The Supreme Court Of Canada Clarifies Test For Constructive Dismissal

If an employer puts a non-unionized employee on an indefinite administrative suspension with full pay but without explaining why, can this amount to a constructive dismissal? Yes, according to the Supreme Court of Canada in its recent decision of Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10.

The Supreme Court's decision in Potter is noteworthy for employers as it clarifies the common law tests for constructive dismissal, which, generally speaking, occurs when an employer shows it no longer intends to be bound by an employment contract but does not outright dismiss an employee. The Potter decision also highlights the importance of acting in good faith when dealing with employees, a topic that has been the focus of other recent Supreme Court decisions (see Bashin v Hrynew, 2014 SCC 71).