Executive Summary: Key Legal and Evidentiary Issues

• The plaintiff claimed she was constructively dismissed following an indefinite lay-off from her marketing position.

• The employer relied on a temporary lay-off clause in the employment contract to justify the action.

• The court examined whether the lay-off clause was a form of termination provision under the Employment Standards Act, 2000 (ESA).

• Case law, including Waksdale, was central to determining whether ESA violations voided the clause.

• The court found the clause to be unenforceable due to non-compliance with ESA protections.

• Summary judgment was granted in favour of the plaintiff, confirming constructive dismissal at common law.

Background and facts

In Taylor v. Salytics Inc., 2025 ONSC 3461, the plaintiff, Amy Taylor, brought a claim for constructive dismissal after being laid off indefinitely by her employer, Salytics Inc., a marketing automation company. Ms. Taylor had worked at Salytics for more than four years, most recently as Director of Marketing. In June 2023, she was placed on a temporary lay-off due to business restructuring, with no confirmed return-to-work date.

Salytics relied on a temporary lay-off clause in Ms. Taylor’s employment contract, which it claimed allowed it to lawfully impose the lay-off in accordance with the ESA. Ms. Taylor argued that this clause was invalid, as it contravened the ESA, and that the lay-off constituted a constructive dismissal under common law principles.

Legal issues and arguments

The central legal issue was whether the temporary lay-off clause was enforceable. Ms. Taylor argued that it was effectively a termination clause because a lay-off is treated as termination at common law. She relied on the Ontario Court of Appeal’s ruling in Waksdale v. Swegon North America Inc., which held that termination-related provisions must comply with the ESA and be interpreted as a whole. Ms. Taylor submitted that because the clause did not meet the ESA's minimum standards or permit her to be laid off without breaching those standards, it was void and unenforceable.

Salytics contended that the lay-off clause stood on its own and should be upheld, asserting that Ms. Taylor’s agreement to the clause negated any claim of dismissal.

Court’s analysis and ruling

Justice Myers agreed with the plaintiff, finding that the temporary lay-off clause was, in effect, a form of termination provision. He applied the reasoning in Waksdale, noting that contractual provisions allowing for lay-off must comply with the ESA to be valid. In this case, the clause did not meet that threshold. Notably, it allowed the employer to impose a lay-off unilaterally and indefinitely without providing any statutory termination or severance pay, as required under the ESA.

The court rejected the employer’s argument that Ms. Taylor had accepted the contractual terms by continuing to work under them. It held that an invalid termination clause could not be enforced even with employee acquiescence. Since there was no valid contractual authority to lay off Ms. Taylor, the court found that her indefinite lay-off amounted to a constructive dismissal at common law.

Outcome and implications

The court granted summary judgment in favour of Ms. Taylor, declaring that she had been constructively dismissed. Damages were to be assessed in a separate proceeding if the parties could not agree on the quantum.

This decision reaffirms the principle that employers cannot rely on contractual lay-off clauses unless those clauses strictly comply with ESA minimum standards. It also illustrates the continuing impact of Waksdale on employment litigation, especially where employees face indefinite layoffs with no statutory entitlements.