In early May 2025, General Motors Canada confirmed it would be eliminating approximately 750 jobs at its assembly plant in Oshawa, Ontario. The announcement comes as part of a shift in production, with light-duty truck manufacturing to cease by early June. While the company has stated that impacted workers will be offered positions at other GM facilities or given retirement incentives, the news still leaves hundreds of workers and their families facing significant uncertainty.

This situation is not unique to GM. Mass layoffs are an unfortunate reality in many industries in today’s economic climate, shaped by automation, supply chain fluctuations, environmental transitions, and global restructuring. If you are an Ontario worker impacted by a large-scale layoff, it is crucial to understand your legal rights and obligations.

The Legal Framework for Mass Layoffs in Ontario

The Employment Standards Act, 2000 (ESA) governs employment relationships for non-unionized workers in Ontario. For unionized employees, collective agreements and arbitration frameworks under the Ontario Labour Relations Act also apply.

When 50 or more employees are terminated at a single location within a four-week period, the employer is required to follow the mass termination provisions of the ESA. These provisions include:

• Extended notice periods
• Posting of notices in the workplace
• Specific timelines for notification to the Ministry of Labour

In GM’s case, while the company may be offering transfers and retirement options, the legal characterization of a “termination” under the ESA is essential. If an employee’s role is discontinued and they do not accept another position or retirement, their employment is effectively terminated, triggering ESA obligations.

Minimum Notice Periods and Severance for Mass Terminations

Mass terminations have their own minimum notice periods and severance requirements under Ontario employment law.

Minimum Notice Periods

The Termination and Severance of Employment (Regulation 288/01 under the Employment Standards Act) prescribes the following minimum group notice periods:

• 8 weeks’ notice if 50–199 employees are terminated
• 12 weeks’ notice if 200–499 employees are terminated
• 16 weeks’ notice if 500 or more employees are terminated

This notice may be provided as working notice or pay in lieu of notice.

Severance Pay

In addition to these notice requirements, employees may also be entitled to severance pay, which is separate from termination notice. Severance is owed if:

1. The employer has a payroll of at least $2.5 million, or
2. The layoff affects 50 or more employees within a six-month period due to a permanent discontinuance of all or part of the business.

Severance pay is calculated as one week per year of service, up to a maximum of 26 weeks. However, it is critical to note that this entitlement is the minimum. Many employees may be owed more under common law.

Common Law Entitlements: Going Beyond the ESA Minimums

In many cases, Ontario employees are entitled to much more compensation than the Employment Standards Act minimums. This is especially true for long-service, older, or specialized workers whose job loss makes finding new employment difficult.

Courts in Ontario may award common law reasonable notice, which can be several months or even more than a year of salary, depending on factors such as:

• Length of service
• Age
• Nature of the position
• Availability of similar employment

You may be eligible for this enhanced compensation if your employment contract does not contain an enforceable termination clause that limits your rights to ESA minimums. Employees should have their severance package reviewed by a lawyer before signing a release.

Transfers and Reassignments: Are They Mandatory?

GM’s announcement indicates that impacted employees will be offered alternative positions at other facilities. While this may sound like a generous option, it is not always a legal substitute for severance.

Ontario courts have held that employees are not automatically required to accept a transfer to a new location, particularly if the move is disruptive, such as involving long commutes, relocations, or changes in job duties or compensation.

If an employee declines a transfer and is then terminated, they may still be owed notice and severance unless the contract explicitly requires relocation, or the new position is substantially the same and the refusal is unreasonable.

Workers should seek legal advice before declining or accepting a reassignment offer.

Retirement Incentives and Voluntary Departures

Some companies may offer retirement incentives to older employees to reduce headcount voluntarily. These packages may include lump sum payouts, early pension eligibility, and benefits extensions.

It is essential to understand that accepting a retirement package may impact your ability to later sue for wrongful dismissal or collect Employment Insurance (EI). Signing a retirement or resignation agreement usually includes a full release of legal claims.

Before accepting such a package, consult with an employment lawyer to determine whether it is more or less favourable than your legal entitlements. What looks attractive on the surface may fall short of what you could claim through a formal termination.

What About Unionized Workers?

Workers at facilities like GM’s Oshawa plant may be unionized, and therefore are covered by collective agreements. These agreements generally outline most aspects of termination, including:

• How layoffs must occur
• Whether seniority determines who is let go
• What benefits, notice, or severance applies
• Rights of recall and bumping

In unionized environments, the grievance process is typically the method by which disputes are resolved. If a worker believes the layoff or severance is improper, they must work through their union to challenge it.

That said, unions are not always perfect. If a union fails to fairly represent its members in addressing wrongful layoffs, workers may have a claim for duty of fair representation against the union.

Employment Insurance and Government Support

Laid-off workers are generally eligible for Employment Insurance (EI) regular benefits, provided they meet the necessary insurable hours and have not voluntarily resigned without just cause.

Employees should apply for EI as soon as they are laid off. Delay can result in loss of benefits. Service Canada may expedite processing and coordinate with large employers to facilitate claims in mass terminations.

Workers may also qualify for job retraining programs or other supports under Ontario’s Employment Ontario services.

When a “Temporary” Layoff Turns Into Termination

Sometimes employers implement what they call a temporary layoff, hoping to recall employees later. However, under the Employment Standards Act, a layoff lasting more than 13 weeks in a 20-week period (without continuation of benefits) or more than 35 weeks (with benefits) can automatically become a termination.

When that happens, termination and severance entitlements are triggered. Employers must be cautious when extending layoffs, and employees should be aware that in some circumstances, an extended layoff could be construed as constructive dismissal.

What Should You Do If You’re Part of a Mass Termination?

Or if you’re part of any large-scale layoff in Ontario, here are key steps to take:

1. Carefully review all documents: This includes any termination letters, retirement offers, or reassignment proposals.
2. Don’t sign anything right away: Severance offers often come with legal waivers. Once signed, your rights may be lost.
3. Consult an employment lawyer: You may be entitled to more compensation than your employer offers.
4. Promptly apply for EI: Don’t wait, even if you’re unsure of your next steps.
5. Keep records: Maintain notes, communications, and any internal company postings about the layoff.

Grosman Gale Fletcher Hopkins LLP: Toronto Employment & Labour Lawyers Advising on Mass Terminations

The GM layoffs in Oshawa underscore how quickly economic decisions can impact hundreds of workers. At Grosman Gale Fletcher Hopkins LLP, we understand that mass layoffs are more than just statistics; they involve real people, real families, and real consequences. Our skilled employment and labour lawyers help employers and employees understand their rights and entitlements and create robust legal solutions in mass terminations. To schedule a consultation, please call 416-364-9599 or contact us online.