Definition of Layoff
A layoff refers to the termination of an employee’s employment by the employer for reasons unrelated to employee misconduct. It is generally driven by economic, organizational, or administrative factors, such as restructuring, a decline in business activity, or the elimination of a position.
A layoff is different from dismissal, which is based on an employee’s conduct or unsatisfactory performance.
Important notice – The content presented in this article is provided for informational purposes only. It does not constitute legal advice or personalized professional advice. Every management or employment termination situation may involve specific circumstances. We recommend consulting a lawyer, legal advisor, or qualified HR professional before making a decision.
Common Reasons for Layoffs
Some situations that may lead to a layoff include:
- Internal reorganization or restructuring
- Partial or complete closure of the business
- Outsourcing of certain services
- Declining revenues or budget reductions
- Automation of certain tasks
What Does the Act Respecting Labour Standards Provide?
In Quebec, employers must comply with certain requirements when proceeding with a layoff:
- Provide written notice, or equivalent compensation, based on the employee’s length of service
- Submit a notice to the Minister of Labour in the case of a collective dismissal
- Issue a Record of Employment to allow the employee to apply for Employment Insurance
These provisions represent minimum legal standards. Individual agreements, collective agreements, or internal policies may provide additional protections.
Layoff, Dismissal, or Temporary Layoff?
| Term | Description |
|---|---|
| Layoff | Permanent termination initiated by the employer, without employee misconduct |
| Dismissal | Termination for disciplinary reasons or unsatisfactory performance |
| Temporary layoff | Temporary interruption of employment with the possibility of recall |
