A new round of U.S. tariffs on Canadian steel and aluminum is triggering layoffs across Ontario, leaving many workers uncertain about their severance rights and access to disability benefits, according to employment lawyers.
The 25% tariff, which mirrors similar trade actions in 2018, is hitting manufacturers, construction firms and suppliers hard. Legal experts say employees affected by terminations should take steps to understand their rights under Ontario law before signing any agreements or accepting severance offers.
“Many employees mistakenly assume that the first severance offer they receive is non-negotiable,” said a spokesperson for Lecker & Associates, a Toronto employment law firm. “In reality, employers are often trying to minimize payouts, and many workers are entitled to significantly more than they’re initially offered.”
Under Ontario’s Employment Standards Act (ESA), employers can terminate employees without cause, but they must provide either notice or pay in lieu of notice. However, the ESA sets minimum standards, and employees are often entitled to greater compensation under common law, depending on factors such as age, position, length of service and the time it may take to find comparable work.
Temporary layoffs also raise legal questions. If an employment contract does not specifically allow for temporary layoffs, the move may constitute constructive dismissal—a situation in which a significant change to job conditions entitles the employee to full severance.
Workers currently receiving long-term disability (LTD) benefits face added uncertainty. Some insurance plans terminate benefits upon job loss, while others continue coverage. Lawyers caution that employees should request full documentation of their disability policy and seek legal advice before making decisions.
For those on LTD who are dismissed, legal challenges may be possible, especially if the termination appears to violate human rights protections related to disability.
As layoffs ripple through the province’s industrial economy, legal professionals urge workers to:
- Review employment contracts for severance and layoff provisions;
- Avoid signing severance agreements under pressure or short deadlines;
- Request full details of any group disability policy;
- Document changes to job duties or hours;
- Seek legal counsel to assess entitlements.
“With ongoing economic shifts, it’s important that workers understand how the law applies to their specific situation,” the spokesperson said. “Getting informed early can prevent long-term hardship.”
The layoffs are expected to affect not just direct steel and aluminum producers but also transportation, warehousing and smaller suppliers tied to those industries.
