Losing a job is never easy, but when layoffs happen on a large scale, the impact can devastate workers, their families, and entire communities. Ontario’s employment laws impose strict obligations on employers conducting mass layoffs to ensure fairness and provide employees with some level of security. Whether you’re an employee affected by a large-scale dismissal or an employer navigating the process, it’s crucial to understand the legal protections in place.

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What Is a Mass Layoff?

In Ontario, mass terminations occur when an employer dismisses 50 or more employees at an establishment within a four-week period. These situations are governed by Section 58 of the Ontario Employment Standards Act, 2000 (ESA), which provides special protections beyond those for individual terminations.

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Employer Obligations During Mass Layoffs

When an employer decides to lay off a large number of employees, they must follow several key obligations under Ontario law:

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1. Notice of Termination

Employers must provide employees with advance written notice before terminating their employment. The notice period depends on the number of employees being let go:

• 50-199 employees → 8 weeks’ notice

• 200-499 employees → 12 weeks’ notice

• 500 or more employees → 16 weeks’ notice

Employers can either provide working notice, meaning employees continue working until their last day, or pay in lieu of notice, which compensates employees for the notice period without requiring them to work.

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2. Severance Pay

Employees who have worked for at least five years and are terminated due to a mass layoff may be entitled to severance pay, in addition to termination pay. This applies if the employer:

• Has a payroll of $2.5 million or more in Ontario, or

• Is terminating 50 or more employees within a six-month period.

Severance pay is calculated as one week’s pay per year of service, up to a maximum of 26 weeks’ pay.

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3. Filing a Mass Termination Notice with the Government

Employers must notify the Director of Employment Standards at the Ministry of Labour before proceeding with a mass layoff. The notice must include details such as the number of employees affected, the termination date, and reasons for the layoffs.

The official notice date to the government is important because the termination clock does not start until the Ministry is informed. If an employer fails to file the notice, affected employees may be entitled to additional compensation.

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4. Duty to Bargain in Good Faith (For Unionized Workplaces)

If the workforce is unionized, the employer must negotiate with the union regarding severance, benefits, and potential alternatives to layoffs. Some collective agreements may also require additional notice or payout terms beyond ESA requirements.

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5. Continued Benefits During Notice Period

During the statutory notice period, employees must continue receiving all benefits they would normally be entitled to, including health insurance, pensions, and vacation accrual. Employers who fail to maintain benefits could face legal consequences.

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Employee Rights & Legal Recourse

If an employer fails to meet these obligations, employees may file a claim with the Ministry of Labour or pursue a wrongful dismissal lawsuit. Additionally, if an employer shuts down operations suddenly, employees may be eligible for unpaid wage claims under Ontario’s Wage Earner Protection Program (WEPP).

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Common Employer Violations During Mass Layoffs

• Providing insufficient or no notice

• Failing to file a mass termination notice with the government

• Wrongly classifying layoffs as "temporary" to avoid severance pay

• Failing to provide proper benefits continuation

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Final Thoughts

Ontario law aims to protect employees from the harsh effects of mass layoffs by ensuring they receive proper notice, severance pay, and continued benefits. However, not all employers follow these rules, making it essential for employees to know their rights and seek legal advice if necessary.

If you or someone you know is facing a mass layoff, consider speaking with an employment lawyer to ensure you receive the full compensation you’re entitled to under the law.