Many agreements allow for suspension of employees for misconduct, but it's different in non-unionized workplaces.
Q: Can a non-unionized employer issue disciplinary suspensions?
A: In all common law provinces except Nova Scotia, there is no statutory rule or standard contractual term regarding the right of a non-unionized employer to unilaterally impose a disciplinary suspension. The general principles of contract law apply with the issue depending on just cause and whether the suspension is paid or unpaid.
Employers should ensure that employment contracts include a provision allowing suspensions for the purpose of discipline, short of termination. Absent such language, even a paid suspension can be a constructive dismissal.
The B.C. Supreme Court in Kellas v. CIP Inc., 1990 CanLII 412, held that if just cause for termination exists, an employer may impose a lesser sanction such as a suspension. Absent just cause, an employer cannot impose an unpaid suspension unless permitted by an express or implied term of the employment contract (see Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10).
For an employer to justify a disciplinary suspension based on an implied term, it must establish that it can be implied from intention, law or custom. For example, in Reininger v. Unique Personnel Canada, [2002] O.J. No. 2826, an Ontario court upheld a 90-day unpaid suspension against an employee who was subject to criminal charges, based on the company’s policies and the parties’ intentions.
Similarly, in Hussey v. Canadian Specific Hotels Corp., 2004 NLSCTD 77, an implied term permitting suspension was upheld because the employer commonly used disciplinary suspensions and had previously suspended the employee.
In the absence of a contractual agreement, an unpaid suspension would be considered a repudiatory breach of contract that could amount to constructive dismissal (see Carscallen v. FRI Corp., 2005 CanLII 20815). A paid disciplinary suspension is less likely to amount to constructive dismissal, except where it indicates an intention by the employer to repudiate the contract (see Devlin v. NEMI Northern Energy & Mining Inc., 2010 BCSC 1822).
For example, in MacKay v. Avco financial services Canada Ltd., 1996 CanLII 3752, the Supreme Court of Prince Edward Island approved of a paid suspension of a branch manager pending investigation of complaints about his management style — in part because it was in good faith. Conversely, if the court saw the suspension as a step to a pre-meditated termination without proper investigation, it would likely amount to constructive dismissal. The decision illustrates that an employer is obligated to pursue all other available options before termination.
However, the law may be moving towards implying a standard term in all employment contracts permitting disciplinary suspension. The Supreme Court of Canada stated in McKinley v. BC Tel, 2001 SCC 38 that disciplinary measures short of termination may be imposed where proportionate to the misconduct. Similarly, the Ontario Court of Appeal in Haldane v. Shelbar Enterprises Limited, 1999 CanLII 9248, stated that a right to impose disciplinary suspension should be implied into all contracts as a necessary component of progressive discipline.
As the law stands today, however, there is no standard implied term permitting disciplinary suspensions.
The best practice is to include a provision in the employment contract reserving the right to impose a disciplinary suspension. For additional protection, an employer should suspend an employee with pay unless it is part of a good-faith effort to preserve the employment relationship.
At a minimum, employers should include in the contract reference to an existing progressive discipline policy. In the absence of a written contract, documentary evidence of disciplinary practices would support the existence of an implied term. To avoid the issue altogether, employers could simply limit discipline to a series of warnings. Ultimately, it is the contract language that will govern the day.
This article was co-authored by Glen Stratton, an associate in the Workplace Law and Commercial Litigation Groups at Singleton Reynolds in Vancouver, and Emma Chapman, a litigation fellowship student at Singleton Reynolds in Vancouver.
Melanie Samuels
partner and co-chair of the Employment and Labour Group, Singleton Reynolds in Vancouver
