Cabiakman v. Industrial Alliance Life Insurance Co., [2004] 3
S.C.R. 195, 2004 SCC 55
Industrial Alliance Life Insurance Company Appellant
v.
Gilbert Cabiakman Respondent
Indexed as: Cabiakman v. Industrial Alliance Life
Insurance Co.
Neutral citation: 2004 SCC 55.
File No.: 29584.
Hearing and judgment: March 19, 2004.
Reasons delivered: July 29, 2004.
Present: Iacobucci, Bastarache, Binnie, Arbour,
LeBel, Deschamps and Fish JJ.
on appeal from the court of appeal for quebec
Employer and employee — Individual contract of
employment — Employee charged with attempted extortion unrelated to his work —
Suspension without pay imposed by employer until final decision of courts to
protect interest of business — Contract of employment between parties silent as
to employer’s power to suspend — Whether employer may suspend without pay for
administrative reasons employee against whom criminal charges pending.
The respondent joined the appellant insurance company
in August 1995 as a sales manager. The parties entered into a contract of
employment for an indeterminate term that included a two‑year salary
guarantee. Under that agreement, the respondent was responsible for hiring,
training and supervising the branch’s sales staff. He also sold investment
products and advised customers about transfers of securities or cash. Three
months after he was hired, the respondent was arrested at his home for an
attempt to extort money from his securities broker. He was held in custody for
a few days and was then released after pleading not guilty to the criminal
charges against him. After consulting its legal counsel, the appellant
suspended the respondent’s contract without pay until the final decision of the
courts because of the connection between the nature of the charges and the
duties of his position. The appellant did this to protect the business’s image
and to protect its customers, if need be. The respondent then commenced an
action against the appellant for dismissal without good and sufficient cause in
which he sought damages for lost income together with moral and punitive
damages. At his criminal trial, the respondent was acquitted in a judgment
delivered from the bench and the appellant reinstated him in his position
shortly thereafter, some two years after he had been suspended. At the civil
trial, the Superior Court concluded that the suspension imposed by the
appellant was justified but held that the failure to pay the respondent was
unjustified. It therefore allowed the respondent’s claim and ordered the
appellant to compensate the respondent for the salary lost during the period of
the suspension. The Court of Appeal affirmed that judgment but varied its
disposition to award the respondent the quantum of damages fixed by the
parties.
Held: The
appeal should be dismissed.
According to the Civil Code of Québec, a
contract of employment imposes reciprocal obligations on the parties. The
employer must allow the employee to perform the work agreed upon, pay the
employee remuneration and take any necessary measures to protect the employee’s
health, safety and dignity. The employee is bound to carry out his or her work
with prudence and diligence and to act faithfully and honestly toward the
employer. The flexibility and malleability of an individual contract of
employment enable the parties to provide in the contract that the employer has
the power to suspend, and to establish the conditions on which it may do so.
Absent such an agreement, an employer has, in Quebec civil law, a unilateral
power to temporarily suspend the effects of an individual contract of
employment or certain of the obligations under the contract. The power to
impose a disciplinary suspension is generally recognized. As for the power to
suspend for administrative reasons, it is a necessary component of the power of
direction the employee has accepted if the performance of his or her work
should compromise the business’s interest. This residual power to suspend for
administrative reasons because of acts of which the employee has been accused
is thus an integral part of any contract of employment, but it must be
exercised in accordance with certain requirements. First, the action taken
must be necessary to protect legitimate business interests. In this regard,
the employer has the burden of showing that its decision is fair and
reasonable. To determine whether a suspension was reasonable, it must be
considered from the perspective of the point in time when the decision was
made. Facts subsequent to the employer’s decision may be admissible in
evidence, however, if they are relevant and if they can be used to determine
whether the employer’s decision was justified at the time it was made. Second,
the employer must be guided by good faith and the duty to act fairly in
deciding to impose an administrative suspension. Although an employer does not
have to make its own inquiries, either of the employee or of the competent
public authorities, to ensure that the charges are well founded, it does have
an obligation to allow the employee to explain the situation if the employee
wishes to provide his or her version of the facts. Third, the temporary
interruption of the employee’s performance of the work must be imposed for a
relatively short period that is or can be fixed, or else it would be little
different from a resiliation or dismissal pure and simple. Finally, the
suspension must, other than in exceptional circumstances, be with pay. The
employer cannot unilaterally avoid its obligation to pay the employee’s salary
if it denies the employee an opportunity to perform the work. Thus, an
employee on whom an administrative suspension without pay is imposed might, as
a rule, properly regard that measure as a constructive dismissal. Also, there
is an implied condition that the legal situation between the parties be
restored after the cause of non-performance of the employee’s duties has ceased
to exist.
In the case at bar, the suspension of the respondent
was justified, as it was made to protect the business’s interests. In light of
the nature of the offence with which the respondent was charged and the high
level of responsibility associated with his position, the action taken was
necessary to protect the image of the service provided by the appellant and to
protect its customers. Also, the appellant proved that it could not have
assigned the respondent to another position pending the outcome of the criminal
proceedings. In general, the appellant conducted itself properly, although it
would have been preferable for the appellant to give the respondent an
opportunity to provide it with his version of the facts. However, the
appellant cannot justify its failure to pay the respondent during the
suspension. It was not open to the appellant to unilaterally impose a
temporary cessation of performance of the correlative obligations while
requiring that the employee continue to be available. The respondent was not
required to endure the suspension, imposed on him by the appellant, of the
performance of his work and also be denied the consideration for that work,
namely his salary.
Cases Cited
Distinguished: Laurier Auto Inc. v. Paquet, [1987]
R.J.Q. 804; Thomas v. Surveyer, Nenniger & Chênevert Inc. (1989),
34 Q.A.C. 61; referred to: Air-Care Ltd. v.
United Steel Workers of America, [1976] 1 S.C.R. 2; Syndicat
du personnel de soutien du Cégep François‑Xavier Garneau v. Cégep
François‑Xavier Garneau, [2003] Q.J. No. 3580 (QL); Centre
d’adaptation jeunesse inc. v. Syndicat canadien de la fonction publique
(1986), 5 Q.A.C. 241; Reference re Public Service Employee
Relations Act (Alta.), [1987] 1 S.C.R. 313; Wallace v. United
Grain Growers Ltd., [1997] 3 S.C.R. 701; Sûreté du Québec et
Association des policiers provinciaux du Québec, [1991] T.A. 666; Fraternité
des policiers de la Communauté urbaine de Montréal et Communauté urbaine de
Montréal, [1984] T.A. 668; C.U.M. et Fraternité des policiers de la
C.U.M., D.T.E. 86T-312; Cie minière Québec Cartier v. Quebec (Grievances
arbitrator), [1995] 2 S.C.R. 1095; Association des pompiers de
Sherbrooke et Ville de Sherbrooke, [1989] T.A. 211; Re United
Automobile Workers, Local 127 and Eaton Springs Canada Ltd. (1969),
21 L.A.C. 50; Re United Steelworkers, Local 3129 &
Moffats Ltd. (1956), 6 L.A.C. 327; Pharand et Gatineau (Ville
de), D.T.E. 2003T-943; Deux-Montagnes (Ville de) et Fraternité des
policiers de Deux-Montagnes/Sainte-Marthe-sur-le-Lac, [2002]
R.J.D.T. 1683; Re James Bay Lodge & Construction and General
Workers’ Union, Local 602 (1993), 33 L.A.C. (4th) 23; Re
Kimberly-Clark of Canada Ltd. and Canadian Paperworkers’ Union, Local 307
(1981), 30 L.A.C. (2d) 316; Columbia Builders Supplies Co. v.
