Administrative Suspension Can Constitute Constructive Dismissal

What employers should know about Potter v. New Brunswick Legal Aid Services Commission

On March 6, 2015, the Supreme Court of Canada (SCC) released its decision in Potter v. New Brunswick Legal Aid Services Commission, which considers whether employers may place employees on administrative suspensions.¹ In its decision, the SCC held that employers do not have unfettered authority to withhold work from their employees and that legitimate business reasons must be shown in the context of any administrative suspension. Absent such reasons, an administrative suspension—even with pay—may be found to be a constructive dismissal.

The SCC's decision applies the reasoning in Bhasin v. Hrynew, a landmark 2014 ruling in which the SCC held that there is an implied duty to perform contracts in good faith.² Potter is the first case to apply Bhasin in the employment context.