Termination Triggered by Statute Results in Entitlement to Common Law Notice

Written by on March 8, 2012 in Blog, Wrongful Dismissal
Typewriten word Legislation

In Elsegood v. Cambridge Spring Service, 2001 Ltd. the Ontario Court of Appeal upheld the Ontario Small Claims Court’s decision that an employee who had been terminated in accordance with section 54 of the Employment Standards Act, 2000 (“Act”) due to being on a temporary lay off for more than 35 weeks in a 52 week period was entitled to common law notice and was not restricted to statutory notice only under the Act.

Background

The Employee, Mr. Elsegood, had been employed by the Employer, Cambridge Spring Service (2001) Ltd., for approximately seven years as a technician. In 2009, the Employee was put on temporary lay off from April 4, 2009 to June 9, 2009. Shortly after being recalled to work he was again put on a temporary lay off on July 28, 2009. He was not recalled to work for the remainder of 2009.

By January 22, 2010, the Employee had still not been recalled to work, resulting in the Employee being on a temporary lay off for more than 35 weeks within a 52 week period, being in contravention of section 56 of the Act. Pursuant to section 54 of the Act, the Employee took the position that he was effectively terminated and commenced an action seeking damages for common law notice.

Lower Court Decisions

Finding that the Employee was terminated in accordance with the Act, the Ontario Small Claims Court found that the Employee was entitled to common law notice in the amount of six months. The Employer appealed this decision to the Divisional Court, where the appeal was dismissed thereby upholding the Small Claims Court’s decision.

The Employer appealed the Divisional Court’s decision to the Ontario Court of Appeal on the premise that “the [Act] and the common law are independent regimes…On this premise, common law damages for wrongful dismissal are only available for what would constitute a dismissal at common law and are available for a ‘deemed termination’ under the [Act].”

Ontario Court of Appeal’s Decision

After reviewing the lower Courts’ decisions, as well as the relevant sections of the Act, the Court of Appeal dismissed the Employer’s appeal, finding that the Employee’s termination under the Act entitled him to common law notice.

In reaching this decision, the Court of Appeal stated that “s. 56(1) of the [Act] operates to terminate an employee’s employment in law, so that the employee may claim for common law wrongful dismissal damages”. The Court of Appeal continued by stating that “if one accepts the premise that an individual’s employment status continued at common law after a statutory termination under s. 56(1) of the [Act], the employee could claim constructive dismissal at common law whenever a layoff exceeds 35 weeks in 52.” The result, therefore being that an employee would be entitled to common law notice in any event.

Points of Interest

As indicated in previous blogs, it is important for both employers and employees to understand the various sections in the Act, their interaction with common law principles, and the ramifications of not following these sections of the Act, as demonstrated in the case above.

Arguably, if the Employer above was aware of the implications of implementing a temporary lay off of the Employee for more than 35 weeks within a 52 week period, the Employer may have been able to take proactive steps to prevent the termination under section 54 of the Act from occurring, thereby possibly eliminating any amount of notice, common law or statutory, owed to the Employee, as well as the legal fees associated in arguing and appealing the above case.

Minken Employment Lawyers is your source for expert advice and advocacy on today’s employment law issues.

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