Bartlett, [1967] B.R. 111; Machtinger v. HOJ Industries Ltd.,
[1992] 1 S.C.R. 986; Internote Canada Inc. v. Commission des
normes du travail, [1989] R.J.Q. 2097.
Statutes and Regulations Cited
Act respecting labour standards, R.S.Q., c. N‑1.1 [am. 2002, c. 80],
ss. 2, 3, para. 1(6), 79.4, 82, 82.1, 83, 122 to 123.5.
Civil Code of Québec, S.Q. 1991, c. 64, arts. 1379, 1380, 1383, 1432,
1434, 1435, 1436, 1437, 1604, 1605, 2085, 2087, 2088, 2091, 2092, 2094.
Labour Code, R.S.Q., c. C-27, ss. 12 to 19, 109.1 et seq., 110.
Authors Cited
Athanassiadis, Mimikos. “Sources
of Disciplinary Power: an Analysis of the Employment Contract”
(1998), 5 R.E.J. 267.
Bich, Marie-France. “Contracts of
Employment”, in Reform of the Civil Code, vol. 2-B, Obligations.
Texts written for the Barreau du Québec and the Chambre des notaires du
Québec. Montréal: Barreau du Québec, 1993, 1.
Bich, Marie-France. “Le pouvoir
disciplinaire de l’employeur — fondements civils” (1988), 22 R.J.T. 85.
Bonhomme, Robert,
Clément Gascon and Laurent Lesage. The Employment Contract under the
Civil Code of Québec. Cowansville, Qué.: Yvon Blais, 1994.
Côté, Pierre-André. The
Interpretation of Legislation in Canada, 3rd ed. Scarborough,
Ont.: Carswell, 2000.
D’Aoust, Claude, Louis Leclerc et
Gilles Trudeau. Les mesures disciplinaires: étude
jurisprudentielle et doctrinale, monographie n_ 13.
Montréal: École de relations industrielles, Université de Montréal,
1982.
Gagnon, Robert P. Le droit du
travail du Québec, 5e éd. Cowansville, Qué.: Yvon Blais, 2003.
Morin, Fernand, et Jean-Yves
Brière. Le droit de l’emploi au Québec, 2e éd. Montréal:
Wilson & Lafleur, 2003.
APPEAL from a judgment of the Quebec Court of Appeal,
[2002] Q.J. No. 8521 (QL), affirming a judgment of the Superior Court,
[2000] R.J.Q. 1508, [2000] R.J.D.T. 504, [2000] Q.J. No. 1407 (QL).
Appeal dismissed.
Michel St-Pierre
and Jacques Reeves, for the appellant.
Raphaël Levy, for
the respondent.
English version of the judgment of the Court delivered
by
LeBel and Fish JJ. —
I. Introduction
1
This appeal raises the question of the scope and nature of an employer’s
power to suspend an employee in a private labour law context. The issue is
whether an employer has an obligation to pay an employee while the employee is
under what is described as an “administrative” suspension, where the employer
has imposed the suspension to protect the interests of the business and its
customers while criminal charges are pending against the employee.
2
The trial judge concluded that the suspension was justified, because the
employer was acting in good faith in the circumstances. However, he held that
a suspension without pay was unjustified and ordered the appellant to
compensate the respondent for the salary lost during the period of the
suspension. The Court of Appeal unanimously affirmed that judgment.
3
The problem in this case arises out of the suspension of the respondent
without pay for about two years at a time when he was the sales manager of one
of the branch offices of the appellant, an insurance company. Shortly after he
was hired, the respondent was arrested for attempted extortion. After an
article about the case was published in a large circulation weekly newspaper in
the Montréal area, the appellant decided to suspend the respondent without pay
until the outcome of the legal proceedings brought against him by the Crown was
decided. According to the appellant, it took this action, which it
characterized as “administrative”, to protect its reputation and to preserve
the image of the service it provides to its customers.
4
Following the trial, at which he was acquitted, the respondent was
reinstated in his position at the Industrial Alliance Life Insurance Company
(“Industrial”), where he has worked ever since. The issue is who must absorb
the economic loss suffered by the respondent while he was suspended. The loss
amounts to $200,000, as the parties have agreed on the quantum of damages.
5
The contract between the parties is silent with respect to the
employer’s power to suspend. The power to suspend for disciplinary reasons is
not in issue. The question here is whether, in a legal situation governed
solely by the Civil Code of Québec, S.Q. 1991, c. 64
(“C.C.Q.”), and the individual contract in issue, the employer has a residual
power to suspend for administrative reasons, independent of the disciplinary
suspension power, that is implicitly derived from the contract of employment
and can be exercised at the employer’s initiative in the business’s interest.
If so, the Court is asked to determine the basis of that power and to delimit
its scope in order to decide, specifically, whether the power could be used to
impose a suspension without pay in the circumstances of the instant case.
6
For reasons that differ in part from the Court of Appeal’s reasons, it
was our opinion, at the conclusion of the hearing, that the appellant’s appeal
should be dismissed. This Court has therefore affirmed the relief granted,
namely an order that the appellant pay the respondent the salary that was
withheld from him during his suspension.
II. Origin
of the Case
7
The respondent, Gilbert Cabiakman (“Cabiakman”), was a sales
manager for the London Life Insurance Company from 1984 to 1995. During that
period, he became friends with his immediate supervisor, André Sarrazin
(“Sarrazin”). Sarrazin then left London Life to work for the appellant,
Industrial.
8
In August 1995, Sarrazin contacted Cabiakman and persuaded him to
leave his job and join Industrial to work as a sales manager in its Ville
Saint-Laurent branch. Cabiakman was hired because of his particular
qualifications in the sale of insurance policies and related products. He also
had the qualities needed to deal effectively with the target clientele in that
field.
9
The parties entered into a contract of employment that, although it was
for an indeterminate term, included a two‑year salary guarantee.
10
Under that agreement, Cabiakman was responsible for hiring, training and
supervising the branch’s sales staff. His duties also included selling
investment products such as insurance plans, retirement plans, mutual funds and
pension funds to certain customers. He was also responsible for transfers of
money from one institution to another for major customers. On occasion, he
also advised customers about transfers of securities or cash. As a result,
Cabiakman’s integrity was of fundamental importance for his dealings both with
his employer’s customers and with the sales team he supervised.
11
On about November 9 or 10, 1995, three months after he was hired,
Cabiakman was arrested at his home for attempted extortion. At the time, he
was on a week’s parental leave. He was charged with conspiracy to extort money
from his securities broker. The broker had allegedly caused him to lose money
on the stock market. Cabiakman was held in custody until Monday,
November 13. He was then released after pleading not guilty to the
criminal charges against him.
12
Two days later, he told Sarrazin about his arrest. Sarrazin told him
not to worry and to keep working. The following week, Cabiakman learned that
an article published in a weekly tabloid recounted the circumstances of the
charges against him and stated his name. Cabiakman and Sarrazin immediately
obtained a copy. Sarrazin then informed Cabiakman that he could no longer keep
quiet about the matter and that he had to inform management.
