Suspension of non-union employees

Question: Can a non-union employee be suspended without pay, as discipline for serious misconduct such as harassment?

Answer: In unionized workplaces, many employers use a system of progressive discipline including reprimands, unpaid suspensions, and ultimately discharge. In the non-union environment, however, an employer may not have the implied right to suspend an employee without pay. An unpaid suspension may give rise to a constructive dismissal.

Whether an unpaid suspension will amount to constructive dismissal depends on the particular circumstances. A constructive dismissal claim arising from an unpaid suspension will fail if the employer can demonstrate either that the suspension was expressly or implicitly consistent with the terms and conditions of the employment relationship, or that the employee’s misconduct was severe enough to provide just cause for dismissal.

Factors a court may consider when determining whether a suspension amounts to a constructive dismissal or a repudiation of the employment contract include: the duration of the suspension; whether another person replaced the suspended employee; whether the employee was asked for her keys; whether the employee continued to receive pay and benefits; whether there is evidence the employer intended to terminate the employment relationship; and whether the employer suspended the employee in good faith: Devlin v. NEMI Northern Energy & Mining Inc.

To reduce the risk of an unpaid disciplinary suspension being a constructive dismissal, the right to implement it should be included in the employment contract, employee handbook, or policies. Also, the right to suspend is more likely to be upheld if there is a mechanism for an employee to appeal.

Employers must be careful to differentiate between a disciplinary suspension for misconduct and an administrative suspension implemented pending investigation into suspected misconduct. Generally, an administrative suspension should be with pay, unless there is a specific reason to withhold it.

Also, an administrative suspension should be imposed in good faith, and for proper reasons. In Potter v. New Brunswick Legal Aid Services Commission, the Supreme Court of Canada ruled that an employer had constructively dismissed an employee when it placed him on an indefinite paid administrative suspension. The employee had seven years of service and the parties were engaged in discussions on a potential buyout and early departure. In the meantime, unbeknownst to the employee, the chairperson of the employer’s board sent a letter to the Minister of Justice recommending that the employee be dismissed for cause and the employer notified the employee’s counsel that he was not to return to work until further notice. The court ruled that the employer lacked the express or implied authority to suspend the employee indefinitely. Given the indefinite duration of the suspension, the fact that the employer had failed to act in good faith by providing valid business reasons for the suspension, and the employer’s concealed intention to have the employee terminated, the concluded that the employee had been constructively dismissed.

For more information see:

• Devlin v. NEMI Northern Energy & Mining Inc., 2010 CarswellBC 3474 (B.C. S.C.).

• Potter v. New Brunswick (Legal Aid Services Commission), 2015 CarswellNB 87 (S.C.C.).