Canadian HR Reporter

CANADIAN HR REPORTER April 20, 2015 NEWS 3 is whether there is the implied right to suspend with pay. "e court has said that (the suspension) needs to be reason- able and justified. So they gave sort of a list of factors that might be considered, such as the duration of the suspension, whether it was implemented in good faith on the part of the employer — which in- cludes giving the employee reasons for the suspension — and demon- strating that there's a legitimate business purpose for the suspen- sion," she said. e need for the employer to demonstrate a legitimate busi- ness reason for the suspension represents a significant shift, said Joshua Concessao, an associate at Hicks Morley in Toronto. "Typically, in a constructive dismissal, the employee bears the burden of proof throughout, just as an employer bears the burden of proof in a cause dismissal," he said, adding this decision is a de- parture from that. "e onus then shifts to the employer to show that… the in- definite suspension with pay was done for legitimate business rea- sons. And that's quite significant." Duty to provide work e case also presents some in- teresting clarification around an employer's duty to provide work, said Terri Higdon, an associate at Cox & Palmer in St. John's. "Before, the common law said that employers don't have a duty to give you work, so that's what the employer argued in this par- ticular case," she said. e traditional position in com- mon law was that if you're not going to terminate an employee, you do have an obligation to retain him in his employment but you don't have an obligation to supply work, said Concessao. "ere were certain traditional categories of exceptions to that rule. So, for example, where your remuneration was commission- based... there, obviously, a case could be made that 'I have to per- form my job to even get paid.' And, similarly, if you're a public persona like a radio personality or an actor, the performance of your job is tied to… the value that your employ- ment provides." A further category that was tra- ditionally considered an exception is when some sort of reputational benefit is derived from the job — for example, a CEO who is put in the position of having to explain a resumé gap, said Concessao. "What the court does (in this decision) is say, 'No, that's not going to be the case anymore… every employee, regardless of status, derives an intrinsic worth from work itself.' So now the rule is you have to provide work, and you can't place someone on an indefinite suspension with pay, unless you can show a legitimate business reason." Importance of good faith Another key consideration was the issue of bad faith, said Cun- ningham. e court found New Brunswick Legal Aid Services did not act in good faith in its dealings with Potter, particularly when it came to its refusal to communi- cate the reason for his suspension. "Based on the reasoning here, they should be communicating that reason to the employee. e employer shouldn't be merely just saying, 'Stay home, we'll pay you, we'll call you if we need you.' ere is some risk to that because what's happening in that scenario is that the employer may have had legitimate business reasons, but they haven't taken that other part which is be transparent, commu- nicate to the employee the reasons for the change," he said. at lack of transparency and communication could be seen as bad faith, said Higdon. "If you have an employee and you're telling them not to come to work but you're not telling them why, that's bad faith," she said. "You can't just not have that in a contract and just expect to have them off for no reason and them not understanding why." e employer was also look- ing to terminate Potter for cause while he was on suspension, said Cunningham. "at would be an example of something where, in the court's view, the employer was not act- ing honestly and fairly to the em- ployee," he said. "What the court is telling us here is you're going to be in a better position if you're com- municating those reasons and dealing honestly and fairly with the employee." Next steps? One takeaway for employers is to consider amending employment agreements to include an express term permitting them to suspend with pay, said Fantini. "en you're not having to justi- fy whether there's an implied term — you've got it expressly in your employment agreements," she said. "Most employers wouldn't have an employment agreement that authorizes them to suspend an employee with pay in certain circumstances." Also, the court said not all ad- ministrative suspensions will be grounds for constructive dismissal. "ey were clear that the prin- ciples would not apply in certain cases — they said not in the case of layoffs for economic reasons, ad- ministrative suspensions for rea- sons unrelated to the employee's conduct or disciplinary suspen- sions," said Fantini. But one question that remains is if this decision would apply to employees who are suspended for conduct pending a workplace in- vestigation, she said. "I think what the Supreme Court of Canada is saying is that every case is fact-specific, but you're going to be in better stand- ing as an employer if the suspen- sion is for a shorter duration, it's for good faith, legitimate business reasons and it's been communi- cated to the employee." Lack of transparency, communication a concern SUSPENSION < pg. 1

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