for Workers Act Impact

Ontario's Working for Workers Act, 2024 (Bill 190), which received Royal Assent in October 2024, made several amendments to the ESA, though it did not fundamentally change the temporary layoff framework. The 13-week clock remains the primary mechanism for converting temporary layoffs to deemed terminations.

However, the broader context of the Working for Workers Acts — including the enhanced worker protections introduced in Bills 27, 79, and 149 — reinforces the legislative trend toward greater employee protection. Employers that rely on the temporary layoff mechanism should be aware that the legal environment is evolving and that the margin for employer-friendly interpretation is narrowing.

What Employees Should Know

The clock starts on day one. From the first day of layoff, the 13-week countdown begins. Mark the date.

You are likely eligible for EI immediately. Apply as soon as possible. There is a one-week waiting period, and benefits are not retroactive to the date of application.

You may not have to wait 13 weeks. At common law, you may have the right to treat the layoff as constructive dismissal from day one. Consult an employment lawyer early in the process.

Document everything. Keep records of the layoff notification, any communications from the employer about the layoff, any discussions about recall, and the dates of any partial work during the layoff period.

Do not sign anything without advice. If the employer presents a severance package after the 13-week clock expires, have it reviewed by an employment lawyer before signing. Your common law entitlement may significantly exceed the statutory minimums.

The clock is your friend. The 13-week mechanism exists to protect employees from indefinite, unpaid limbo. It converts a vague "temporary" situation into a concrete legal event — a deemed termination — that triggers specific rights and entitlements. Understanding the clock puts you in control.

The temporary layoff is the employer's attempt to press pause on the employment relationship without paying for it. The 13-week clock is the law's response: there is a limit to how long the pause can last before it becomes an ending.