The right to suspend is not the norm, employers should be cautious in imposing such sanctions
Recently Canadian Employment Law Today explored the difficulties that arise in terminating an employment relationship on a for-cause basis (see “Dismissing staff in ‘employee-friendly’ legal environment,” Issue #406, Feb. 4, 2004). The point, essentially, was that while the doctrine of just cause is a part of the legal system, it is often difficult to satisfy a judge that it exists in a particular case.
In many cases a single incident will not constitute just cause. Instead the courts will require the employee in question to be warned of the employer’s concern and given an opportunity to improve. Progressive discipline is often necessary along the road to dismissal and second and third chances are frequently required before an employee can be dismissed. The issue that has arisen is whether, in the course of disciplining an employee, an employer can suspend them.
In a unionized environment, systems of progressive discipline that include suspensions are the norm. Arbitrators will often hold that the actions of a dismissed employee were not sufficiently egregious to warrant dismissal and the employer should have suspended the employee instead. But in a non-unionized context that option may not exist. The question of whether employers have the right to suspend non-unionized employees is, at this point, somewhat unsettled. What is clear is the right to suspend is not the norm. As such, employers should be cautious in imposing such sanctions.
The Ontario Court of Appeal considered this issue a few years ago in Haldane v. Shelbar Enterprises Ltd. Dawn Haldane behaved inappropriately and in an insubordinate manner. As a result, the employer chose to discipline her by requiring that she provide written apologies and by suspending her without pay for three days. When she refused the suspension, her employment was terminated. She sued for wrongful dismissal and the trial judge found in her favour. The employer appealed to the Divisional Court and, although there were some procedural quirks, the end result was a decision that “in the absence of an express or implied term in the contract of employment permitting such method of discipline (suspension without pay), such method of discipline is not open to an employer.”
The matter was appealed to the Court of Appeal which agreed the “exercise of reasonable discipline may flow from an implied term of the employment contract,” and that “terms may be implied into a contract based on custom and usage or based upon the presumed intention of the parties.” But the court was concerned the employer’s right to discipline Haldane had not been pleaded or argued at trial and it was therefore inappropriate to decide the case on that basis. As a result the appeal was dismissed, although the court added a further comment that:
“Having regard to the inclusion of progressive discipline powers in virtually all collective agreements, the flexibility which such an implied term would add to the employer-employee relationship and the incorporation into employment contracts as a matter of law of a provision requiring reasonable notice absent just cause for termination, a case could be made for implying a term providing for reasonable discipline into employment contracts.”
More recently this issue arose in Reininger v. Unique Personnel Canada Inc., a decision of the Ontario Superior Court of Justice. But according to the judge’s reasons, Reininger’s counsel did not strenuously dispute the argument that the employment contract included a right to suspend without pay. The judge therefore found that “the parties intended inclusion of a term in the employment contract that the employer possessed a progressive disciplinary power including the right to suspend with or without pay.” But Justice Howden went on to consider the reasonableness of the suspension and found the length of the imposed suspension was unreasonable.
Reininger arouse out of a driver’s licence suspension and the resulting inability of the employee to perform his duties. Somewhat similar facts were considered quite recently by the Saskatchewan Court of Queen’s Bench in Dreger v. Federated Co-Operatives Ltd. The court in Dreger confirmed there is no common law right to suspend an employee without pay. But it found Leslie Dreger accepted the initial discipline that was imposed, including a suspension. Subsequent disciplinary actions of the employer, however, were found to be unreasonable and her claim for wrongful dismissal succeeded.
Some employers believe they are entitled to suspend employees as a form of discipline. Some employers have reviewed the law regarding just cause for termination and concluded they may “have to” suspend an employee where the employee has committed an act which is inappropriate but not sufficient cause for immediate termination. They may fear that if they don’t, they will be precluded from dismissing the employee for cause if the employee re-offends.
But employers should not proceed on a misapprehension. The starting point in Canadian employment law does not appear to have changed — employers do not have the right to suspend employees without pay in the absence of either an explicit or implied term to the contrary.
I am not aware of a judicially-considered case where an employer has included language in an employment agreement explicitly providing the right to suspend the employee without pay. But the case law suggests that if such an agreement were otherwise enforceable, it would create a right to suspend the employee in appropriate circumstances.
If there is no explicit agreement that the employer has the right to suspend the employee without pay, such an agreement can be implied based upon the norms and customs of the specific industry or corporation. This would require a fairly detailed analysis of the factual circumstances of any given case.
If the employer cannot satisfy the court that it had the right to suspend, then a suspension without pay will likely be found to be a constructive or wrongful dismissal.
Even if the right to suspend an employee without pay exists, an employer must exercise care and prudence in employing such a tool. An unreasonable suspension can also lead to a finding of wrongful dismissal, as occurred in two of the cases discussed above.
If the employer is concerned about its duty to progressively discipline an employee and “build a record” to support a subsequent termination for cause, then other forms of discipline can and should be used. Primarily these consist of warnings which should be documented. Whether or not a suspension is imposed, the employer should advise the employee of its concerns, tell the employee of the standards which he is expected to adhere to, and make him aware of the fact that failure to do so can lead to further discipline including the termination of employment.
For more information see:
• Haldane v. Shelbar Enterprises Ltd., 1999 CarswellOnt 3305, 46 C.C.E.L. (2d) 267 (Ont. C.A.)
• Reininger v. Unique Personnel Canada Inc., 2002 CarswellOnt 2355, 21 C.C.E.L. (3d) 278 (Ont. S.C.J.)
• Dreger v. Federated Co-Operatives Ltd., 2004 CarswellSask 93 (Sask. Q.B.)
