Labour & Employment Law Blog

Employer Ordered to Pay $200,000 for Placing Employee on Administrative Suspension

Zeilikman Law

Zeilikman Law

Case Summary

In a landmark 2004 decision, the Supreme Court of Canada ruled that employers must continue to pay an employee during an administrative suspension. While this case was decided in the context of Quebec civil law, it was largely decided based on fundamental common-law contract principles and has since been adopted in the remaining common-law provinces of Canada. The decision is an important one, not only for establishing the rule that employers must pay their employees on an administrative leave, but also because it establishes the rules governing the manner in which employees can be placed on administrative leave. If not done correctly, employers may be liable for wrongful dismissal arising out of an administrative suspension.


Gilbert Cabiakman (“Mr. Cabiakman”) began working with Industrial Alliance Life Insurance Co. (“Industrial”) in 1995 as a Sales Manager. As a Sales Manager, Mr. Cabiakman was responsible for selling investment products and advising clients regarding transfers of money and securities, as well as hiring, training and supervising the branch’s sales staff. Three months into his job, Mr. Cabiakman was arrested and charged with attempted extortion for allegedly attempting to extort money from his securities broker. After an article was published in Montreal, about the incident, Mr. Cabiakman was placed on administrative suspension without pay. Two years later, Mr. Cabiakman was acquitted and reinstated to his position at Industrial. Nevertheless, Mr. Cabiakman sued for the money he lost while not working during the two years he was under administrative suspension.

The main issue to be decided by the Supreme Court of Canada was whether an employer has a power to suspend employment for administrative reasons, and if so, how such a power should be exercised.

The Supreme Court found that employers do have such a power, but that it must be exercised in the following manner:

“(1) the action taken must be necessary to protect legitimate business interests;
(2) the employer must be guided by good faith and the duty to act fairly in deciding to impose an administrative suspension; (3) the temporary interruption of the employee’s performance of the work must be imposed for a relatively short period that is or can be fixed, or else it would be little different from a resiliation or dismissal pure and simple; and (4) the suspension must, other than in exceptional circumstances that do not apply here, be with pay.”

Adopting this framework to the case at bar, the Supreme Court found that the suspension had in fact been appropriate, given that Mr. Cabiakman held a position of trust and there was a legitimate concern that Industrial’s business interests would have been damaged had he been allowed to continue working during the publicized criminal proceeding. The Supreme Court further found that Industrial had acted in good faith when suspending Mr. Cabiakman, and that they had sincerely done so to protect their business interests. However, the Supreme Court found that Industrial was nevertheless required to pay Mr. Cabiakman, and upheld the $200,000 in damages previously awarded by the Court of Appeal.


This decision is not new by any means, but remains an important one for employers and employees alike who find themselves embroiled in an administrative suspension. This decision was later acknowledged by the Supreme Court of Canada in Potter v New Brunzwick (Legal Aid Services Commission), 2015 SCC 10.

What’s most notable about this decision is that in all but a few exceptional circumstances, employees must be paid during an administrative suspension. Failing to do so could result in substantial liability for breach of contract. Further, in both the Cabiakman and Potter decisions, the employment contract was silent as to the employer’s right to suspend for administrative reasons. Had the employer relied on an express contractual provision which outlined their power to suspend without pay, the cases may have been decided differently. As such, for employers it is always advisable to speak to an employment lawyer and discuss the option of having a well-drafted “administrative suspension provision” included in the employment contract.

Cabiakman v. Industrial Alliance Life Insurance Co.  [2004] 3 S.C.R. 195.

The above article is for general information purposes only, does not constitute legal advice or create a solicitor-client relationship. Because each case is unique and factually driven, 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. We represent clients in the Greater Toronto Area including Toronto, North York, Markham, Vaughan, Thornhill, Newmarket, Aurora, Brampton, Mississauga, Barrie, Ajax, Whitby, Pickering and Oshawa.

Legal Receptionist

Zeilikman Law is an employment law firm located in Vaughan, Ontario. We are looking to hire a legal receptionist to join our firm. Preference will be given to candidates who have experience working as a receptionist at another law firm.

Location: Vaughan, Ontario.

Start Date: Immediately.

Hours: Monday to Friday, 9 am to 5 pm. Full time. In-person only. This is not a remote work position.

Wages: 35,000 to 40,000 per year.

Duties and Responsibilities:

  • Manage our firm’s multi-line telephone system to receive incoming calls.  Screen incoming telephone call inquiries to determine the nature of the telephone call and provide standard information related to our legal services.  Take and deliver messages and route incoming telephone calls to the appropriate staff person.
  • Answer general inquiries coming from the firm’s social media and website email.
  • Welcome in-person visitors upon arrival.  Direct visitors to the appropriate staff person and / or office or boardroom.
  • Organize in-person visitor schedule to prevent overlap and multiple bookings.
  • Receive, sort, and distribute daily mail and deliveries.
  • Arrange for couriers.
  • Keep front reception, kitchenette area and boardroom tidy.
  • Perform various clerical duties such as filing, photocopying, and faxing on an as-needed basis.
  • Process client or other payments.
  • May be asked to run minor errands outside of office such as attending post office to arrange a courier or pick up mail.
  • May be asked to assist other law clerks or lawyers of the firm as required and as appropriate.
  • Any other basic administrative duties or tasks as deemed appropriate.

Required Skills:

  • Basic knowledge of general office procedures including filing, faxing, and printing and copying.
  • Basic word processing computer skills.
  • Proficient in receptionist and telephone practices, etiquette, and decorum.
  • Professional attitude and appearance.
  • Excellent organizational skills.
  • Positive customer service attitude is a must.
  • Must be able to maintain confidential and sensitive information.

Education and Experience:

  • Highschool diploma or equivalent.
  • 1 – 2 years’ experience in an office setting with an emphasis in accounting, reception or clerical work is required.   We would prefer experience in a law firm environment.

Applications for this position should be sent via email to jennifer@zeilikmanlaw.com. All applications should include a cover letter, resume and at least two references. Only successful candidates will be contacted.