The company called the collapse beyond its control. The board saw a warning it ignored
A company that built its entire workforce around a single client thought the sudden loss of that client freed it from paying for the layoffs that followed. A labour tribunal disagreed, pointing to warning signs the company had left unaddressed for months.
The Nova Scotia Labour Board dismissed the employer's appeal in a decision dated June 25, 2026, written by Vice-Chair Julien S. Matte. At issue was roughly $200,000 in pay in lieu of notice owed to 69 workers laid off after a call centre operator lost the contract that accounted for nearly all its business.
One contract, and nothing behind it
The employer, a call centre operator, had set up its Nova Scotia site in 2021 for a single purpose: to service one client's contract, an agreement that was to run until 2028. During the life of that agreement, the centre employed between 74 and 110 people. Its Nova Scotia operation was, in the Board's words, largely a single client company.
When the client walked away and prematurely ended the agreement, there was no other work to keep the site running, and the workforce was laid off without cause. The employer did not dispute that the layoffs happened. What it disputed was whether it had to pay for them.
The operator declined to pay statutory notice, relying on an exception in the Labour Standards Code for layoffs caused by reasons beyond the control of the employer, including the cancellation of orders. The Director of Labour Standards disagreed, finding the company owed its affected former employees nearly $200,000 in pay in lieu of notice.
A safety valve, not a loophole
The Board accepted that losing the client fell within the cancellation of orders described in the exception. But it held that this alone was not enough. Drawing on the Court of Appeal's decision in Decker v. Ben's Ltd., the Board said the exception applies only where the cause was beyond the employer's control and where the employer had exercised due diligence to foresee and avoid it.
To illustrate, the Board contrasted a factory destroyed by a lightning strike with one that burns down after repeated fire code violations: only the first is truly beyond the owner's control. Here, it found ample warning. Within six months of signing, the client had fallen into arrears that reached $2.5 million, yet the operator never enforced the contract clause that let it demand payment.
That failure, the Board said, was the operator's own. In the Board's view, a sudden loss of business, on its own, does not open the door to the exception. "Section 72(3)(d) is not a statutory loophole to avoid financial obligations, it is a safety valve to shield employers from the full effect of the unforeseeable."
The author of its own misfortune
The company never argued it could not afford the payments. Some evidence suggested it kept offering call centre services with a smaller workforce, and it had sued the client for the breach, with a claim that could reach through the end of the contract in 2028. The disputed award, the Board noted, came to less than eight per cent of the arrears the client had run up.
The employer had time to act and did not, the Board found. The client had signalled its intention to end the agreement, but months passed before the operator's lawyer sent even a single letter about the mounting unpaid invoices. The exception must be strictly applied, the Board said, and the evidence did not show the company had done anything to avoid the cause of the layoffs.
The appeal was dismissed. The just over five weeks of notice calculated for each of the 69 affected employees stands, as does the individual award to the named respondent of $2,882.25 in pay in lieu of notice, plus a $208 amount that was never appealed. The company, the Board concluded, was "the author of its own misfortune rather than a victim of an event beyond its control."
