Can an employer suspend you without pay? The answer is complicated.
In Ontario, the Employment Standards Act (ESA) doesn’t explicitly forbid or authorize unpaid suspensions. But that doesn’t mean employers have free rein. Courts have stepped in to define what’s acceptable, and the message is clear: unpaid suspensions are risky and often amount to constructive dismissal.
What the Law Says:
Unless your employment contract specifically allows unpaid suspensions, your employer likely has no legal right to impose one. Even with a clause in your contract permitting it, the employer must justify the suspension —especially its unpaid nature. Otherwise, it’s a breach of contract and could entitle you to damages.
Key Case Law:
1. Filice v. Complex Services Inc. (ONCA 2018)
Filice worked at a casino. His employer suspected misconduct and suspended him without pay while investigating. Even though the contract included a suspension clause, it didn’t say the suspension could be unpaid. And the employer couldn’t offer any solid reason for why Filice had to go without income.
The Ontario Court of Appeal ruled the unpaid suspension was a constructive dismissal. Filice didn’t quit, the employer, by acting unfairly, effectively ended the contract.
Lesson: Even if your employer thinks they’re covered by the contract, they have to justify their decision to withhold pay. Without justification, it’s a legal breach.
2. Potter v. New Brunswick Legal Aid (SCC 2015)
David Potter was the Executive Director of Legal Aid. One day, without warning, he was told not to come back to work. No explanation, no end date, no pay. Potter sued.
At the Supreme Court of Canada, the judges sided with him. They said that suspending someone indefinitely with no reason and no explanation is not only unfair — it’s a fundamental breach of the employment relationship.
They introduced a two-part test for constructive dismissal:
- Did the employer breach a key term of the contract?
- Would a reasonable person in the employee’s shoes think the employer no longer intended to be bound by the agreement?
In Potter’s case, the answer to both was yes. He was constructively dismissed.
Lesson: Employers need a legitimate business reason for suspensions, especially unpaid ones
3. Hookimawillile v. Payukotayno (ONSC 2019)
A social services worker was suspended without pay during a series of workplace investigations. Her employment contract and the company policies had no mention of unpaid suspensions. And she wasn’t given a timeline for when, or if, she’d return.
She took her employer to court, and the judge said this was a constructive dismissal.
The court applied the Potter test and found that suspending someone without pay, with no contractual basis, no notice, and no plan, was a fundamental breach of the employment relationship.
Lesson: Even in complicated situations like investigations, employers can’t improvise a punishment. If the contract doesn’t say “unpaid suspension,” it’s not allowed, unless they can justify it in truly exceptional circumstances.
Bottom Line: If you’re suspended without pay and your contract doesn’t authorize it — or the employer can’t justify it — you may have been constructively dismissed, and legal remedies could be available.
Need Help?
Give our office a call. The lawyers at De Bousquet PC are here to support Ontario workers. Whether you’re reviewing a contract or dealing with a workplace issue, we can help you understand your rights and your options.