David Potter was executive director of the New Brunswick Legal Aid Services Commission. After he took sick leave, the Commission placed him on an indefinite paid suspension, without giving him an adequate explanation. Behind the scenes, steps were being taken toward his termination. Potter treated the suspension as a repudiation of his employment contract and brought a constructive dismissal claim.
In Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10, the Supreme Court considered whether an employer can remove an employee from work while continuing to pay salary, yet still fundamentally change the employment relationship. The answer depended on more than whether the paycheques continued. The Court examined contractual authority, the reasons for the suspension, its duration and what the employer's conduct objectively conveyed.
The Court described two routes to constructive dismissal. An employer may unilaterally breach an essential term of the contract, or engage in conduct which, considered as a whole, shows it no longer intends to be bound by the agreement. An administrative suspension isn't necessarily wrongful. But where it isn't contractually authorized, isn't justified by a legitimate business reason and is imposed indefinitely without a clear explanation, it may amount to a substantial contractual breach.
The Court allowed Potter's appeal. The absence of a genuine explanation mattered because an employee needs to understand why they are being removed from the workplace and on what terms. The Court also addressed treatment of pension benefits in the damages calculation, holding they weren't to be deducted in the circumstances.
For organizations, the case is an important warning against treating paid suspension as legally neutral. Continuing compensation is relevant, but so are procedural fairness in the employment relationship, the authority to suspend and the practical effect of keeping someone away from work indefinitely. A temporary investigation suspension supported by the contract and legitimate circumstances is a different situation from an unexplained removal with no apparent end.
Primary source: Supreme Court of Canada, Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10, https://decisions.scc-csc.ca/scc-csc/scc-csc/en/item/14677/index.do