The problem with paid suspensions

Be careful with paid suspensions, warns labour lawyer – it may amount to constructive dismissal.

The problem with paid suspensions
One labour lawyer has issued a warning to employers across Canada – suspend your non-unionized employees and, in certain circumstances, they’ll be able to claim for constructive dismissal.

Andrew Pozzobon’s caution comes in the wake of a recent Supreme Court of Canada ruling which cleared up much of the uncertainty surrounding constructive dismissal. 

“Case law had differed between courts and provinces on the issue,” said the Borden Ladner Gervais lawyer, “but the matter has finally been settled by the Supreme Court of Canada.”

The clarification came as the SCC confirmed a two-step system by which courts can test for constructive dismissal:

Step 1 – Identify breach of contract

According to SCC guidelines, “The court must first identify an express or implied contract term that has been breached.”

Pozzobon says that if an employer changes the conditions of a contract, without consent from the employee, then a breach will be identified.

Step 2 – Determine the gravity of the breach

“The court must determine whether that breach was sufficiently serious to constitute constructive dismissal,” advises the SCC – this usually involved substantial changes to compensation or duties.

“The court must determine whether the changes are reasonable and whether they are within the scope of the employee's job description or employment contract,” elaborated Pozzobon.


“Employers considering administrative suspensions should implement them carefully,” warned Pozzobo, especially if administrative suspensions are not explicitly authorized under the contract – something he advised HR managers include.

“Employers should consider whether they need to amend their employment contracts to include an express right to suspend employees,” he advised.

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