Stuart Rudner practices civil litigation and employment law with Miller Thomson LLP’s Toronto office. He can be reached at (416) 595-8672 or via email at [email protected].
In many cases a single incident will not constitute just cause. Instead the courts will require the employee in question to be warned of the employer’s concern and given an opportunity to improve. Progressive discipline is often necessary along the road to dismissal and second and third chances are frequently required before an employee can be dismissed. The issue that has arisen is whether, in the course of disciplining an employee, an employer can suspend them.
In a unionized environment, systems of progressive discipline that include suspensions are the norm. Arbitrators will often hold that the actions of a dismissed employee were not sufficiently egregious to warrant dismissal and the employer should have suspended the employee instead. But in a non-unionized context that option may not exist. The question of whether employers have the right to suspend non-unionized employees is, at this point, somewhat unsettled. What is clear is the right to suspend is not the norm. As such, employers should be cautious in imposing such sanctions.
The Ontario Court of Appeal considered this issue a few years ago in Haldane v. Shelbar Enterprises Ltd. Dawn Haldane behaved inappropriately and in an insubordinate manner. As a result, the employer chose to discipline her by requiring that she provide written apologies and by suspending her without pay for three days. When she refused the suspension, her employment was terminated. She sued for wrongful dismissal and the trial judge found in her favour. The employer appealed to the Divisional Court and, although there were some procedural quirks, the end result was a decision that “in the absence of an express or implied term in the contract of employment permitting such method of discipline (suspension without pay), such method of discipline is not open to an employer.”
The matter was appealed to the Court of Appeal which agreed the “exercise of reasonable discipline may flow from an implied term of the employment contract,” and that “terms may be implied into a contract based on custom and usage or based upon the presumed intention of the parties.” But the court was concerned the employer’s right to discipline Haldane had not been pleaded or argued at trial and it was therefore inappropriate to decide the case on that basis. As a result the appeal was dismissed, although the court added a further comment that:
“Having regard to the inclusion of progressive discipline powers in virtually all collective agreements, the flexibility which such an implied term would add to the employer-employee relationship and the incorporation into employment contracts as a matter of law of a provision requiring reasonable notice absent just cause for termination, a case could be made for implying a term providing for reasonable discipline into employment contracts.”
More recently this issue arose in Reininger v. Unique Personnel Canada Inc., a decision of the Ontario Superior Court of Justice. But according to the judge’s reasons, Reininger’s counsel did not strenuously dispute the argument that the employment contract included a right to suspend without pay. The judge therefore found that “the parties intended inclusion of a term in the employment contract that the employer possessed a progressive disciplinary power including the right to suspend with or without pay.” But Justice Howden went on to consider the reasonableness of the suspension and found the length of the imposed suspension was unreasonable.
Reininger arouse out of a driver’s licence suspension and the resulting inability of the employee to perform his duties. Somewhat similar facts were considered quite recently by the Saskatchewan Court of Queen’s Bench in Dreger v. Federated Co-Operatives Ltd. The court in Dreger confirmed there is no common law right to suspend an employee without pay. But it found Leslie Dreger accepted the initial discipline that was imposed, including a suspension. Subsequent disciplinary actions of the employer, however, were found to be unreasonable and her claim for wrongful dismissal succeeded.
Some employers believe they are entitled to suspend employees as a form of discipline. Some employers have reviewed the law regarding just cause for termination and concluded they may “have to” suspend an employee where the employee has committed an act which is inappropriate but not sufficient cause for immediate termination. They may fear that if they don’t, they will be precluded from dismissing the employee for cause if the employee re-offends.
But employers should not proceed on a misapprehension. The starting point in Canadian employment law does not appear to have changed — employers do not have the right to suspend employees without pay in the absence of either an explicit or implied term to the contrary.
I am not aware of a judicially-considered case where an employer has included language in an employment agreement explicitly providing the right to suspend the employee without pay. But the case law suggests that if such an agreement were otherwise enforceable, it would create a right to suspend the employee in appropriate circumstances.
If there is no explicit agreement that the employer has the right to suspend the employee without pay, such an agreement can be implied based upon the norms and customs of the specific industry or corporation. This would require a fairly detailed analysis of the factual circumstances of any given case.
If the employer cannot satisfy the court that it had the right to suspend, then a suspension without pay will likely be found to be a constructive or wrongful dismissal.
Even if the right to suspend an employee without pay exists, an employer must exercise care and prudence in employing such a tool. An unreasonable suspension can also lead to a finding of wrongful dismissal, as occurred in two of the cases discussed above.
If the employer is concerned about its duty to progressively discipline an employee and “build a record” to support a subsequent termination for cause, then other forms of discipline can and should be used. Primarily these consist of warnings which should be documented. Whether or not a suspension is imposed, the employer should advise the employee of its concerns, tell the employee of the standards which he is expected to adhere to, and make him aware of the fact that failure to do so can lead to further discipline including the termination of employment.
For more information see:
• Haldane v. Shelbar Enterprises Ltd., 1999 CarswellOnt 3305, 46 C.C.E.L. (2d) 267 (Ont. C.A.)
• Reininger v. Unique Personnel Canada Inc., 2002 CarswellOnt 2355, 21 C.C.E.L. (3d) 278 (Ont. S.C.J.)
• Dreger v. Federated Co-Operatives Ltd., 2004 CarswellSask 93 (Sask. Q.B.)
Stuart Rudner practices civil litigation and employment law with Miller Thomson LLP’s Toronto office. He can be reached at (416) 595-8672 or via email at [email protected].
