Summary: Is a “Medical Layoff” Legal?
Technically, there is no such thing as a “medical layoff” in the Alberta Employment Standards Code. If your employer tells you that you are being laid off because you are sick, injured, or on leave, it is usually a termination of employment in disguise.
2026 Update: Alberta law now provides 27 weeks of job-protected leave for long-term illness or injury. Terminating or laying off an employee while they are using this protected leave is a statutory reprisal and often a violation of the Alberta Human Rights Act.
The Burden of Proof
If an employer lays off an employee who is on medical leave, they must prove the layoff was 100% unrelated to the employee’s health. If the illness played even a 1% role in the decision, the employer may be liable for human rights damages in addition to severance pay.
Medical Leave vs. Layoff: The Key Difference
It is important to distinguish between being on a medical leave and being laid off. While both involve not working, the legal protections are very different:
- Long-Term Illness & Injury Leave: A 27-week statutory right where your job is protected. You are still an employee, and your employer is waiting for your return.
- Temporary Layoff: A period where work is unavailable for economic reasons. This can only happen if your contract allows it or if you agree to it.
Human Rights and Disability Discrimination
In Alberta, “physical disability” and “mental disability” are protected grounds. This means an employer can’t take negative action — like a layoff — against you because of an illness or injury.
A “medical layoff” often occurs when an employer doesn’t want to engage in the duty to accommodate. Instead of finding ways to help you return to work with modifications, they simply let you go. This is a direct violation of the Alberta Human Rights Act.
Severance Entitlements in a Medical Layoff
If you are “permanently laid off” while sick, or if your temporary layoff exceeds the 60-day limit (or is initially treated as a constructive dismissal), you are entitled to full severance pay in Alberta. Because you are suffering from an illness or injury, your “difficulty of re-employment” is higher, which often increases the amount of severance a court will award.
Common payouts for a medical layoff Alberta include:
- Common Law Severance: Up to 24 months of pay.
- General Damages: For injury to dignity and feelings (Human Rights damages).
- Special Damages: Coverage for lost long-term disability benefits if you were terminated while eligible.
Get Legal Help Today
If you have been told you are on a “medical layoff” or have been fired while on sick leave, our Alberta team is ready to protect your rights and your future. We help employees in: