“A layoff is a termination when there is no clause in the agreement permitting the employer to lay off the employee. When there is such a clause, the layoff is not a constructive dismissal, and therefore not a termination.”
Number one rule of temporary layoffs
While Taylor lost the case, it’s still an “instructive” decision in showing how temporary layoffs work, says Dale.
Most importantly, the employer included temporary layoffs in the employment agreement.
“The reason it’s not allowed for — unless it’s in the contract — is because if you change a substantial term of someone’s employment, like take their work away and perform a temporary layoff, then they can claim that it’s a constructive dismissal. So, essentially, you’ve changed my employment so substantially that you’ve terminated it,” she says.
Employers should note that a temporary layoff could also mean less work, so someone earning less than 50% of their regular earnings, says Dale, citing Ontario legislation.