When Being Suspended Without Pay is Constructive Dismissal

Jul 25, 2018

Sometimes your employer is allowed to suspend you without pay. Other times, this is a breach of your employment contract and can amount to a constructive dismissal. How can an employee know when a suspension without pay is justified?

The Ontario Court of Appeal looked at the appropriateness of an employer suspending an employee without pay in Filic v Complex Services Inc., 2018 ONCA 625

Facts

Mr. Filic worked as a Security Shift Supervisor for the appellant employer, who operated two Casinos (“the Casino”). All employees working in the Casino’s Security Department have to maintain a valid gaming registration issued by The Alcohol and Gaming Commission of Ontario (“AGCO”).

In December 2017, the AGCO informed the Casino’s Director of Security, Mr. Paris, that an audit of the Casino’s lost and found records raised some red flags. Police officers told Mr. Paris that Mr. Filic was under an ongoing investigation for theft in the workplace. In response, Mr. Paris immediately placed Mr. Filic on an investigative suspension without pay, citing Casino policies.

In January 2008, five charges were laid against Mr. Filic and the AGCO suspended his gaming registration. Accordingly, Mr. Filic could not perform his duties as a Security Shift Supervisor at the Casino. Unpredictably, all five of Mr. Filic’s charges were either withdrawn or dismissed and his criminal matter ended. His gaming registration remained suspended and Mr. Filic voluntarily surrendered this licence to the AGCO. Weeks later, Mr. Paris terminated Mr. Filic from his job because he lacked a valid gaming registration.

Mr. Filic launched an action against the appellant claiming constructive dismissal (among other things). The trial judge ruled in favour of Mr. Filic and the Court of Appeal upheld the trial judge’s conclusion that Mr. Filic was constructively dismissed.

The Test for Constructive Dismissal

The Supreme Court of Canada has outlined a test for constructive dismissal. Where there is a single act by the employer that could constitute a breach of the employment contract, the test requires a review of the specific terms of the contract of employment. This involves two steps:

  1. identify an express or implied contractual term that was breached;
  2. determine if the breach is sufficiently serious to constitute constructive dismissal.

Generally, the employee is responsible for establishing a constructive dismissal. However, the burden shifts to the employer when there is an administrative suspension. There are a lot of different factors courts consider to determine if a suspension is justified.

Mr. Filic’s Employment Contract

Mr. Filic’s employment contract (viewed as including the Casino’s policies and handbook) allowed the employer to suspend Mr. Filic as long as it continued to act reasonably. However, the contract did not have express language that stated suspension would be without pay. Although Mr. Filic’s suspension was justified, the appellant could not prove that suspension without pay was reasonable, especially at the early stages of the AGCO investigation. The court found that suspending Mr. Filic without pay in December of 2007 amounted to a constructive dismissal.

The Filic case outlines what courts will consider in deciding whether an unpaid suspension is justified. It also shows the importance of understanding your employment contract and workplace policies that affect you.

If you have been suspended without pay and would like more information on your rights, contact an employment lawyer at MacLeod Law Firm. You can reach us at [email protected] or 647-204-8107.

The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.

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