In our post, Can You Get Fired for No Reason in Ontario, we state that an employer can fire you without cause, even if you haven’t done anything wrong. Though layoffs are not due to anything an employee has done and are instead due to operational needs, an employer can lay off an employee at any time, including when an employee is on short term disability.
Though you can be laid off while on short term disability, it is important to note that an employer cannot lay you off because you are on leave. Your employer must also give you adequate notice or severance pay when you are laid off. Being on short term disability leave may complicate how a layoff is handled. You should be aware that a layoff is possible even when on leave.