Is Work Suspension Paid in Ontario?

Employees who have been suspended from their jobs may wonder whether they are entitled to financial compensation. The short answer is – it depends.

Administrative Suspension & Constructive Dismissal

There are two primary reasons for placing an employee on suspension. The first is an administrative suspension, which is often for investigative reasons and the second is a suspension for disciplinary reasons. While investigating a workplace incident, an employer can place an employee on an administrative suspension. The employee must be paid for the administrative suspension if he or she is available and willing to work. If the employee agrees in the employment contract that he or she will not be paid for the suspension, then the employer is not obligated to pay. When there has been an administrative suspension of an employee and the employer is refusing to pay, the employee has the right to refuse the suspension. In this situation, the employee will be deemed to have been constructively dismissed. Constructive dismissal is when an employer makes a substantial change to the terms of an employee’s contract without the employee’s consent. Minor changes to a contract do not trigger constructive dismissal, as the employer has the right to make reasonable adjustments to an employer’s duties to adapt to changes in the market. If it is concluded that the employee was constructively dismissed, then the employee will be entitled to receive a severance package.

The Case Law

The Supreme Court of Canada (SCC) outlined four criteria in Cabiakman v. Industrial Alliance Life Insurance Co. that are required for an administrative suspension. First, the suspension must be necessary to protect legitimate business interests, the employer must be acting in good faith, the suspension must be a fixed term and relatively short and other than in exceptional circumstances, the suspension must be paid.

In a case from the Ontario Court of Appeal, Filice v. Complex Services Inc., a casino worker was placed on suspension without pay while the company investigated him for theft. The employee’s contract permitted suspensions during investigations, but the court held that for a suspension to be given without pay, the circumstances would have to be exceptional. The burden falls upon the employer to justify the suspension without pay. In this case, the employer assumed that the process would be automatic and did not take steps to justify the suspension. It was therefore considered a constructive dismissal.

In Potter v. New Brunswick (Legal Aid Services Commission), the SCC looked at whether an employer can place an employee on an administrative suspension without providing a reason. Mr. Potter was placed on an administrative suspension, and after eight weeks of silence from his employer, he commenced an action for constructive dismissal. The employer argued that by commencing this action, Mr. Potter was resigning. The court stated that suspending Mr. Potter without providing him with any rationale was so unreasonable that Mr. Potter was correct in assuming he was constructively dismissed. The court stated that employers must provide reasoning for suspension, regardless of what the employment contract states.

Disciplinary Suspension

An employee will be placed on disciplinary suspension when they have committed a form of misconduct. This form of suspension must also be paid unless the employment contract states otherwise. If the misconduct is severe, the employer may have just cause to terminate the employee without providing compensation. It may be considered reasonable conduct for an employer to suspend an employee without pay if the misconduct was so severe. This is because the employer was acting leniently by choosing to suspend the employee instead of firing them.

Suspension and the Employment Contract

The courts will generally look to the employment contract to determine the validity of the suspension and whether a suspension without pay is justifiable under the circumstances. Courts are generally sensitive to the power imbalance between employers and employees, are therefore lenient in interpreting these contractual provisions. Courts will only allow suspension without pay in exceptional circumstances. Further, suspension must be in the nature of the business, and courts will generally consider whether the employee had an opportunity to appeal the suspension to another individual. If employers do not conform to these standards, the suspension could be rendered a constructive dismissal, upon which the employee would be paid severance.

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