An Ontario Court has ruled in Bevilacqua v Gracious Living
Corporation, 2016 ONSC 4127 that even in cases where an
employer has complied with the temporary layoff provisions of the
Employment Standards Act, 2000 (the
"Act"), the layoff does not protect the employer
from a successful claim in constructive dismissal by the employee
at common law. In the case, a 15 year Facilities Manager was told
by his employer that he was being temporarily laid off and that he
would be recalled in three months. His company benefits were
continued during the layoff period. While the layoff was done in
accordance with the Act, the employee immediately took the
position that he had been effectively terminated when he was placed
on layoff. The Court agreed with the employee, and held that absent
a provision in the employee's employment contract allowing for
a temporary layoff, a unilateral layoff constituted a constructive
dismissal, regardless of whether it was done in compliance with the
Act. The employee in the case, who was unemployed for 15
months after he was placed on layoff, was less successful with the
remedy that the Court ordered. The employee was entitled to be paid
for the three months he was on layoff, but the Court found that he
had failed to mitigate his damages when he declined the
employer's offer to return to his old job after the layoff
period was over.
Employers who wish to place employees on unpaid layoff should
use this case as a reminder to update their employment agreements
to provide for the right to unilaterally impose temporary layoffs
in accordance with the Employment Standards Act, 2000
without further notice or compensation.
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