13
The vice‑president for sales, Paul‑Émile Burelle, then
submitted the case to the company’s legal counsel. On their advice, Burelle
decided to suspend Cabiakman’s contract without pay [translation] “until the final decision of the courts in this
case”. Industrial conducted no investigation and did not even give Cabiakman
an opportunity to explain the situation. Cabiakman was told about his
suspension on December 1, 1995.
14
Industrial decided to do this because of the connection between the
nature of the charges and the duties of Cabiakman’s position. It suspended
Cabiakman to protect the business’s image and reputation and the integrity of
its relations with its customers. The other purpose of the administrative
action taken was to protect its customers, if need be.
15
On February 1, 1996, Cabiakman instituted legal proceedings
against Industrial for dismissal without good and sufficient cause. He claimed
that Industrial’s action in suspending him for an indefinite period that lasted
two years was equivalent to dismissal. In his original declaration, he sought
$279,807.60 in lost income, moral damages and punitive damages.
16
The preliminary inquiry in Cabiakman’s case was held on
November 21, 1996 and he was committed for trial. On
October 8, 1997, he was acquitted in a judgment delivered from the
bench, without even having to testify. On November 24, 1997, he was
reinstated in his position as soon as Industrial was informed that he had been
acquitted. He has worked there ever since.
17
In his amended declaration dated January 26, 1998, Cabiakman
added that during his suspension, from December 1, 1995, to
November 23, 1997, he was unable to find another job or earn any
income. In his reamended declaration dated May 15, 1998, he claimed
an additional $175,000 in damages for the inconvenience he had suffered, for a
total of $454,807.60.
18
The parties agreed that the quantum of damages was $200,000. In its
judgment of April 20, 2000, the Superior Court allowed
Cabiakman’s claim, but only in the amount of $175,000: [2000] R.J.Q.
1508. The Court of Appeal affirmed that judgment on
December 12, 2002 but awarded the full amount fixed by the parties:
[2002] Q.J. No. 8521 (QL).
III. Judicial History
A. Superior Court (Laramée J.)
19
In the trial judge’s opinion, when the appellant suspended the
respondent as it did, it stripped him of his dignity and breached its
obligation to provide the work agreed to and allow the performance of that
work, contrary to art. 2087 C.C.Q. The trial judge said that, as a
rule, contracts do not survive deviations of this kind, which are equivalent to
unilateral resiliation. However, he held that in the circumstances it mattered
little whether this was a resiliation followed by renewal of the contract, or a
simple suspension of the contract. The respondent had suffered substantial
damage because of the appellant’s failure to perform its obligation to provide
the work and pay the appellant.
20
The trial judge then considered whether, in the circumstances, the
administrative action taken by the appellant was justified. He noted that the
appellant had clearly made its decision based on the possible impact on the
business of the charges laid against the respondent, who held a position of
trust. He added, however, that the employer is not presumed to act in good
faith. The appellant therefore had to prove that it was acting in good faith,
since it had deliberately breached its obligations to the respondent.
21
The judge concluded that the appellant had established a clear
connection between the alleged offence and the position held by the
respondent. He noted that the potential harm to the appellant was obvious. In
his opinion, an employer may take actions that are necessary for the survival,
and even for the proper operation, of the business. He noted that the
appellant had taken action to mitigate the harm that the media attention to the
charge and potential conviction of the respondent could have caused. The judge
accepted the appellant’s evidence that it had been unable to assign the
respondent to another position during his suspension. In the judge’s opinion,
it was open to the appellant to act in good faith in response to the publicity
given to charges laid against one of its sales managers. For those reasons, he
conceded that the suspension had been imposed in good faith.
22
Having reached that conclusion, the judge nonetheless allowed the
respondent’s action in damages and ordered the appellant to compensate the
respondent for the salary lost during the suspension. He concluded that the
appellant was able to justify its decision not to provide work but not the
failure to pay the respondent, since it had not established that continuing to
pay his salary could have damaged its image. The judge stated that the balance
of economic convenience had to tip in favour of the respondent.
23
The trial judge’s final observation was that if the appellant had
entertained the slightest doubt as to the employee’s integrity, its decision to
reinstate him after the acquittal would have been inconsistent with the reasons
the employer itself cited for suspending him, which were based on the
relationship between the position he held and the trust that had to exist for
him to perform his duties. The trial judge concluded that the appellant had to
share with the respondent the burden of its discretionary decision to suspend
him.
24
The judge awarded an amount of $175,000, representing two years’ salary
plus interest. However, he dismissed the claim for moral damages on the ground
that the decision to suspend the respondent was not made in bad faith and was
in fact a reasonable administrative decision in the circumstances.
B. Court
of Appeal (Rothman, Dussault and Delisle JJ.A.)
25
The Court of Appeal unanimously affirmed the trial judgment. The court
first found that the suspension imposed by the appellant was justified. It
then accepted the trial judge’s reasoning, which had led to the conclusion that
the appellant had to bear the economic loss resulting from the suspension even
though the suspension was justified. The court held that it fell to the
appellant to bear the consequences of the suspension because a decision of that
nature was, in essence, up to it alone to make. The court also allowed the
respondent’s cross‑appeal that the disposition in the trial judgment be
varied in light of the parties’ agreement regarding the quantum of damages. It
therefore ordered the appellant to pay the respondent $200,000, with interest
at the legal rate and the additional indemnity as of
January 17, 2000.
IV. Issues
26
This appeal raises several questions, all of them relating to the
performance and suspension of an individual contract of employment. Does an
employer have a residual power, in addition to the power to impose a suspension
as a disciplinary penalty, to unilaterally suspend the effects of an individual
contract of employment? If so, what is the legal basis for that power? What
conditions are applicable to the exercise of the power? Are there mechanisms
for reviewing the employer’s discretion, if it is found to exist? Finally, in
the context of the instant case, could the employer exercise this power to
suspend an employee against whom criminal charges had been laid?
V. Analysis
A. The Nature of a Contract of Employment
Governed by the Civil Code of Québec
27
It should be noted that the situation at issue here is not governed by a
collective agreement. The instant case concerns an individual contract of
employment governed solely by the Civil Code of Québec. It is a
synallagmatic contract (art. 1380 C.C.Q.) and a contract of
successive or continuous performance (art. 1383 C.C.Q.). The Civil
Code of Québec defines such a contract as one by which an employee
undertakes to do work for remuneration under the direction or control of an
employer (art. 2085 C.C.Q.). An agreement may be characterized as a
contract of employment when the following three elements
exist: performance of work by the employee, payment of wages by the
employer and a relationship of subordination between the parties. These three
elements also define the basic content of the contract of employment.
28
The legal subordination of the employee to the employer is the most
important characteristic of an agreement where an attempt is made to
characterize the agreement as a contract of employment and to distinguish it
from other onerous contracts. The creation of the relationship of
subordination also implies acceptance by the employee of the employer’s power of
direction and control.
29
A contract of employment imposes reciprocal obligations on the parties.
