THE ADVOCATE 373
VOL. 76 PART 3 MAY 2018
D.J. Doorey, “Employer ‘Bullying’: Implied Duties of Fair Dealing in
Canadian Employment Contracts” (2005), 30 Queen’s L.J. 500.
98 In my view, legitimate business reasons constitute a requirement for
a finding that an administrative suspension based on an implied authority
to suspend is not wrongful. Other than in the context of a disciplinary suspension,
an employer does not, as a matter of law, have an implied authority
to suspend an employee without such reasons. Legitimate business
reasons must always be shown, although the nature or the importance of
those reasons will vary with the circumstances of the suspension.
There are a number of important takeaways from Potter, namely:
1. Where an action is not expressly authorized by the employment
contract, a careful analysis should be conducted as to whether the
action is impliedly authorized or consented to by the employee—
if not, the employer runs the risk of being found to have constructively
dismissed the employee.
2. Employers do not have the implied authority to place an employee
on non-disciplinary administrative suspension without legitimate
business reasons. If the employer wishes to have this ability, the
right should be expressly provided in the contract.
3. Employers have a duty not to withhold work in bad faith or without
justification. When this duty is not observed, continuing to pay the
employee may be insufficient to show that the employee was not
While the full interplay of the principles in Potter and temporary layoff
practices will require some time to assess in the lower courts, it is advisable
that employers intending to institute an administrative suspension for economic
reasons (temporary layoff), even where an implied or express power
under the contract to suspend an employee is found, should communicate
to their employees some sound business reasons—economic hardship,
downturn in business or the like—for their decision to suspend.
SOME GUIDANCE FOR EMPLOYERS AND EMPLOYEES
Based on the foregoing discussion on the employment standards legislation
in British Columbia and Alberta, it is possible to pinpoint certain pitfalls for
both employers and employees and to provide guidance on how to avoid
Guidance for Employers
Employers must be wary of resorting to temporary layoff. If not careful,
employers could face claims from employees of constructive dismissal. As