July 29, 2004

Does suspension equal constructive dismissal

Question: Is the act of suspending an employee for punitive reasons enough to constitute constructive dismissal, for either a paid or unpaid suspension?

Answer: According to traditional common-law contract principles, the employer has no right to impose unpaid suspensions unless the employment contract explicitly includes provisions allowing the employer to do so or it had been implied into the employment contract through the past practices of the employer.

Unfortunately, though, this contractual model stands in stark contrast to recent trends in employment law towards “corrective discipline” in which employers are expected to impose less serious sanctions against employees for lesser forms of misconduct. According to the Supreme Court of Canada employers are expected to impose lesser forms of discipline, and not immediately dismiss employees, when employees act in ways that do not cause the employer serious harm.

With this in mind some Canadian courts have expressed opinions that perhaps reasonable suspension clauses should be seen as an implied standard term in all employment contracts. Therefore it appears there may be a move in Canadian law towards finding that a disciplinary suspension, if reasonable in the circumstances, is not a constructive dismissal.

However this is not yet the law and a prudent employer should take a number of steps to protect itself from claims of constructive dismissal from suspended employees.

Employers should include provisions in all employment contracts which specifically allow the employer to impose disciplinary suspensions in reasonable circumstances.

Employers should also make their employees aware of the practice of disciplinary suspensions, through orientation and training manuals and other publications dealing with workplace standards and expectations.

Peter Israel is the senior partner in the Toronto law firm of Israel Foulon LLP – Employment and Labour Lawyers. He can be reached at 416-640-1550 or pi@israelfoulon.com. A version of this article originally appeared in the Carswell publication, Canadian Employment Law Today

LEGAL DISCLAIMER: This article is for informational purposes only and is not intended to provide legal advice, which in all circumstances must be tailored to the specific facts of any problem. You should obtain a proper legal consultation in order to determine how this article applies to your specific situation.
Please feel free to contact Israel Foulon LLP to learn more at 416-640-1550.

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