The employer agrees to allow the employee to perform the work agreed upon, to
pay the employee remuneration and to take any necessary measures to protect the
employee’s health, safety and dignity (art. 2087 C.C.Q.). The employee is
bound to carry out his or her work with prudence and diligence and to act
faithfully and honestly toward the employer (art. 2088 C.C.Q.). In light
of the mutual obligations of the parties, we shall now examine the central
issues in this case.
B. The Problem of the Suspension by the
Employer of Performance of the Contract of Employment
(1) The Theoretical Problem
30
In this appeal, we are asked to determine whether an employer has the
implicit power to suspend temporarily the effects of a contract of employment
or certain of its obligations thereunder. The question involves significant
problems in terms of legal theory. There are no provisions in any legislation,
be it the Civil Code or a special Act, that expressly set out the basis
for the employer’s power to suspend a contract of employment, be it for
disciplinary reasons or for what are called administrative reasons.
31
The very concept of a power to unilaterally suspend the performance of
the synallagmatic obligations under a contract is in fact difficult to
reconcile with the classical theory of obligations. It is hard to imagine how
one party could unilaterally, as and when it liked, suspend the effects of a contract
that had been validly entered into in the absence of an agreement between the
contracting parties to recognize the existence of such a power.
32
As there was no such agreement in the case at bar, we must now consider
whether, in Quebec civil law, an employer has a unilateral power to temporarily
suspend the effects of an individual contract of employment or certain of the
obligations under the contract. It may then be necessary to determine the
nature and legal basis of that power and delimit its scope and the conditions
on which it may be exercised.
33
Some clarifications must be made at the outset of this analysis. This
appeal does not involve an administrative layoff imposed for economic reasons
in the sense in which that expression is normally understood. This is not a
situation in which the employer has suspended the performance of work by the
employee, and the employer’s correlative obligation to pay the employee,
because of extrinsic factors, such as financial difficulties, a shortage
of work, technological change or reorganization of the business. In this case,
the decision to suspend the employee was, to a certain extent, a result of the
acts of which the employee was accused. In order to be perfectly clear, we
would therefore reiterate that the only question raised by this appeal relates
to the unilateral power to suspend an employee against whom criminal charges
have been laid, for purely administrative reasons connected with the interests
of the business.
(2) The Unique Nature of the Contract of
Employment
34
Commentators have offered a variety of explanations for the existence of
the employer’s power to suspend performance of the contract of employment.
Some have suggested that this unilateral power to suspend the successive obligations
under a contract of employment can be justified in light of the unique nature
of that type of contract. Under this approach, it is argued that a contract of
employment produces different effects because of its unique nature. (See
F. Morin and J.‑Y. Brière, Le droit de l’emploi au Québec
(2nd ed. 2003), at paras. II‑115 and II‑160.)
35
Morin and Brière considered the question of a layoff for economic,
technical, administrative or organizational reasons and stated that [translation] “[t]he legal rationalization
for the operation requires that we examine the unique, distinctive and sui
generis nature of the contract of employment” (para. II‑160).
36
From this perspective, the unique nature of a contract of employment
derives largely from the fact that the employee is legally subordinate to the
employer’s power of direction and control, and from the intuitu personae nature
of the contract. Although the importance of this last characteristic should be
tempered in light of the nature of a large company in the contemporary context,
it is nonetheless useful in relation to penalties for failure to perform
contractual obligations, particularly in the case of management personnel.
(3) Labour Relations Practices and Suspension
of the Performance of Work
37
The unique nature of the contract of employment can be seen in practices
relating to collective labour relations or individual employment relationships,
which tend to confirm that some interruptions in the performance of the
obligations inherent in an employment relationship do not necessarily terminate
the relationship. Certain common practices in the labour market, such as
layoffs for economic reasons and absences owing to sickness or accidents or, in
a collective labour relations context, strikes or lockouts, are forms of
suspension of performance of the contract of employment that have long been
recognized and accepted.
38
These practices have been entrenched, at least partially, by the
legislature in, inter alia, the Act respecting labour standards,
R.S.Q., c. N-1.1 (“A.L.S.”). That Act applies to employees, with the
exception of senior management personnel, although certain provisions do apply
to the latter (ss. 2 and 3, para. 1(6) A.L.S.). The Act respecting
labour standards does not define the legal basis for those interruptions,
but it does specify the procedures and legal requirements that apply to the
various situations in which a contract of employment may be suspended.
39
In this context, a layoff is not as a rule regarded as a breach of the
contract of employment. Rather, a layoff for economic reasons is treated as a
unilateral, temporary suspension of the work and of the employer’s performance
of its obligations. Employees are laid off to meet the needs of the business.
In Air‑Care Ltd. v. United Steel Workers of America, [1976]
1 S.C.R. 2, this Court recognized the existence of the employer’s
power to lay employees off in the context of the application of a collective
agreement, although it did not state the basis for that power.
40
The Act respecting labour standards sets out the conditions on
which the employer’s power to lay an employee off may be exercised. Before
laying an employee off for six months or more, the employer must give written
notice if the employee has at least three months of uninterrupted service
(ss. 82 and 82.1 A.L.S.). An employer who does not give notice must pay
the employee a compensatory indemnity in lieu of notice (s. 83 A.L.S.).
The notice, which varies with the employee’s length of service (s. 82,
para. 2 A.L.S.), is a minimum standard and does not prevent the employee
from claiming a larger indemnity in lieu of notice under the rules of the civil
law set out in arts. 2091 and 2092 C.C.Q. (s. 82, para.
4 A.L.S.).
41
Finally, it is recognized in labour law, in the collective labour
relations context, that strikes and lockouts also operate to suspend the
performance of the correlative obligations of the parties to the agreement
without terminating the employment relationship. For example, ss. 109.1 et
seq. of the Labour Code, R.S.Q., c. C‑27 (“L.C.”),
prohibit the hiring of substitute workers to replace striking or locked out
employees. Section 110 L.C. expressly provides that the employment
relationship continues during the strike or lockout. It reads as follows: “No
person shall cease to be an employee for the sole reason that he has ceased to
work in consequence of a strike or lock‑out. Nothing in this code shall
prevent an interruption of work that is not a strike or a lock‑out.”
42
Failure by the employee to perform his or her work where the employee is
absent by reason of sickness or accident also temporarily suspends the
performance of the contract of employment but does not terminate it. On this
point, the first paragraph of s. 79.4 A.L.S. provides that “[a]t the
end of the absence owing to sickness or accident, the employer shall reinstate
the employee in the employee’s former position with the same benefits,
including the wages to which the employee would have been entitled had the employee
remained at work.”
(4) Recognition of a Basis for the Power to
Suspend for Disciplinary Reasons
43
The employer’s power to impose a suspension as a disciplinary
penalty is generally recognized and is not in issue in this appeal. The existence
of this power has been uniformly recognized in the case law, both by
specialized labour relations tribunals and by the superior courts in the
exercise of their power of judicial review or of their direct jurisdiction over
disputes arising out of contracts of employment.
