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Can my employer lay me off permanently because of COVID-19?

Can my employer lay me off permanently because of COVID-19?
June 17, 2020

The government of Ontario made an emergency order that changed the rules for layoffs caused by COVID-19. A layoff is when an employer cuts all of a worker’s hours because there’s not any work for them to do. Layoffs can be permanent or temporary.

In Ontario, when people are permanently laid off, the employer usually has to pay termination pay if the worker:

  • has been employed for more than 3 months, and
  • was not terminated for misconduct.

The Employment Standards Act says that the amount of termination pay depends on how long you’ve worked for your employer.

Change to the law about layoffs

As of March 21, 2020, your employer can cut your hours to zero without it counting as a layoff. This rule only applies if your hours have been cut because of COVID-19.

Instead of being “laid off”, your employer will put you on an unpaid “emergency leave”. This means that you can’t go to the Ministry of Labour to make your employer give you termination pay.

You’ll also not be able to get severance pay, which is extra money that employees of large companies can get when they’re laid off or fired.

If you’re on an unpaid emergency leave, your employer does not have to pay you. They can keep you on emergency leave for up to 6 weeks after the end of the COVID-19 emergency in Ontario.

Your employer also does not have to pay your benefits, unless they were already paying them on May 29, 2020.

If you’re permanently laid off

If your employer tells you that you’ve been permanently laid off, you can still make a claim with the Ministry of Labour about your right to termination pay, which is normally based on how long you have worked. The change to the law does not affect you if your employer admits that your layoff is permanent.

Apply for the CERB

If you’re on unpaid emergency leave, you probably qualify for the Canada Emergency Response Benefit (CERB). The CERB can provide people with up to $500 a week if they lose work because of COVID-19.

For more information about applying for the CERB, read Who can get the Canada Emergency Response Benefit (CERB) and how do I apply?

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