Let’s start with the basic definition of Layoff which is common in most of the countries, i.e., Temporary suspension or interruption of working hours of an employee for a statutory layoff period, caused due to external factors like recession, loss in business, pandemic etc, apart from that, the employer has the right to summon the employee back to work at any moment before the statutory period expires and contractual relationship remains intact. With that being known let’s look into how layoff laws work in Canada and how are they different from that in India.
Federal and provincial laws both control layoff regulations in Canada.[1]
The Canada Labour Code, which is enacted at the federal level, specifies the minimum requirements for firing and layoffs. The Code allows for the temporary termination of an employee for a maximum of three months without notice or payment in lieu of notice. Unless the employee consents to a longer layoff time, the employer is required to give notice or pay in place of notice if the layoff is prolonged above three months.
For employees who are laid off, there are additional protections in some provinces, including Ontario and British Columbia. In Ontario, for instance, if an employee is laid off for longer than 13 weeks within a 20-week period or for longer than 35 weeks within a 52-week period, the layoff is regarded as a termination, and the employer is required to give notice or compensation in lieu of notice. It is significant to highlight that employees who are members of unions can be entitled to additional protections under their collective agreements. It is advised that if you are an employee who has been laid off, you consult with an employment lawyer or get in touch with the appropriate provincial government office for further information on your rights and alternatives. Your employer is required to give you particular paperwork, such your Record of Employment (ROE), details about how long your benefits will last following your termination, and the date your last pay check will be sent. Also inquire about severance, including the amount they plan to pay and the estimated delivery date. Employers may offer additional compensation, such as a scholarship for education. In the event that you leave your job in Canada, you may be entitled for severance pay. However, it’s common for employees who leave their jobs or are fired to not be entitled to severance compensation. Even if they are not entitled to severance pay, probationary employees may still be eligible for other forms of compensation like vacation pay.
The Employment Standards Act (ESA) requires severance pay, which is calculated depending on a number of factors, including position and duration of employment. In certain cases, employers could also opt to go above the minimum amount of severance required under the ESA. Comparatively speaking, if a worker is laid off in India, they are entitled to a payment equivalent to 50% of their base salary plus a daily allowance for the period they were jobless. The aforementioned compensation is only available to employees who have worked continuously for at least one year. Several factors might determine the length of time you will be laid off. If you are receiving employment insurance (EI) benefits, you are only permitted to be laid off for a year. However, if you are not receiving EI benefits, there is no limit on how long you may be laid off.
Now if we also look from Point of view of disabled employees, Despite the fact that the Canadian Human Rights Act makes it illegal for companies to discriminate against employees because of a disability. Consequently, a worker cannot be dismissed by their employer solely due to the fact that they are receiving disability payments or have a disability. If an employer has a legitimate reason to want to let a person on disability depart, they must first try to address their needs. Only after making a reasonable effort to accommodate the employee may the corporation lay off workers. If you were dismissed while on disability, you can be qualified for a human rights complaint and corresponding compensation.
Once your employment arrangement has come to an end, your employer is no longer compelled to provide you work. Some companies could opt to rehire laid-off employees after some time has passed, while others might decide against it. This can be the result of external factors like economic decline or job cuts. In other words, there is no time restriction on the length of a layoff, and finding new employment is not an option.
Now if you look from point of view of an Employer, for a variety of reasons, including the fact that they reduce payroll costs while, in most situations, retaining the employment relationship, employers may decide that temporary layoffs are appropriate for their business needs. If a laid-off worker is eligible to get employment insurance (EI), the company’s staff may be able to receive some replacement income while they wait to start working again. Temporary layoffs do not come without risk. Even though layoffs are permitted by law, they are sometimes seen as a “constructive dismissal” under common law, which gives employees the impression that their job is over when they are laid off. In that circumstance, an employee may assert statutory, contractual, or common law termination entitlements. However, outside of Quebec, Canadian courts and arbitrators have decided that authorization for layoffs may be given either directly or implicitly through employment contracts, collective bargaining agreements, workplace rules, or normal business practise by both employers and employees. The employer is free to conduct layoffs in compliance with the law without resulting in a termination if there is an express or implied agreement.
If we look into Indian laws to draw comparison, Indian labour rules refer to retrenchment rather than “layoff” in its stated terminology. In India, layoffs are governed by the Industrial Disputes Act of 1947, which outlines the requirements and processes that firms must adhere to before terminating employees. The Act states that an employer may only retrench employees in certain circumstances, such as financial hardship, technical advancements, or a change in the nature of the business.
The employer is required to notify the affected employees and the relevant government agencies of the layoff.
The Act also stipulates that retrenched employees will receive compensation based on their length of service and other circumstances.
So, overall layoff laws are quite similar in both the countries but specifically different based on layoff time period, severance compensation, etc and I would say that it’s a good scenario as ground situation of both countries vary.
[1] Employee and social development (2023, January 1). Rights on termination of employment.Canada.ca
https://www.canada.ca/content/dam/esdc-edsc/documents/services/labour-standards/reports/termination/Labour_Standards_10-EN.pdf
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