44
As well, some statutes tacitly recognize the power to suspend for
disciplinary reasons, given that they provide for how that power may be
exercised. For example, the legislature prohibits a series of practices in
ss. 12 to 14 L.C. and then provides in the second paragraph of s. 14
L.C. that “[t]his section shall not have the effect of preventing an employer
from suspending . . . an employee for a good and sufficient reason,
proof whereof shall devolve upon the said employer.” (See also ss. 15 to
19 L.C., and the second paragraph of s. 79.4 and ss. 122 to
123.5 A.L.S.)
45
In a context of individual relations, the power to suspend an employee
for disciplinary reasons has been recognized by the commentators, although they
have attributed it to various sources. Some of them say that it is implied by
the employer’s power of direction or describe it as a necessary corollary to
the power of control and direction over the employee’s work. The basis for the
power therefore lies in the very nature of the contract of employment and can
thus be inferred from art. 2085 C.C.Q., or it simply derives from custom
and is sanctioned by art. 1434 C.C.Q. The suggestion has also been made
that it can be explained on the basis of art. 1604 C.C.Q. by likening
it to a reduction of the employer’s obligations for a period proportional to
the seriousness of the employee’s non-performance. (See M.‑F. Bich,
“Le pouvoir disciplinaire de l’employeur — fondements civils” (1988), 22 R.J.T. 85;
M.‑F. Bich, “Contracts of Employment”, in Reform of the Civil
Code, vol. 2-B, Obligations (1993), 1, at pp. 11‑12;
C. D’Aoust, L. Leclerc and G. Trudeau, Les mesures
disciplinaires: étude jurisprudentielle et doctrinale (1982), at
pp. 56-57; Morin and Brière, supra, at paras. II‑113 to
II‑118; M. Athanassiadis, “Sources of Disciplinary Power: an
Analysis of the Employment Contract” (1998), 5 R.E.J. 267;
R. P. Gagnon, Le droit du travail du Québec
(5th ed. 2003), at p. 98.)
46
Thus, it is recognized that an employer has the power to suspend an
employee as a disciplinary sanction. However, the question as to whether an
employer has a unilateral power to suspend the effects of an individual
contract of employment for administrative reasons remains unanswered. This
question has been a matter of controversy among Quebec’s commentators and
judges, and the debate continues today.
(5) The Problem of Administrative Suspension:
Proposed Solutions
47
The commentators remain deeply divided on this question. Some maintain
that the basis for administrative layoffs can be found in the recognized
practice in the field. (See Morin and Brière, supra, at para. II‑160.)
Others argue that an employer’s power to suspend the performance of its
correlative obligations under the contract implicitly forms part of the
contract of employment. They base this conclusion on the fact that the Act
respecting labour standards contains provisions that govern layoffs in
non-unionized workplaces. (See R. Bonhomme, C. Gascon and
L. Lesage, The Employment Contract under the Civil Code of Québec
(1994), at para. 4.3.2.)
48
On the other hand, some authors say that absent the express or implied
consent of the employee, a layoff is always in the nature of a unilateral
resiliation of the contract of employment. From this perspective, an employer
who lays an employee off is in breach of its obligation under art. 2087
C.C.Q. to provide work and allow it to be performed. Under art. 1605
C.C.Q., the employee is justified in considering the contract of employment to
have been terminated and may claim the compensation to which he or she is
entitled under art. 2091 C.C.Q. (See Bich, “Contracts of Employment”, supra,
at pp. 8‑9; see also Gagnon, supra, at pp. 96-97.)
49
However, decisions dealing with this question by the courts of original
general jurisdiction are rare in Quebec labour law. At most, there are only a
few judgments that are wholly or partially on point. Unfortunately, they are
not always easy to reconcile.
50
In support of its position, the appellant cited Laurier Auto Inc. v.
Paquet, [1987] R.J.Q. 804, at p. 805, in which the Court of
Appeal found that the employment relationship had not been terminated by the
nine‑month layoff of a management employee, but that the employment
relationship had merely been suspended. The court noted that in that case, the
layoff was [translation] “part of
a plan to rescue the business”.
51
The respondent relied on Thomas v. Surveyer, Nenniger & Chênevert
Inc. (1989), 34 Q.A.C. 61, in which the Court of Appeal held that
an employer was not entitled to temporarily suspend the effect of a contract
absent either a contractual stipulation to that effect or the employee’s
consent. The Court of Appeal concluded that the layoff of an employee constituted
a unilateral resiliation of the contract of employment, or a dismissal without
notice.
52
These contradictory decisions are relevant only in so far as they relate
to cases in which the employer has suspended the performance of the correlative
obligations, but had no intention of terminating the employment relationship.
On the other hand, they are of little assistance to us in understanding the
basis for an employer’s power to suspend an employee and the manner in which
that power is to be exercised in a case like the one before us. The decisions
in question deal with the power to lay an employee off because of financial
constraints on the employer — that is, because of factors that are
completely extrinsic to the employee’s conduct. Here, the connection between
the nature of the acts of which the employee was accused and the importance of
his duties is the determining factor. Other judgments raised by the parties
were rendered in the very different context of legal relations governed by a
collective agreement.
53
Thus, in support of its argument, the appellant cited Syndicat du
personnel de soutien du Cégep François‑Xavier Garneau v. Cégep François‑Xavier
Garneau, [2003] Q.J. No. 3580 (QL), in which the Court of Appeal
summarily recognized the power of an employer to suspend a unionized employee
without pay for administrative reasons. The respondent relied on Centre
d’adaptation jeunesse inc. v. Syndicat canadien de la fonction publique
(1986), 5 Q.A.C. 241, in which the employer had suspended the
complainant, an educator of mentally disabled patients, on learning that he had
been charged with committing an indecent act, and then reinstated him when he
was acquitted. The arbitrator decided that the suspension was not justified
and that after being reinstated the complainant was entitled to payment of his
lost wages and benefits. The Court of Appeal refused to set aside the award.
Rothman J.A. expressly acknowledged, at paras. 15 et seq. of
his opinion, that the employee had retained the right to receive his salary:
While the offense charged did not relate to any of
the patients of the Centre it was alleged to have occurred in the vicinity of
the Centre. The nature of the institution and its patients as well as the
nature of Poulin’s functions would have made it exceedingly difficult, if not
impossible, for him to continue to perform his duties until the charge was
disposed of. Once that was done and Poulin was acquitted, he was called back
to work immediately.
In my opinion, there was nothing arbitrary or
unjustified about the suspension.
. . .
But even if the arbitrator was wrong in his view
that appellant should have investigated the charges further prior to suspending
Poulin, I do not believe that error would permit the Court to intervene in his
decision. It was, of course, within the arbitrator’s jurisdiction to decide whether
or not the suspension was unjustified and, if he erred in that decision, the
error was not a jurisdictional error.
. . .
The critical issue before the arbitrator was not
whether the suspension was justified but whether Poulin was entitled to receive
his salary and other benefits for the period of the suspension. Even if the
suspension was justified when it was made, the arbitrator nonetheless had
jurisdiction to decide whether or not Poulin was entitled to his salary during
the suspension once he was acquitted.
. . .
. . . Clearly, the only reason for the
suspension was the criminal charge. Once Poulin was acquitted and he was
reinstated, someone had to assume the loss for the salary that had not been
paid to him. Was it to be Poulin who was found not guilty of the charge or the
employer who, in good faith, had suspended him? The arbitrator decided it
should be the employer. In my opinion, that decision was his to make and I do
not believe that the decision he made was unreasonable.
