Williams HR Law LLP

Employers, Take Care when Suspending During Workplace Investigations

April 27, 2016

[vc_row][vc_column width=”1/3″][vc_single_image image=”1986″ img_size=”full”][/vc_column][vc_column width=”2/3″][vc_column_text]There was a time when workplace harassment—at least by today’s definition and standards—was relatively common across Canadian workplaces. Be it an inappropriate comment here or an unseemly touch there, these unwelcome advances were simply part of another day at the office.

How times have changed. Nowadays, shifting societal attitudes, legislative developments and recent case law have prompted employers to take a zero-tolerance policy towards harassment. When allegations are made, the typical response across many organizations is to place the employee who is the subject of the complaint (the “respondent”) on administrative suspension with pay for the duration of the investigation. 

While this approach is reasonable, employers should consider a significant ruling by the Supreme Court of Canada (SCC) in Potter v. New Brunswick Legal Aid Services, 2015 SCC 10 (“Potter”)—which defined the employer’s right to suspend—before acting.

In that case, Mr. Potter was the Executive Director of Legal Aid for New Brunswick on a seven year term contract.  After a few years, the organization and Mr. Potter unsuccessfully negotiated a buyout of the remaining term of his employment.  Mr. Potter then took a medical leave of absence.  Prior to his return from the leave, Mr. Potter was placed on an indefinite administrative suspension with pay.  He was not provided with any reasons for the suspension decision, even after requesting an explanation.  After eight weeks, Mr. Potter claimed constructive dismissal from his employment.

In their ruling in Potter, the SCC affirmed the employer’s right to place an employee on administrative suspension where there is an employment agreement with a clause giving the employer the discretion to suspend, paid or unpaid. Where there is no express right to suspend, an employer may have an implied right to place an employee on administrative suspension if there are legitimate business reasons and the suspension is reasonable and justified—a determination made based on the circumstances of the case including the duration of the suspension, whether the suspension is paid or unpaid, good faith by the employer in imposing the suspension and valid business reasons.  Without an express or implied right to suspend, the suspension of an employee could be considered constructive dismissal.

The SCC ruled that New Brunswick Legal Aid Services did not have the implied right to suspend Mr. Potter. Why? According to the court, the organization did not act honestly and in good faith in suspending their Executive Director indefinitely, then refused to provide reasons for the suspension after he requested clarification. Further, New Brunswick Legal Aid Services recommended Mr. Potter’s termination shortly after deciding to suspend his employment, then took steps to conceal the termination decision.    

Learning from Potter, employers should ensure their written employment agreements include clauses explicitly reserving the right to suspend as doing so will allow employers to avoid having to justify their implied right to suspend in each circumstance.  Where there is no express right to suspend, an administrative suspension pending the outcome of a workplace investigation—often imposed to maintain the integrity of the investigation—could be reasonable and justified grounds based on the Potter framework.  Even if justifiable, employers should always act in good faith by communicating the purpose and business reasons for the suspension to the respondent in writing, then providing timelines for the investigation with an anticipated return to work date.    

By taking a proactive approach, organizations can help mitigate the risks that could arise if an employee challenges an administrative suspension, including potentially steep legal costs, lost productivity and other factors that can turn an otherwise sensible strategy into an employment law nightmare.

 

This blog is provided as information and a summary of workplace legal issues.

This information is not intended as legal advice.

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