The courts giveth, and the courts taketh away

December 6, 2013 Rudner Law, Employment / HR Law & Mediation Employee Relations, Employment/Labour Standards, HR Policies and Procedures, Human Resources, Notice, Damages and Settlements, Payroll

The law of employment, like every area, is always evolving. This often works to the consternation of both employers and employees, who would like to have a sense of certainty regarding their rights and obligations. While it may sound self-serving, the ongoing evolution of the law is another reason why it is important to work with an employment lawyer on a regular basis, rather than consult once and assume that the law is the same a decade later. The cases below also serve as reminders of the unpredictability of the law.

In two recent examples of how the law can change, judicial decisions appear to have expanded employer rights in one case while reducing them in another. Both cases have called age-old rules into question; in the first, the rule that, by default, there was no common law right to temporarily lay an employee off, and in the other, the notion that an employer is entitled to dismiss an employee at any time, for almost any reason, so long as the requisite amount of notice or pay in lieu thereof is provided.

In Trites v. Renin Corp., an Ontario court adopted an approach to temporary layoffs that appears to be a significant change. In that case, the plaintiff had been temporarily laid off and claimed to have been constructively dismissed. Counsel for the plaintiff referenced the existing case law, which stood for the proposition that a temporary layoff is a constructive dismissal in the absence of a contractual agreement providing otherwise. However, the court wrote as follows:

In my view, there is no room remaining at law for a common law claim for a finding of constructive dismissal in circumstances where a temporary layoff has been rolled out in accordance with the terms of the ESA.”

This one sentence suggests a dramatic change in the law providing employers with the right to impose temporary layoffs so long as the terms comply with applicable legislation (which, in this case, they didn’t). Previously, the law was that in the absence of an explicit or implicit right to temporarily lay employees off, doing so would constitute a constructive dismissal. While legislation such as Ontario’s Employment Standards Act, 2000 provides parameters for temporary layoffs, it had not been interpreted as creating the right to impose them. Trites suggests that it does.

While Trites appears to have been a “win” for employers, Brownson v. Honda Canada Mfg., another recent case, purports to restrict an employer’s right to terminate the employment relationship on a without cause basis. It has long been recognized at law that an employer is entitled to dismiss employees at any time, for almost any reason (other than protected grounds under human rights legislation), so long as they provide appropriate notice or pay in lieu thereof. Of course, the situation is different where a collective agreement is in place.

In Brownson, the plaintiff was alleged to have engaged in misconduct. The company made the pragmatic decision to dismiss him with a package rather than engage in a lengthy and costly investigation. The plaintiff sued for wrongful dismissal, and there was a motion for summary judgment. In the context of that motion, the Court held as follows:

[12] By offering compensation in lieu of notice the Defendant submits it is merely terminating an employee in accordance with the law which permits an employer to terminate employment on adequate notice and in compliance with statue.

[13] If this termination had come out of the blue I might be persuaded. However, in the present case, the juxtaposition of the termination with a contemporaneous investigation of misconduct colours the ordinary procedures, such as escorting the terminated individual out of the workplace, with an innuendo that could give rise to the mental suffering alleged by the Plaintiff particular to the circumstances of the termination rather than the fact of being terminated.

[14] In the circumstances of the present case it is a triable issue whether the employer adopted the procedure intentionally to side step the criteria for fair treatment of an employee against whom cause is alleged. [emphasis added]

Notably, this motions court decision has since been upheld on appeal. Paragraphs 13 and 14 of the decision raise the question of whether there will be a change in the law precluding an employer from dismissing an employee without cause when there are live allegations of misconduct. It remains to be seen how the case will be finally decided, as well as whether the motions court Judge’s approach will be followed by others. However, the decision does appear to have extended the rights of employees that are suspected of misconduct. Ironically, it may provide them with greater protection against dismissal than the average employee that is not under a cloud of suspicion.

Ultimately, both of these cases may become footnotes in the history of employment law. However, they demonstrate that the law is not static, as well as the fact that it is impossible to predict the outcome of any case with certainty.

Stuart E. Rudner
Rudner MacDonald LLP
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Rudner Law, Employment / HR Law & Mediation

Employment Lawyers and Mediators at Rudner Law

Rudner Law is a firm specializing in Canadian Employment Law. They provide clients with strategic advice regarding all aspects of the employment relationship, negotiate and advocate on their behalf and represent them before courts, mediators and tribunals. Blog posts are written by Stuart Rudner, the principal and founder of Rudner Law, Brittany Taylor, a Senior Associate at Rudner Law, Nadia Zaman, an Associate at Rudner Law and Anique Dublin, a Law Clerk at Rudner Law. Read more