(6) Basis for, Nature of and Limits on the
Administrative Suspension Power: the Business’s Interest
54
Identifying the bases and the nature of a power to suspend an employee
for administrative reasons pursuant to an individual contract of employment
poses significant conceptual problems. As mentioned above, the Civil Code
of Québec does not expressly provide for such a power. In our view, the
solution can be found by reviewing the contract of employment, on the one hand,
and the nature and purpose of the employer’s intervention in the performance of
the work provided for in the agreement, on the other. Thus, it is first
necessary to return to an analysis of the distinctive elements that make up a
contract of employment.
55
The forms of contracts of employment and methods of performance of the
obligations for which they provide have without question evolved substantially.
However, the definition in the Civil Code of Québec has remained
faithful to a classical conception of this type of contract. This conception
is based on the acceptance of a relationship of subordination in which the
employee accepts the employer’s direction and control in performing the duties
provided for in the contract. The existence and acceptance of this
relationship mean that the employee recognizes that he or she is an integral
part of a whole, namely the business run by the employer, and that the employee
accepts the employer’s power of decision and the need for his or her work to be
consistent with the purpose of this whole. The acceptance of this power is an
implied condition of the function of the contract of employment that therefore
becomes a part of the contract’s content. The creation of the relationship of
subordination signifies that the employee agrees both that the employer must
make necessary decisions in the business’s interest and that his or her own
work must be performed in a manner consistent with those decisions and with the
guidance they provide, subject to any express or implied agreements between the
parties.
56
This power of direction is not equivalent to the power to resiliate or
amend a contract of employment. Rather, the power of resiliation or amendment
falls within the scope of the power of direction. Thus, it must be determined
whether the existence of a power to suspend for administrative reasons that
would authorize the employer to prevent the employee from performing his or her
work can be inferred from the power of direction that flows from the
relationship of subordination. Although this decision leaves the framework of
the contract of employment and the other obligations resulting therefrom
intact, it relates to the performance of the function of direction of the
business and draws its justification from the need to protect the business’s
interest. If the performance of the work should in itself compromise that
interest, the power of suspension would seem to be a necessary component of the
power of direction the employee has accepted. It therefore enables the
employer to decide not to have the work performed.
57
In the case of a business such as Industrial, the continuing performance
of sensitive duties involving relations with clients and the public justified
such a measure after the criminal proceedings were brought against the
respondent. This suspension remained administrative in nature, although the
circumstances of this case show that the distinction between a disciplinary
suspension and an administrative suspension can itself occasionally pose
difficult problems. Some suspensions occur in situations that may be given
different and successive legal characterizations depending on the stage they
are at. However, that is not the case here, as the suspension remained
administrative in nature to the very end due to the conduct and decisions of
the parties.
58
The employer must be given all the powers it needs to manage its business
properly and protect the interests of the business, subject to the limits
imposed by law. It is logical that this should be the situation in the case at
bar. This discretion is part of the latitude the employer has in managing its
business. This interpretation is not inconsistent with the Civil Code;
rather, it draws certain inferences therefrom that are consistent with the
nature and the fundamental structures of the institution concerned. As
Professor P.‑A. Côté observed in The Interpretation of
Legislation in Canada (3rd ed. 2000), at
p. 405: “If a strict interpretation was to be afforded [the
articles of the Civil Code], situations which are not expressly foreseen
might fall into the proverbial ‘judicial void’.”
59
It should be noted that the employer’s right to terminate a contract
under art. 2094 C.C.Q. does not include the power to suspend a
contract of employment. Article 2094 C.C.Q. allows an employer to
resiliate a contract of employment unilaterally and without prior notice for a
serious reason. It is doubtful that a desire to protect the image of the
service offered to customers and the reputation of the company could, without
further cause, constitute a serious reason within the meaning of
art. 2094. As Gagnon, supra, observed at p. 120: [translation] “. . . the
meaning to be given to the expression ‘serious reason’ is a serious fault
committed by the employee, or a good and sufficient reason that relates to the
employee’s conduct or failure to perform the work”.
60
However, it would seem to be appropriate to note that, as a rule, the
power to suspend for administrative reasons does not entail, as a
corollary, the right to suspend the payment of salary. The employer cannot
unilaterally, and without further cause, avoid the obligation to pay the
employee’s salary if it denies the employee an opportunity to perform the work.
61
The employer may always waive its right to performance of the employee’s
work, but it cannot avoid its obligation to pay the salary if the employee is
available to perform the work but is denied the opportunity to perform it. By
choosing not to terminate the contract of employment, with its associated
compensation, the employer will, as a rule, still be required to honour its own
reciprocal obligations even if it does not require that the employee perform
the work.
62
This residual power to suspend for administrative reasons because of
acts of which the employee has been accused is an integral part of any contract
of employment, but it is limited and must be exercised in accordance with the
following requirements: (1) the action taken must be necessary
to protect legitimate business interests; (2) the employer must be guided
by good faith and the duty to act fairly in deciding to impose an
administrative suspension; (3) the temporary interruption of the employee’s
performance of the work must be imposed for a relatively short period that is
or can be fixed, or else it would be little different from a resiliation or
dismissal pure and simple; and (4) the suspension must, other than in
exceptional circumstances that do not apply here, be with pay.
63
What must be done here is basically to balance the various interests in
play. On the one hand, the employer’s right to take preventive action to
protect its business must be recognized. On the other hand, it must be
recognized that “[a] person’s employment is an essential component of his or
her sense of identity, self‑worth and emotional well‑being”: see
Reference re Public Service Employee Relations Act (Alta.), [1987]
1 S.C.R. 313, at p. 368; see also Wallace v. United Grain
Growers Ltd., [1997] 3 S.C.R. 701, at para. 93.
64
There are factors that have been developed in the decisions of labour
arbitrators that can guide the courts in determining whether an employer was
justified in deciding to temporarily suspend an employee against whom criminal
charges had been laid. The tests essentially relate to legitimate business
interests and the employer’s good faith.
65
For example, the courts may consider the following
factors: whether there is a sufficient connection between the act
with which the employee is charged and the kind of employment the employee
holds; the actual nature of the charges; whether there are reasonable grounds
for believing that maintaining the employment relationship, even temporarily,
would be prejudicial to the business or to the employer’s reputation; and
whether there are immediate and significant adverse effects that cannot
practically be counteracted by other measures (such as assigning the employee
to another position). It might also be determined whether the purpose of the
suspension was to protect the image of the service that the employer is
responsible for managing, taking the following factors, inter alia, into
account: harm to the employer’s reputation, the need to protect the
public, the employer’s motives and conduct during the term of the suspension,
whether the employer acted in good faith, and absence of intent to harass or
discriminate against the employee.
66
Although it was rendered in a collective labour relations context, the arbitration
award in Sûreté du Québec et Association des policiers provinciaux du Québec,
[1991] T.A. 666, at p. 670, provides a very useful summary of the
rules that are applied by arbitrators in determining whether the administrative
suspension of an employee charged with a criminal offence is legitimate. In
that case, arbitration tribunal chairperson Frumkin quoted comments made in Fraternité
des policiers de la Communauté urbaine de Montréal et Communauté urbaine de
Montréal, [1984] T.A. 668, at p. 671, by an arbitrator who,
citing D. J. M. Brown and D. M. Beatty, Canadian
Labour Arbitration (2nd ed. 1984), had stated the following:
[translation]
. . . in assessing the appropriateness of a suspension pending trial,
rather than inquiring into the guilt or innocence of the accused employee,
arbitrators will attempt to determine whether the effects of the alleged
offence on the employment relationship are such that continuation of the
employment pending the decisions of the competent authorities would create
sufficient serious and immediate risk, contrary to the employer’s legitimate
interests, which encompass the employer’s financial integrity, the safety and
security of its property and of the other employees, and its reputation. In
weighing these various interests, some arbitrators have concluded that it must
be shown that the continuing presence of the employee at work would present a
serious and immediate risk to the legitimate business of the employer,
. . . and that [the employer] has taken the necessary measures to
determine whether the risk of continuing the employment could be reduced by
enhanced supervision of the employee, or by assigning the employee to another
position.
