‘Even if it says there's no guaranteed hours, the employer still needs to approach it from the angle of good faith’: employment lawyer explains why unpaid suspensions are still risky
In recent years, Canadian employers have seen rising challenges over constructive dismissal claims tied to suspensions and unpaid leave.
The Supreme Court of Canada’s 2015 decision in Potter v. New Brunswick Legal Aid Services Commission, and most recently, the B.C. Civil Resolution Tribunal’s April 2025 ruling in Putter v. Joey Tomato’s (Canada) Inc. highlight the fine line between lawful disciplinary measures and fundamental breaches of contract.
With punitive damages on the table in Putter, the decision makes clear that suspensions – paid or unpaid – can be treated as unilateral contract changes amounting to constructive dismissal.
“Potter and constructive dismissal overall are a little bit complicated,” says Jenson Leung, employment lawyer at KSW Lawyers in Vancouver.
“Every constructive dismissal case is assessed case-by-case by the judges, because it's extremely fact-based… if it is a unilateral change and it's significant, such as an unpaid suspension, then most of the time that would be something that's considered constructive dismissal.”
Both decisions confirm that placing an employee on suspension without clear contractual authority can trigger legal liability. Potter established the two-step test for constructive dismissal: first, did the employer breach an express or implied term?...
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