Suspensions from the Workplace – Paid or Unpaid?

Employees are sometimes placed on suspension from their workplace, whether paid or unpaid and are unaware of their rights during this time frame.  Is the employer allowed to do this?  Should I be getting paid?  Is this even a good reason to be suspended?  During this confusing time, it is best to consult with an employment lawyer to learn your rights.  This blog post will cover some of the common principles of suspensions from the workplace.

There are primarily two reasons for which an employer may want to suspend an employee, 1) for administrative reasons such as investigating a workplace incident, and 2) as a disciplinary measure against the employee.

Administrative Suspensions

Administrative suspensions are when an employer decides to suspend an employee while investigating a workplace incident — for example, when allegations of misconduct are brought forth against the employee, or when a criminal proceeding is ongoing against an employee.

During an administrative suspension, the employer must follow the law with respect to how the suspension is executed.  The employer cannot place an employee on administrative suspension without pay if the employee is available and willing to work. This means that so long as the employee is at home, awaiting the results of any potential investigation or proceeding, the employer must continue to pay them during this time. The employee can waive their right to be paid on an administrative suspension if they have contractually agreed to this term upon their hire pursuant to an employment contract indicating as such.

The Supreme Court of Canada in the case of Cabiakman v. Industrial Alliance Life Insurance Co., stated that the following are required when placing an employee on administrative suspension:

  1. The suspension must be necessary to protect the legitimate business interest;
  2. The employer must be acting in good faith;
  3. The suspension must be for a relatively short time period for a fixed term; and
  4. Other than in exceptional circumstances, the suspension must be paid.

If you are placed on an unpaid suspension for administrative reasons where your employer is refusing to pay you, you are able to refuse the suspension and this would not be construed as a resignation but rather a constructive dismissal.

In 2018, Ontario’s Court of Appeal considered the issue of suspensions, in the case of Filice v. Complex Services Inc..   That case involved a casino employee who was suspected of theft.  He was placed on a lengthy suspension without pay while under investigation.  The employer did have a formal policy that permitted suspensions during an investigation, so that was part of the employee’s contract.  Nevertheless, the court found that the employer should have had stronger grounds before putting the employee on a suspension without pay.

The Court acknowledged that there “may be situations where an employer would be fully entitled to suspend an employee without pay given the nature of the allegations made.  However, those situations must be viewed as exceptional, and in any case, it still falls to the employer to justify that decision as a reasonable one.”

Here, the employer made the mistake of believing that a suspension without pay would be automatic without taking the steps to justify it.   Therefore, it was considered a constructive dismissal, and the employee was awarded damages.   Employers should seek expert legal advice prior to instituting a suspension without pay.

Disciplinary Suspensions

Disciplinary suspensions can occur when an employee has committed misconduct, as a form of punishment if there is just cause to do so.  Again, this form of suspension can only be unpaid if there is an express term in the employment agreement that the employee signed allowing for the measure to be taken unpaid.

The disciplinary suspension cannot go so far as to sever the employment relationship, otherwise the employee may have a claim for constructive dismissal.

On the other hand, if the misconduct is serious enough, the employer may have just cause to permanently dismiss the employee without compensation.  The employer who chooses to only suspend such an employee without pay may in fact be acting leniently.  You should consult an employment lawyer if you are in such a situation, to help evaluate your options.

Suspensions General Assessment

In general, suspending an employee is permissible if all express and implied terms in the employment relationship are followed satisfactorily.  It is important to expressly allow for an unpaid suspension in an employment contract or policy should an employer wish to exercise this tool instead of terminating the employee and the suspension must be in the interest of the business.

Additionally, Courts often look at whether the employee had the opportunity to appeal the suspension to someone who is not the manager or supervisor who imposed the suspension in the first place, such as a senior manager or executive.  Failing to allow for this may render the suspension a constructive dismissal, wherein the employee may claim notice for the termination of their employment and the potential for any unpaid wages during the suspension period.

A clear and well-drafted employment agreement or workplace policies and handbooks regarding suspensions will provide both the employer and employee with information on their rights should the issue ever arise.

If you are unsure of your rights regarding a suspension from the workplace, contact Monkhouse Law today for a free 30 minute phone consultation.

Call us for a FREE 30 minute phone consultation at 416-907-9249 or submit a callback request

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