67
The employer has the burden of showing that a decision that has a
fundamental impact on the performance of the obligations set out in the
contract of employment is fair and reasonable. As well, to determine whether a
suspension was reasonable in a particular case, it must be considered from the
perspective of the point in time when the decision was made, even if the
employee was subsequently acquitted. (See C.U.M. et Fraternité des
policiers de la C.U.M., D.T.E. 86T‑312 (T.A.).) Facts
subsequent to the employer’s decision may be admissible in evidence, however,
if they are relevant and if they can be used to determine whether the
employer’s decision was justified at the time it was made. (See Cie
minière Québec Cartier v. Québec (Grievances arbitrator), [1995] 2 S.C.R. 1095.)
68
It should be noted that preventive action taken by an employer in good
faith to protect its reputation, its customers or the image of the service it
manages or the product it sells does not jeopardize the presumption of
innocence in favour of an employee against whom criminal charges have been
laid. Nor will an employer generally have to make its own inquiries, either of
the employee or of the competent public authorities, to ensure that the charges
are well founded. However, it has an obligation to allow the employee to
explain the situation if the employee wishes to make representations and
provide his or her version of the facts.
C. The Problem of the Suspension Without Pay
69
A few remarks are in order concerning the employer’s obligation to pay
the employee’s salary during the suspension. Since we have concluded that, in
the context of individual employment relationships governed by a civil
contract, an administrative suspension will generally be with pay, it is of
little relevance that arbitration awards made in the collective labour
relations context, in interpreting collective agreements that varied widely in
content, recognized the right to impose an administrative suspension without
pay in a variety of circumstances. (See Association des pompiers de
Sherbrooke et Ville de Sherbrooke, [1989] T.A. 211; C.U.M. et
Fraternité des policiers de la C.U.M., supra; see also Re United
Automobile Workers, Local 127 and Eaton Springs Canada Ltd.
(1969), 21 L.A.C. 50; Re United Steelworkers, Local 3129
& Moffats Ltd. (1956), 6 L.A.C. 327.)
70
Moreover, in Sûreté du Québec, supra, at p. 672,
arbitration tribunal chairperson Frumkin stated that the power to suspend an
employee without pay is exceptional owing to the significant harm the
suspension would cause the employee. As well, again in a collective labour
relations context, a number of arbitrators have ordered that employees
suspended without pay who were subsequently reinstated be paid their salaries
in whole or in part. (See Pharand et Gatineau (Ville de),
D.T.E. 2003T‑943 (C.R.T.); Deux‑Montagnes (Ville de) et
Fraternité des policiers de Deux‑Montagnes/Sainte‑Marthe‑sur‑le-Lac,
[2002] R.J.D.T. 1683 (T.A.); see also Re James Bay Lodge and
Construction & General Workers’ Union, Local 602 (1993),
33 L.A.C. (4th) 23; Re Kimberly-Clark of Canada Ltd. and Canadian
Paperworkers’ Union, Local 307 (1981), 30 L.A.C. (2d) 316.)
71
Thus, it is our view that in such situations there is an implied
condition that the legal situation between the parties be restored after the
cause of non-performance of the employee’s duties has ceased to exist. If the
cause of non-performance has come to an end, the prior situation must be
restored. Even if an employee is suspended with pay, it may be that the
suspension will ultimately be treated as a unilateral resiliation of the
contract if the end result is not the reinstatement of the employee. Also, the
initial suspension could turn into a constructive dismissal or be regarded as
one because of its length or because of an indefinite or excessive extension.
The courts would then have to review the situation, having regard to the legal
principles that apply to dismissal and to the unilateral resiliation of a
contract of employment.
72
Finally, we are of the opinion that an employee on whom an
administrative suspension without pay — to which the employee has not
consented — is imposed might, as a rule, properly regard that measure
as a constructive dismissal. In such a case, the employer is in breach of its
obligations under art. 2087 C.C.Q. to provide work and to pay the
employee. Under art. 1605 C.C.Q., the employee will then be able to
bring an action for damages for breach of contract based on art. 2091 and
the principles that are applicable to such cases, to claim the equivalent of
the severance pay to which he or she was entitled. (See Columbia
Builders Supplies Co. v. Bartlett, [1967] B.R. 111, at pp. 119‑20;
Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986; Wallace,
supra.)
D. Malleability of the Contract of Employment —
Restructuring of Contracts
73
The flexibility and malleability of an individual contract of employment
as an instrument for circumscribing the employment relationship enable the
parties to agree to, and provide for the manner of exercise and performance of,
such additional rights and obligations as they choose, subject to public order
and the mandatory provisions of the law. The employer is free to provide in
the contract that it has the power to suspend, and to establish the conditions
on which it may do so within the bounds of the reasonable exercise of its
rights. However, that power will be interpreted strictly against the employer
if, in the circumstances, the contract is a contract of adhesion.
(See arts. 1379, 1432, 1435, 1436 and 1437 C.C.Q.)
74
In some cases, the possibility of a future interruption in the
contractual relationship may be implied at the time the contract is entered
into, owing to the very nature of the work to be performed. In some fields of
work, it is common practice to interrupt the performance of the reciprocal
obligations temporarily where the work is intermittent or seasonal in nature.
This practice is recognized implicitly in the third paragraph of s. 82
A.L.S. (See also Internote Canada Inc. v. Commission des normes du
travail, [1989] R.J.Q. 2097 (C.A.).) As both parties know in advance
that the contract will be interrupted, this is an implied term of the contract
of employment pursuant to art. 1434 C.C.Q.
75
The parties may thus alter their rights and obligations during the term
of the contract and make consensual changes to the content of the contract of
employment. One possible scenario would be where the contract of employment is
silent as to the employer’s power to suspend the employee. If the employer
wants to suspend an employee temporarily without pay in order to investigate
acts of which the employee is accused, whether they involve criminal charges or
allegations made by customers or other employees, the employee would be free to
agree to the employer’s initiative on the proposed terms in light of the
specific circumstances. Thus, he or she may want to retain the possibility of
being called back to work, and the benefits that have been accumulated. However,
the employee would also be free to refuse the measure, and a refusal would not
constitute a resignation. The employee may then choose to demand that the
employer comply with the principles that apply to the unilateral resiliation of
a contract of employment.
E. Application
of the Principles to the Case at Bar
76
The issue here is whether the suspension of the respondent without pay
for two years was justified in the circumstances. Applying the principles we
have set out, it is our view that the suspension imposed by the appellant was
justified, having regard to the facts of the case. On the other hand, we are
of the opinion that the appellant cannot justify its failure to pay the
respondent during the suspension.
