Experts Warn: Understand the Risks Before Accepting a Seasonal Layoff

Workers in industries that have seasonal slowdowns may face a temporary layoff from their employer. However, experts advise workers to understand the risks before agreeing to be temporarily laid off.

“The intention is that the employment relationship will resume,” explained Brittany Taylor, an employment lawyer and partner at Rudner Law. While the employee remains on the roster, services and pay are paused for a period.

A seasonal layoff, common in employment law in various provinces, allows employers to temporarily pause their staff’s work during slow business periods or off-seasons. This differs from employment termination, where the promise of rehiring is not guaranteed.

For example, a landscaping or construction company might implement a seasonal layoff for workers during the winter months.

While seasonal layoffs are permitted in industries with seasonal fluctuations, companies without regular slowdowns cannot temporarily lay off employees without their consent.

“If an employer were to unilaterally place an employee on a temporary layoff, the employee could claim constructive dismissal,” Taylor noted.

Both parties must agree to protect themselves legally, according to Taylor.

Employers can request consent from employees facing a downturn or shortage of work to implement a layoff, she added.

While a worker can decline a seasonal layoff, there is a risk that the employer may choose to terminate the employee if there isn’t enough work or resources available, Taylor cautioned.

During a seasonal layoff, employees are free to seek other work or apply for employment insurance to sustain themselves until their return or call back, she stated.

Vancouver-based career coach Elena Giorgetti suggested that workers between seasonal cycles seek flexible jobs that allow them to return to their original roles later.

Preparing for seasonal layoffs is advisable for industries prone to such cycles, Giorgetti recommended.

Seasonal layoff terms have become common in employment contracts, especially since the COVID-19 pandemic, noted Michelle McKinnon, partner at Cassels Brock & Blackwell LLP in Vancouver.

McKinnon mentioned that many employers updated employment agreements following the pandemic to include seasonal layoff clauses requiring consent for future use.

Taylor acknowledged that negotiating out of these clauses has become challenging due to employers’ real-world experience with seasonal layoffs.

Temporary layoff terms vary by province, with federal labor standards defining temporary layoffs as under three months or over three months but less than twelve months with a promise of rehiring.

McKinnon stressed that employers must bring back seasonally laid-off workers or face consequences.

If the layoff extends beyond the maximum period and workers are not rehired, it may result in termination, requiring severance payments and legal consequences, McKinnon warned.

Severance payments are backdated to the start of the seasonal layoff and depend on the employee’s age and tenure with the company.

According to McKinnon, substantial changes to employment contracts without employee agreement can lead to legal issues, such as constructive dismissal.

Taylor mentioned that workers can take legal action if they suffer following a seasonal layoff and must actively seek new employment to mitigate damages.