Canadian Employment Law Today

CELT Sept 4 2013:celt 467.qxd 13-09-13 10:59 AM Page 9 CANADIAN EMPLOYMENT LAW TODAY Important to keep paying employee on administrative leave ...continued from page 3 tive leave). The commission intended to use this additional time to conclude the ongoing negotiations. Two months later, while settlement discussions continued, Potter commenced an action against the commission claiming he had been constructively dismissed by virtue of his forced administrative leave. Potter relied on a body of case law in which it had been found that, at least in some circumstances, an employee assigned no employment duties can claim constructive dismissal, even if paid full salary and benefits. Both the trial judge and New Brunswick Court of Appeal held that Potter's indefinite administrative leave did not result in his constructive dismissal. In reaching its decision, the Court of Appeal identified and applied the following six factors: •The duration of the suspension. •Whether another individual had been appointed to replace the suspended employee. •Whether the employee had been asked for his keys to the workplace. •Whether the employee continued to be paid and receive benefits. •Whether there was evidence the employer intended to terminate the employee at the time of the administrative leave/suspension. •Whether the employer had suspended the employee in good faith — that is, for bona fide business reasons. Considering the first factor, the Court of Appeal found the indefinite duration of the leave did support a finding of constructive dismissal. However, this factor alone was not sufficient to trigger a constructive dismissal. The court emphasized the following: First, Potter never expressed concern about the indefinite nature of his administrative leave, nor did he seek clarification about its duration. Second, the suspension did not reflect an intention on the part of the commission to unilaterally remove Potter's employment duties on a permanent basis. The administrative leave was implemented for sound business reasons — to allow the parties a period of reprieve during which they could continue to negotiate an amicable settlement to govern Potter's departure. Bottom line for employers If used properly, an administrative leave can be an important tool because it can provide an employer with the time necessary to follow legally recommended procedures which can reduce the risk of liability. When contemplating the use of an administrative leave, employers should consider the following: Maintain confidentiality. During the period of leave, avoid discussing publicly, or suggesting to others in the workplace, the employee has been or will be terminated. Share information with discretion and only on a "need-toknow" basis. Timeliness. While rushing to judgment is imprudent, moving too slowly gives rise to other concerns. The longer an individual remains on an indefinite administrative leave, the more likely the leave could be found to be a constructive dismissal. Take the time necessary to make a reasoned decision, but once the decision is made, act in a timely fashion. CELT ABOUT THE AUTHORS The suspension did not reflect an intention on the part of the employer to unilaterally remove the employee's employment duties on a permanent basis. Necessity. Place an employee on administrative leave only if it is necessary to protect the health and safety of other employees or the integrity of the business. Otherwise, an employer may have difficulty defending the bona fides of its decision. Pay the employee. Whenever possible, continue all forms of the employee's remuneration throughout the leave period so the employee is kept "whole." While it may be unpalatable, a failure to compensate an employee during an imposed leave of absence is likely to be viewed as disciplinary in nature and will weigh strongly in favour of a finding of constructive dismissal. Reserve judgment. During the leave, avoid pre-judging the ultimate outcome, and taking steps that suggest termination is a foregone conclusion. This includes advertising to fill the employee's position, issuing a record of employment or any other step suggesting the employer has already decided to terminate the employment relationship. Tom Gorsky Leah Simon Thomas Gorsky and Leah Simon are lawyers with Sherrard Kuzz LLP, a management-side employment and labour law firm in Toronto. Tom and Leah can be reached at (416) 603-0700 (Main), (416) 420-0738 (24 hour), or by visiting www.sherrardkuzz.com. WEBINARS Interested in learning more about employment law issues directly from the experts? Check out our live and on-demand webinars discussing topics such as managing termination, dealing with difficult people, employment agreements, rebuilding workplace culture, and building a strong employer brand. To view the webinar catalogue, visit www.employmentlawtoday.com/ webinars. Published by Canadian HR Reporter, a Thomson Reuters business 2013 9

• Cover