77
As we have pointed out, the decision to suspend the respondent was made
to protect the business’s interests. Keeping the respondent in his position
could have seriously harmed the appellant’s image and reputation in light of
the position’s importance within the business. The respondent was in direct
and regular contact with the business’s customers. Plainly, the respondent’s
personal reputation was an important component of the appellant’s reputation
and a factor in the quality of the service provided to customers. In light of
the nature of the offence with which the respondent was charged and the high
level of responsibility associated with his position, the action taken was
necessary, in the circumstances, to protect the image of the service provided
by the appellant and to protect the business’s customers. The appellant’s
reputation and the integrity of its relationship with its customers were at
stake. Finally, the appellant proved that it could not have assigned the
respondent to another position pending the outcome of the criminal
proceedings. No other temporary measure was possible in the circumstances.
78
In general, the appellant conducted itself properly. However, while it
had no obligation to investigate or to make inquiries of the Crown as to
whether the charges against the respondent were well founded, it would have
been preferable for the appellant to give the respondent an opportunity to
provide it with his version of the facts.
79
This having been said, the withholding of pay poses a different
problem. In the instant case, in the context of a suspension that at all times
remained administrative in nature, there was no reason to refuse to pay the
salary of an employee who remained available to work. It was not open to the
appellant to unilaterally impose a temporary cessation of performance of the
correlative obligations while requiring that the employee continue to be
available. The respondent was not required to endure the suspension, imposed
on him by the appellant, of the performance of his work and also be denied the
consideration for that work, namely his salary. This conclusion, which, as we
have seen, is entirely consistent with the majority of the decisions of
specialized labour law tribunals involving the application of collective
agreements, is based on the nature of the reciprocal obligations created by an
individual contract of employment governed by the Civil Code.
80
This is a situation that could have been regarded as a case of
constructive dismissal, but it was treated by both parties as a suspension.
The respondent could not have validly regarded his suspension as a dismissal,
given that he has in fact gone back to work for the employer.
VI. Conclusion
81
For these reasons, we would dismiss the appeal with costs.
APPENDIX
Legislative
Context
Civil Code
of Québec, S.Q. 1991, c. 64
1605. A contract may be resolved or
resiliated without judicial proceedings where the debtor is in default by
operation of law or where he has failed to perform his obligation within the
time allowed in the writing putting him in default.
2085. A contract of employment is a contract
by which a person, the employee, undertakes for a limited period to do work for
remuneration, according to the instructions and under the direction or control
of another person, the employer.
2087. The employer is bound not only to
allow the performance of the work agreed upon and to pay the remuneration
fixed, but also to take any measures consistent with the nature of the work to
protect the health, safety and dignity of the employee.
2088. The employee is bound not only to
carry on his work with prudence and diligence, but also to act faithfully and
honestly and not to use any confidential information he may obtain in carrying
on or in the course of his work.
These obligations continue for a reasonable time
after cessation of the contract, and permanently where the information concerns
the reputation and private life of another person.
2091. Either party to a contract with an
indeterminate term may terminate it by giving notice of termination to the
other party.
The notice of termination shall be given in
reasonable time, taking into account, in particular, the nature of the
employment, the special circumstances in which it is carried on and the
duration of the period of work.
2092. The employee may not renounce his
right to obtain compensation for any injury he suffers where insufficient
notice of termination is given or where the manner of resiliation is abusive.
2094. One of the parties may, for a serious
reason, unilaterally resiliate the contract of employment without prior notice.
Act
respecting labour standards, R.S.Q., c. N-1.1
79.4. At the end of the absence owing to
sickness or accident, the employer shall reinstate the employee in the
employee’s former position with the same benefits, including the wages to which
the employee would have been entitled had the employee remained at work. If
the position held by the employee no longer exists when the employee returns to
work, the employer shall recognize all the rights and privileges to which the
employee would have been entitled if the employee had been at work at the time
the position ceased to exist.
Nothing in the first paragraph shall prevent an
employer from dismissing, suspending or transferring an employee if, in the
circumstances, the consequences of the sickness or accident or the repetitive
nature of the absences constitute good and sufficient cause.
82. The employer must give written notice
to an employee before terminating his contract of employment or laying him off
for six months or more.
The notice shall be of one week if the employee is
credited with less than one year of uninterrupted service, two weeks if he is
credited with one year to five years of uninterrupted service, four weeks if he
is credited with five years to ten years of uninterrupted service and eight
weeks if he is credited with ten years or more of uninterrupted service.
A notice of termination of employment given to an
employee during the period when he is laid off is absolutely null, except in
the case of employment that usually lasts for not more than six months each
year due to the influence of the seasons.
This section does not deprive an employee of a
right granted to him under another Act.
83. An employer who does not give the
notice prescribed by section 82, or who gives insufficient notice, must
pay the employee a compensatory indemnity equal to his regular wage excluding
overtime for a period equal to the period or remaining period of notice to
which he was entitled.
The indemnity must be paid at the time the
employment is terminated or at the time the employee is laid off for a period expected
to last more than six months, or at the end of a period of six months after a
layoff of indeterminate length, or a layoff expected to last less than six
months but which exceeds that period.
The indemnity to be paid to an employee remunerated
in whole or in part by commission is established from the average of his weekly
wage, calculated from the complete periods of pay in the three months preceding
the termination of his employment or his layoff.
122. No employer or his agent may dismiss,
suspend or transfer an employee, practise discrimination or take reprisals
against him, or impose any other sanction upon him
(1) on the ground that such employee has exercised
one of his rights, other than the right contemplated in section 84.1,
under this Act or a regulation;
(1.1) on the ground that an inquiry is being
conducted by the Commission in an establishment of the employer;
(2) on the ground that such employee has given
information to the Commission or one of its representatives on the application
of the labour standards or that he has given evidence in a proceeding related
thereto;
(3) on the ground that a seizure by garnishment has
been or may be effected against such employee;
(3.1) on the ground that such employee is a debtor
of support subject to the Act to facilitate the payment of support
(chapter P‑2.2);
(4) on the ground that such employee is pregnant;
(5) for the purpose of evading the application of
this Act or a regulation;
(6) on the ground that the employee has refused to
work beyond his regular hours of work because his presence was required to
fulfil obligations relating to the care, health or education of the employee’s
child or the child of the employee’s spouse, or because of the state of health
of the employee’s spouse, father, mother, brother, sister or one of the
employee’s grandparents, even though he had taken the reasonable steps within
his power to assume those obligations otherwise.
An employer must of his own initiative transfer a
pregnant employee if her conditions of employment are physically dangerous to
her or her unborn child. The employee may refuse the transfer by presenting a
medical certificate attesting that her conditions of employment are not dangerous
as alleged.
123. An employee who believes he has been
the victim of a practice prohibited by section 122 and who wishes to
assert his rights must do so before the Commission des normes du travail within
45 days of the occurrence of the practice complained of.
If the complaint is filed within that time to the
Commission des relations du travail, failure to file the complaint with the
Commission des normes du travail cannot be invoked against the complainant.
Appeal dismissed with costs.
Solicitors for the appellant: Beauvais Truchon &
Associés, Québec.
Solicitors for the respondent: Madar Benabou Malamud
& Levy, Montréal.
Arbour J. participated in the judgment of March 19, 2004 but took no
part in these reasons for judgment.