In a recent decision, the Ontario Superior Court ruled that an employer had wrongfully dismissed a 65 year old manager of a used car company. The company accused the employer of being
intoxicated at work on several occasions. The court did not believe that allegation and found no just cause for dismissal. The employee had just under 2 years’ service. The Court awarded 5 month’s reasonable notice.
The case is called Volchoff v. Wright Auto Sales Inc.
Most of the decision is unremarkable, but there is one curious remark of interest late in the ruling worth noting.
Quick Summary of the Case
The Court finds the accusations that the employee was drunk at work or had driven cars intoxicated to be vague and unsubstantiated. The employee admitted to occasionally having a glass of wine at lunch at a local restaurant, but the court accepted that he didn’t drink at work and did not come to work intoxicated. The employee had never been told that he was not permitted to have a glass of wine when out of lunch. The employer tried to argue that it was an implied term of the contract that the employee not consumer alcohol during working hours, even during an off-premises lunch break. However, the judge rejects that argument:
I am not satisfied that the zero-tolerance policy of the Defendant, whatever it was, was a term of the employment contract between the Plaintiff and the Defendant when he was first hired or, because of the lack of consideration, became one after he was hired. Wiebe v. Central Transport Refrigeration (MAN) Ltd.  M.J. No. 27 (C.A.).
Since drinking a glass of wine at lunch did not violate a term of the contract, and the court found no evidence that the employee had ever acted improperly at work due to intoxication, there could be no grounds for termination for cause, as the judge summarizes in this passage:
 The evidence in fact confirms that the Plaintiff, even if he had consumed some alcohol on Wednesdays, properly carried out his job functions. The allegation of his being rude to a customer was not substantiated and in any event the Defendant’s business was thriving including that of the individual salesmen. There was no suggestion that the Defendant’s business interests were being affected by Volchoff’s consumption of alcohol.
The Court suggests that other employees may have been accusing the plaintiff of misconduct because they were angry about a policy he had introduced. In the absence of any finding of misconduct, the case turned into a straightforward assessment of notice applying the Bardal factors (see Chapter 13 of The Law of Work).
However, just before turning to the issue of the length of appropriate notice, the judge makes an obiter comment (a comment not necessary to the actual judgment) that is a possible eyebrow raiser. Read this:
 [The employee] was placed on a suspension with pay for one week pending investigation of his conduct. An imposition of continued discipline including a further suspension, with or without pay, for a reasonable period of time, including a specific warning that any further violation would result in his termination, would have been appropriate to bring home to Mr. Volchoff his employer’s serious concerns, if it had them, with his conduct and make him realize his job was now in jeopardy if he continued. Progressive discipline, short of termination of employment, was clearly more appropriate in this case.
Curious. If the employee had done nothing wrong, as the court finds, on what contractual basis could the employer have issued a ‘disciplinary suspension’? And, in particular, surely the employer could not have issued a suspension “without pay”, as the court proposes. The Court does not refer to any expressed or implied contractual right to suspend without pay in the plaintiff’s contract. The law in Ontario is clear: absent such a contractual right, a suspension without pay is a fundamental breach of the contract that the employee can treat as a constructive dismissal (see discussion on pages 193-194 of the Constructive Dismissal Chapter 15 in the Law of Work, and Carscallen v. FRI Corp).
Carscallen (confirmed on appeal) tells us that, in the absence of a contractual right to suspend without pay, an employer can only do so if the employee’s misconduct was sufficiently serious that the employer could have opted to terminate the employee without notice for cause. An employer may be able to choose the lesser penalty of suspension in that case. However, in this case the court ruled that the employer did NOT have cause to dismiss the employee. Therefore, had it suspended the employee without pay, as the court recommends, it would have been constructively dismissing him and we may have ended up in the same situation–a damage award of 5 month’s notice.
Is that your reading of this obiter comment?
Issues for Discussion
If the employer wanted a right to suspend employees, with or without pay, for consuming alcohol at work or during the work day (even at a restaurant during lunch break), how might the employer have gone about ensuring it had such a legal right?
Do you think courts should ‘imply’ a contractual right for employers to suspend employees without pay as a form of progressive discipline?
Cross Reference to Law of Work Book
Chapter 13 deals with termination without cause and the implied contract term requiring “reasonable notice” of termination.
Chapter 14 deals with Summary Dismissal and the right of employers to terminate employees without notice when the employee has engaged in serious wrongful conduct.
Chapter 15 deals with constructive dismissal, including an unpaid suspension as a form of discipline.