GM Layoffs in Ontario: What Employees Need to Know

5 minute read
February 25, 2026
Employment & Labour Law, Layoffs

Jennifer Zeilikman

It has been reported by various news sources that GM intends to layoff of up to 1,200 employees (mostly unionized workers) due to American tariffs that continue to negatively influence certain Canadian industries. While this blog is in the context of GM layoffs, it also sets out certain employment law principles related to layoffs that all employees need to know.

Entitlements Under Statute and the Common Law

GM employees who are not unionized fall under provincial jurisdiction and their employment standards will be governed by Ontario’s Employment Standards Act 2000 (“ESA”).

Absent an enforceable contractual term in the employee’s employment contract or agreement, an employer cannot simply tell an employee that there is no more work for them to do in the present and so maybe at a certain date in the future, the employee should be able to continue with their job once the employer has more work. In this situation the “layoff” is a dismissal, and as such, the employee is entitled to both statutory and potentially common law entitlements upon that dismissal.

In this blog, we will look at three key employment law issues that can result from a dismissal (whether or not from a layoff) which are termination pay, severance pay and common law notice.

1. Termination Pay

Termination pay is monetary compensation paid to a dismissed employee in lieu of notice of the termination. Sometimes the employer will provide no notice to the employee or less notice than what the employee should have received from the employer. In those cases, the employer will need to pay the employee termination pay.

The ESA sets out what the employee’s minimum notice period should be under statute. Again, ESA entitlements are minimum entitlements and an employee’s notice period owed under the ESA is based only on how long they have been working for the employer (one week of notice for every year that the employee worked for the employer up to eight weeks). An employee may be entitled to a significantly longer notice period under the common law.

The ESA does have certain specific provisions relating to situations of mass terminations. It is unclear if the layoffs with GM meets the criteria under the ESA to allow for notice of termination to be received based not on length of service but on numbers of employees being terminated at once. In cases of mass termination, under the ESA where the employer has dismissed 50 – 199 employees the notice period is 8 weeks, 200 – 499 employees is 12 weeks, and 500 or more employees is 16 weeks.

The mass termination rules under the ESA do not apply if the number of employees whose employment is being terminated represents not more than 10 per cent of the employees who have been employed for at least three months at the establishment and none of the terminations are caused by the permanent discontinuance of all or part of the employer’s business at the establishment.

2. Severance Pay

Termination pay and severance pay are not the same thing, and these two terms are commonly interchanged erroneously or simply are confused with each other. An employee is only entitled to severance pay upon dismissal if they meet certain criteria that are set out in the ESA. Under the ESA, the employee must have worked for the employer for five (5) or more years and the employer must have a payroll of at least $2.5 million. An employee may also be entitled to severance pay if the employee was subjected to a mass termination in accordance with the ESA. If those criteria are not met, then the employee will not be able to obtain “severance pay.”

3. Common Law Notice

An employee may be entitled to a significantly longer notice period under the common law. For instance, depending on the individual nature of the case, a wrongfully dismissed employee who was terminated without cause may be entitled to over 24 months of common law notice. The amount of common law notice is determined by using a variety of factors. These factors include:

the employee’s age;
length of service;
character of employment (such as the employee’s job description or position); and
the availability of similar employment, having regard to the experience, training and qualifications of the employee.

However, an employment contract or employment agreement may have a termination clause that limits a dismissed employee’s right to notice to the minimum entitlements under the ESA. It is important that a dismissed employee contact an employment lawyer so that the lawyer can review the employment contract for the employee to see what the employee is entitled to upon termination

Layoffs in the Context of Unionized Workers

It is our understanding that that bulk of the employees who have been laid off by GM are workers who are unionized. The process of layoffs in the union context is very different to that of a non-unionized employee.

The first major difference is that unionized worker’s rights in a situation of a layoff or mass terminations will be set out in the worker’s collective agreement. A collective agreement will have terms and procedures set out as to how a layoff will be rendered between a worker, the union and the employer as well as what steps the employer must follow before they can layoff an employee. For example:

the collective agreement will set out what are the notification requirements of a layoff (in most cases a worker must be notified of an upcoming layoff in writing);
what factors of selection are in place (such as protecting workers with greater seniority from layoff);
whether there will be any requests for voluntary layoffs;
what recall rights will be in place;
whether there are “bumping” rights; and
if there will be any offers for early retirement.

In cases where the layoff becomes a termination of employment, the worker may still be offered termination and severance pay as compensation. The amount of termination and severance pay could be determined using several factors including the type of job the worker had and the length of time the worker was employed.

Workers who are unionized and have questions about layoffs should contact their union representative. However, we also encourage a worker to contact an employment lawyer if the worker has questions about the collective agreement and their union representative is not available or not willing to assist the worker.

How Zeilikman Law Can Help

At Zeilikman Law, we have helped many employees who work in all types of industries, including federal employees and their provincial counterparts, protect their employment rights when they have experienced a layoff. An employment lawyer, like the ones at Zeilikman Law, routinely assists employees in cases of wrongful dismissal by reviewing the unique facts of their case, developing a strategy to place the employee in the best possible position in an effort to protect their rights to compensation upon dismissal and to act as the employee’s advocate in order to ensure that the employee’s legal rights are enforced.

For more information about the issue of layoffs in employment law, please refer to our blogs entitled:

If you’re an employee who has been affected by GM layoffs in Ontario, call Zeilikman Law at (905) 417-2227 today or here for a confidential consultation.

The above article is for general information purposes only, does not constitute legal advice or create a solicitor-client relationship. Because each case is unique and factually driven, if you have concerns with regard to the foregoing issues, please make an appointment with one of our lawyers or a qualified legal practitioner elsewhere. We represent clients in the Greater Toronto Area including Toronto, North York, Markham, Vaughan, Thornhill, Newmarket, Aurora, Brampton, Mississauga, Barrie, Ajax, Whitby, Pickering and Oshawa.