Board bypassed own policies when suspending long-serving president, sparking legal battle
The Supreme Court of British Columbia recently dealt with an employment law case involving an elected president who also held an employment contract with his organisation.
The worker had served in his leadership role for nearly a decade before being placed on administrative suspension pending investigations into various complaints about his conduct.
The worker argued that his suspension was unlawful and unjustified, amounting to wrongful constructive dismissal.
He claimed the employer created a hostile work environment and made unilateral changes to his employment contract by limiting his duties as the senior officer responsible for general operation and administration.
The employer maintained the suspension was lawful and reasonable, arguing there were good reasons to investigate the worker for alleged conflicts of interest supported by a legal opinion from a law firm.
When suspension authority meets governance procedures
The employer is a governing body for approximately 4,000 Indigenous people operating under the Societies Act, with a governance policy manual setting out duties and oversight mechanisms for board members.
The worker was first elected president in July 2014 and re-elected three times, with the organisation growing from five employees to 55 employees across six departments by his fourth term in 2022.
During his final term, significant personality conflicts emerged between the worker and other directors.
A group of five board members became hostile and "acted in a co-ordinated and collective manner to undermine" him, creating what an independent investigation described as "animosity among certain members" that contributed to "overall lack of trust and dysfunction within this board."
The governance policy established strict requirements for complaints, including a six-month time limit and detailed procedural steps before any administrative suspension.
Procedural requirements overlooked during suspension process
In November 2023, the board received four complaints against the worker, including one based on a legal opinion suggesting a conflict of interest due to his father's business activities with mining companies.
However, this complaint concerned matters from December 2020 and March 2022, well outside the six-month limitation period.
The secretary-treasurer filing the complaint acknowledged this, stating: "being that the 6-month time limit has been exhausted, the board will need to fall back on the society's act [sic] conflict of interest clause."
The governance policy required preliminary assessment by the chief administrative officer and complaints committee review before suspension could be considered.
However, the court found "no evidence that the preliminary vetting by the Complaints Committee occurred here, either before the Board suspended [the worker] or at all."
The board bypassed these steps and voted 8-3 to place the worker on administrative leave with pay, stating they were exercising contractual authority under the employment agreement rather than following the director accountability process.
Employee rights during workplace suspension implementation
The vice-president gave the worker written notice on November 23, 2023, referring to formal complaints and additional allegations that he was "using your position and influence to spread misinformation among staff," causing "resignations, threats of resignation, and numerous complaints."
The worker immediately sought clarifications through multiple emails but received no response until December 22, 2023, describing feeling "left … hanging in a state of confusion and uncertainty."
The court applied the Potter test, which requires employers to prove that administrative suspensions are justified.
The court found the worker had accepted the director's accountability process as part of his employment terms by signing the governance policy manual declaration.
Since the suspension power "is only exercisable within the framework of the Directors Accountability Process" and the employer failed to follow prescribed procedures, the court ruled this was a material breach of the employment contract.
Constructive dismissal damages and workplace resolution
After four months of suspension, the worker resigned on March 28, 2024, maintaining that the suspension was unlawful.
The court awarded him $320,725 in compensatory damages based on his remaining contract term to June 2025, including salary, allowances, and benefits, minus $34,000 earned during the dismissal period.
The worker sought aggravated and punitive damages for bad faith conduct, but the court rejected these claims, noting the board "cannot be faulted for accepting … expert advice" from the law firm.
The court concluded: "I find [the worker] was constructively dismissed from his employment as President through an unjustified administrative suspension.
The suspension was not justified because the Board failed to adhere to the procedural requirements that give it authority to place a director on administrative suspension."
This decision demonstrates that employers must strictly follow their own policies when implementing suspensions, particularly involving elected officials who also function as employees.
