Closing for the off-season: temporary layoff rules for restaurants in BC and Ontario

Restaurants in resort and tourist areas often close or cut back hard in the off-season: ski towns in the summer, cottage country in the winter, wine regions in January. Owners sometimes assume they can send staff home and call them back in the spring. Employment standards law puts limits on that. A temporary layoff that runs too long is treated as a termination, and termination brings pay and notice obligations. Know the basic rules in British Columbia and Ontario, and talk to an employment lawyer before you lay anyone off.

What is a temporary layoff?

A temporary layoff is a period when an employee is off work because there is no work for them, with the expectation that they will return. In both provinces, the law limits how long it can last before it becomes a termination.

What is the basic limit in British Columbia?

British Columbia's Employment Standards Act sets a limit on how long an employee can be temporarily laid off within a longer period, and the Province's guidance explains how the weeks are counted. Check the BC Employment Standards Branch for the current limit. If the layoff goes beyond it, the employee is treated as terminated from the first day of the layoff for the purpose of length-of-service compensation. Guidance also says a layoff needs a basis: it must be agreed in advance, be normal and expected in the industry, or be part of the employment contract. The Branch's guidance explains what counts as a week of layoff. An extension is possible in limited cases, for example by agreement or with approval, so ask the Employment Standards Branch.

What is the basic limit in Ontario?

Ontario's Employment Standards Act also limits how long a temporary layoff can last, and a longer layoff is possible only in set cases. Past the applicable limit, the employee is treated as terminated from the first day of the layoff. The rules on extensions can change, so check the Ministry of Labour's current guidance on ontario.ca rather than relying on older summaries.

Is there a risk beyond the statutory limit?

Yes. In both provinces a layoff can still amount to constructive dismissal under common law, even if it fits within the statutory limit, when the employment contract does not give you the right to lay off. Unless a contract explicitly grants that right, a temporary layoff usually amounts to constructive dismissal. This is why many seasonal employers put the layoff right and the seasonal pattern in the written contract.

What does a long off-season mean for a restaurant?

If your closure is longer than the layoff limit, a straightforward layoff will not work. Options include:

• Seasonal contracts, in which employment runs only for the season, with clear dates and terms. Seasonal or fixed-term arrangements are treated differently from a layoff, but the wording and your province's rules matter.
• Termination with notice or pay, followed by rehiring in spring, with a rehire policy for loyal staff.
• Reduced hours, rather than a full layoff, to keep staff attached.
• Work-sharing, where the federal government has a program to help employers avoid layoffs. Ask Service Canada about eligibility.
• Redeployment, for example to a catering, retail or events line that runs in the quiet months.
• Flexible closing dates, so a closure never reaches the limit.

Which option fits depends on your business, your contracts and the length of closure. A lawyer can tell you which.

What paperwork do you need?

Record of Employment (ROE) forms must be issued when employees stop receiving insurable earnings, which allows them to apply for Employment Insurance. Issue ROEs on time. Keep written notice of the layoff, with the reason and the expected return date. Keep benefits information.

What about benefits and tips?

Rules on benefits during a layoff differ between the provinces, so ask the Employment Standards Branch or the Ministry of Labour. Ask them too how tips count, since tips are not wages.

What should you tell staff?

Tell them early, in writing, the dates, what the arrangement is and what you will do to bring them back. Staff who feel respected are much more likely to return.

What mistakes should you avoid?

Assuming a handshake is enough, letting a layoff run past the limit, issuing late ROEs, or ignoring the contract.

More guides for your business:

• How to get more customers for an Ottawa restaurant: the ByWard Market, Winterlude and the office week
• How many restaurants are closing in Canada in 2026, and why the numbers disagree
• How to get more customers for a restaurant in Saskatoon or Regina

More in the Canadian guides for food businesses.