Constructive Dismissals: Suspended Without Pay

Are you an employee who was suspended without pay? Maybe your employer placed you on an “involuntary personal leave of absence” instead? If so, you may have a claim for constructive dismissal and entitlement to termination pay. 

This article briefly explains what a constructive dismissal is, how a suspension without pay could result in constructive dismissal, and what can legally be done about it.  

What is Constructive Dismissal?

Constructive dismissal is a termination that results when an employer breaches the employment contract so significantly that it ends the employment relationship. This could result from an employer making a significant change to the agreement or creating a poisoned workplace that forces the employee out of the workplace.

A traditional constructive dismissal involves an employer making a significant change to a fundamental term of the employee’s agreement without the employee’s consent. This can include changes to: 

• Salary and other compensation, including but not limited to removal of bonuses, entitlement to shares, reimbursement or other reductions in pay;
• Duties and hours of work; 
• Position and title;
• Work location; and
• Workplace policies. 

Constructive dismissal can also occur if an employer breaches a fundamental and significant employment contract term. This includes breaches to implied employment contract terms that an employer must explicitly contract out of through a written employment contract.  

When Is An Unpaid Suspension A Constructive Dismissal? 

It might surprise many employees to know that employers can typically place them on paid administrative leave if they have the proper reasons for it. This typically does not rise to the level of a constructive dismissal unless the suspension was illegitimate or improper. Common circumstances of paid suspensions include workplace discipline and investigations. 

However, employers cannot place employees on unpaid suspensions without triggering a constructive dismissal by default. This is because suspending an employee without pay breaches the central implied term of the employment agreement – to be provided work by the employer and paid for that work.

Even if an employer has a term in the contract stating they can play an employee on a suspension without pay, it must be clear, unambiguous and clearly define the details for the suspension without pay, including how long it can last and when it can occur. In many cases, open-ended contract terms for suspension without pay may not be enforceable. 

Effectively, an employee has a claim for constructive dismissal against their employer the second they are placed on a suspension without pay where there is no express and clearly defined employer right to do so in the contract. Even if there is a term in the contract allowing for the unpaid suspension, if it is for an unreasonable or unjustifiable reason or length of time, the employee could still claim constructive dismissal and sue for their severance.   

What To Do When Suspended Without Pay

If you are an employee suspended without pay, you should take the following steps:

• Get a copy of and review your written employment contract, if one is available. 
• Gather any written evidence and documents.
• Consult with an employment lawyer. 

Because a constructive dismissal results in a loss of employment, employees are able to claim termination pay if their employment is constructively dismissed. The amount of termination pay could range from at least a few weeks of base salary to as high as 26 months of pay and other perks such as bonuses, benefits, etc. These entitlements would depend on the employment contract terms and your unique circumstances impacting your ability to find a comparable job.  

It is important to gather as much information, documents and evidence as possible before speaking with an experienced employment and litigation lawyer. Avoiding pitfalls for an otherwise strong constructive dismissal claim can be the difference between getting nothing and a reasonable severance package. 

Should You Resign? 

If you are suspended without pay or feel forced out of your workplace by your employer, you should not resign. A voluntary resignation means you are willingly ending the employment relationship and therefore giving up any entitlement to severance. In fact, it is a common defence to a claim of constructive dismissal that the employee in question resigned from their employment willingly and is owed nothing. 

It is also important not to wait too long before bringing your constructive dismissal claim, or it may appear as though you are accepting the change to your employment. It is best to confirm with your employer in writing that you are rejecting their changes or questioning them about pushing you out of the workplace.  

Conclusion

Suspensions without pay can be a strong ground for constructive dismissal. If you are an employee who was suspended without pay, your constructive dismissal could entitle you to severance and potentially other damages depending on the circumstances. 

Despite the general understanding and established law surrounding constructive dismissals and suspensions without pay, each case turns on its own facts and circumstances. A single line in a contract could have significant impacts on whether the unpaid suspension was authorized or if it amounts to a constructive dismissal.

Employment lawyers recognize how to construct arguments for an employee’s constructive dismissal case, and know-how to negotiate or litigate significant awards for employees.

Employees are always cautioned not to quit before consulting a lawyer since the entitlements of the employee will vary widely depending on the circumstances. These claims, if not put together properly, would risk an employee found to have abandoned their position, leaving the employee with no entitlements. Cases may be brought in front of a judge in court, as well as at the Ontario Labour Relations Board.

Our experienced employment and litigation lawyers at Achkar Law can help you determine whether you’ve been constructively dismissed, what next steps you should take, and maximize your severance through negotiation and litigation.

Further Readings

Can You Claim Constructive Dismissal Without Resigning?

Temporary Layoff Considered Constructive Dismissal At Common Law

Suspended At Work? Here Is Everything You Need To Know About Work Suspension

Constructive Dismissal: Non-Discretionary Bonus and Performance Reviews

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