Suspension with pay during investigation

Can a suspension during investigation be considered disciplinary if the investigation finds the employee guilty?

Colin Gibson

Question: We recently suspended one of our unionized employees with pay, pending investigation of suspected misconduct. We have determined our suspicions were accurate, so we are about to fire the employee for just cause. Can we deem the employee’s suspension to be disciplinary without pay, and seek to recover the wages we paid to him during the suspension?

Answer: It is well established that, subject to the provisions of the applicable collective agreement, an employer has the right to place an employee on administrative suspension pending investigation of suspected misconduct, provided the employer has reasonable grounds to do so. The employer must have a reasonable basis for suspecting the employee of misconduct and for determining that given the nature of the allegations, her continued presence in the workplace presents a serious potential risk to the legitimate business interests of the employer, or the safety of persons or property.

A suspension pending investigation will not be considered disciplinary in nature, unless it includes an express or implied finding or suggestion the employee has engaged in misconduct or other behaviour that requires correction. As a result, administrative suspensions are usually with pay, in order to avoid an argument it was disciplinary.

In some cases, an employer will be justified in suspending an employee without pay pending investigation — where an unpaid suspension is authorized by statute or by the collective agreement. In such circumstances, the employer will be required to compensate the employee for lost wages and benefits if its investigation does not reveal any basis for disciplinary action.

Recovery of wage overpayments

Where an employer overpays an employee’s wages due to a clerical or other error, the employer will usually be able to recover the overpayment from the employee. In some jurisdictions, however, employment standards legislation will prevent the employer from unilaterally deducting the overpayment from the employee’s wages. In such jurisdictions, unless the employer is expressly authorized to deduct the overpayment under a statute, collective agreement or with the consent of the employee, the only recourse for recovery is through the grievance procedure or a court action.

In British Columbia, for example, the Employment Standards Act provides that an employer must not, directly or indirectly, withhold, deduct or require payment of all or part of an employee's wages for any purpose. In Health Employers Association of B.C. v. B.C.N.U., the B.C. Court of Appeal held that employers cannot deduct overpayments from employees’ paycheques unless authorized by law or with the employee’s consent.

In this particular situation, it is unlikely an arbitrator would allow the employer to recover the wages paid to the employee during the paid suspension. Deducting such payments from the employee’s final cheque would likely be unlawful, in which case the employer would have to seek recovery from the employee by filing a grievance under the collective agreement. It is unlikely an arbitrator would order repayment under these circumstances.

The employer presumably chose to suspend the employee pending investigation because at the time of suspension, it did not feel it had enough evidence to support discharge for cause. Had the employee not been suspended, he would have continued working and receiving pay pending the completion of the investigation. The employer reasonably chose to protect its interests by placing the employee on administrative suspension with pay. Having made that decision, however, it is unlikely an arbitrator would allow the employer to change its mind and, in effect, dismiss the employee retroactively.

For more information see:

Health Employers Association of B.C. v. B.C.N.U., 2005 CarswellBC 1504 (B.C. C.A.).

Colin G.M. Gibson is a partner with Harris & Company in Vancouver. He can be reached at (604) 891-2212 or cgibson@harrisco.com.

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