Layoff in Canada: Your Rights and What to Do Next

Layoffs are a legal and increasingly common part of the Canadian employment landscape. In the technology sector alone, major Canadian layoffs in 2024–2025 affected tens of thousands of workers. Understanding your legal rights, acting quickly on Employment Insurance, and approaching your job search strategically minimises both the financial and professional impact.

Your legal rights — ESA and common law

Your rights when laid off in Canada come from two sources:

1. Employment Standards Act (provincial — varies by province)

Ontario, BC, Alberta, and other provinces each have their own ESA setting minimum notice (or pay in lieu) and, in some cases, severance pay. Ontario ESA example:

• Termination pay (notice): 1 week per year of service (up to 8 weeks maximum) — or pay in lieu
• Severance pay (Ontario only — larger employers): If your employer has a payroll of $2.5M+ and you have 5+ years of service, you are entitled to 1 week's severance for each full year of service (up to 26 weeks)
• Group termination: If 50+ employees are terminated within a 4-week period, additional ESA obligations apply

2. Common law (judge-made law)

Courts have consistently held that Canadian employees are entitled to "reasonable notice" of termination beyond the ESA minimum. Reasonable notice is typically significantly longer than the ESA minimum — based on your age, length of service, position, and availability of similar employment. If you receive less than the common law reasonable notice period and sign a release, you may be giving up significant entitlements. Consider consulting an employment lawyer before signing any termination agreement.

Employment Insurance (EI) after a layoff

If you have lost your job through no fault of your own (layoff, shortage of work), you may be eligible for Employment Insurance (EI) from Service Canada:

• Apply online at canada.ca/en/services/benefits/ei as soon as possible after your last day — EI has a waiting period but your start date is set by your application date
• You need a Record of Employment (ROE) from your employer — they must issue this within 5 calendar days of your last day, or you can apply without it and Service Canada will request it from CRA
• You typically need 420–700 insurable hours in the last 52 weeks to qualify (varies by regional unemployment rate)
• EI pays 55% of your average insurable weekly earnings, up to a maximum weekly amount (approximately $668/week in 2026)

Updating your resume after a layoff

• Update your resume immediately while your achievements are fresh — don't wait until you have a specific role to apply for
• Use "Laid off" or "Position eliminated due to restructuring" as your reason for leaving — this is neutral and well-understood in Canada
• Accurate employment dates — do not extend dates beyond your actual last day
• Request LinkedIn recommendations from your manager and colleagues before the team disperses

Explaining a layoff in Canadian interviews

"The company went through a significant restructuring in Q1 2026 that eliminated my division. It was a business decision driven by [market conditions / organisational changes] — not performance-related. I received a strong reference from my manager and have kept in touch with former colleagues. Since then, I've been [consulting / upskilling / networking] and I'm now focused on finding a role where I can contribute to [connect to the target role]."

Sources: Ontario Employment Standards Act 2000 (ontario.ca, 2026); Service Canada — Employment Insurance (canada.ca/ei, 2026); Canadian employment law — common law notice (HRPA guidance, 2026)