An early decision, early as in 1996, the Prince Edward Island Supreme Court considered the right of the employer to effect a paid administrative leave. The court refused to find a constructive dismissal and upheld the employer’s action. ¹ At the time of suspension, MacKay was employed as a branch manager and had been employed for 20 years with Avco. The company had received a “litany of complaints” with respect to the plaintiff’s management style. MacKay was suspended with pay pending its investigation of issues at the branch on June 3. The suspension was stated to be for one week with full pay and benefits. The company also offered him the services of its employer assistance program.

Mackay took a medical leave on June 13. He sought a return to work by August 1. The company chose to defer the decision as to whether he may return to work in his former position until January 13 of the following year. In the interim, MacKay was requested to report to another office on a temporary assignment as Assistant Manager to the existing Branch Manager as of September 1, which was then revised to September 16. His position in his branch remained unfilled. MacKay refused the temporary assignment and sued.

The court refused to see any of these actions, individually or collectively, to be a constructive dismissal.

As to the issue reviewed presently, the court did not see the suspension letter, viewed in isolation, as  terminating the relationship as it had been effected in good faith, for legitimate business reasons, for a short term and with full compensation:

On consideration of the evidence, I have determined that Avco made its decision to suspend MacKay in good faith and based on information that was sound and sufficient in the circumstances. The Company acted only when it did because senior management was not previously aware of the problem.  The litany of employee complaints came as a surprise. For bona fide ² business reasons which embraced reasonable consideration of all employees including MacKay, the situation in the Branch required immediate action.  Cox was concerned that there be an immediate separation between Manager and staff since the employees had by then exposed their particular concerns and the issue was then wide open. In his assessment, which he made in consultation with his acting District Manager, who was experienced in human resources matters, the scenario of the employees in the Branch continuing to work under MacKay’s supervision was rendered untenable for the time being, and at least until the matter was explored and some form of action could be taken. When it was invoked, Cox did not characterize the one-week suspension as being either disciplinary or non-disciplinary.  It was short duration and without loss of pay or benefits.  It was designed to provide an opportunity to investigate, explore options, and respond.

The court noted that there may well be, on other facts, support for the proposition that such an administrative suspension ³ may be challenged, should such action be founded "without good reason, or for improper motivation", or where made in good faith, yet effected in a "cavalier manner or without due regard for the repercussions on the employee":

A suspension like the one in this case could amount to constructive dismissal.  If an employer acted without good reason, or for improper motivation, or even with good reason and in good faith but in a cavalier manner or without due regard for the repercussions on the employee, it could then be foreseeable that the employer act or omission could trigger most unfortunate consequences which  would render untenable continued performance by the employee. The employment relationship could then be viewed as having been fundamentally destroyed by the employer’s unilateral action.

These principles, as noted by a review of the following cases, remain in good stead today.