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Constructive Dismissal: Potter v. New Brunswick Legal Aid Services Commission

25 Mar 2015

The Supreme Court of Canada released a decision which addressed when suspending an employee may be considered constructive dismissal.

Mr. Potter was a lawyer who was appointed as an Executive Director of the New Brunswick Legal Aid Services Commission (“Commission”) for a seven-year term. During his term the Commission decided to suspend Mr. Potter with pay and advised him not to return to work until further notice.

The Supreme Court decided that Mr. Potter was in fact constructively dismissed. The court held that (1) the court must recognize an express or implied contract term that has been breached and determine whether the breach was serious enough to constitute a repudiation of the employment contract; and (2) then the court will determine whether an employer’s conduct alternatively demonstrates an intention not to be bound by the contract. The Court found in Mr. Potter’s case that the Commission did not have an express or implied right under the contract to indefinitely suspend Mr. Potter and that this breach was serious enough to constitute a repudiation of the contract.

What can we take away from the above? The court will look at the specific facts that took place in any given scenario. They will look to seek if there was an express or implied authority to suspend an employee in accordance with the terms of the contract, whether or not the suspension was justified and the length of the suspension. Employers must give an employee a justifiable reason for the suspension and the length of suspension must also be reasonable or risk being sued for constructive dismissal. Employers who may seek to suspend employees in the future would be wise to have the employee agree to it in writing at the commencement of the employment relationship.

The above article is for general information purposes only and does not constitute legal advice. If you have concerns with regard to the foregoing issues, please make an appointment with one of our lawyers or a qualified legal practitioner elsewhere.