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Rajah Lehal

Elsegood v Cambridge Spring Service Ltd., 2011 ONCA

October 28, 2016

Discussion: The employee was found by the court to be terminated after 35 weeks of the layoff period had concluded. The employee successfully sued for six months notice of termination as a result of this “constructive dismissal”, with the date of termination deemed to be the first day of the lay-off period. Under s. 56(1) of the Employment Standards Act (ESA), an employer terminates an employee if the employer lays the employee off for 35 weeks in a period of 52 consecutive weeks. Termination under the ESA results in a termination under common law – the ESA and the common law co-exist. Furthermore, a term of an employment agreement that is inconsistent with the ESA is null and void for all purposes (Machtinger).

Therefore, even if the employment agreement contained an implied term allowing the employer to place the employee on indefinite layoff, it would be null and void since it fails to meet the ESA’s minimum standard. The employee is therefore permitted to claim constructive dismissal at common law whenever a layoff exceeds 35 weeks in 52. Background:

  • Under s. 56(1) of the Employment Standards Act (ESA), an employer terminates an employee if the employer lays the employee off for 35 weeks in a period of 52 consecutive weeks.
  • The plaintiff employee had worked for the employer for seven years and was laid off twice in 2009, the total of which surpassed the allowable limit under the ESA.
  • The plaintiff bought an action for common law damages for wrongful dismissal. The action was allowed. The defendant employer appealed arguing that the ESA and common law are separate legal regimes and a dismissed employee should not benefit from both. The employer also argues that the termination was “deemed” by the ESA and not brought about by the employer, which should preclude any common law entitlement. Lastly, the employer asserts that the unemployment agreement contained an implied term that allowed the employee to be placed on an indefinite layoff.

Issue:

  • Whether the operation of s. 56(1) of the Employment Standards Act can support an employee’s claim for common law damages.

Rule:

  • The ESA does not specifically deem a termination, but rather it deems the date of the termination.
  • Termination under the ESA results in a termination under common law – the ESA and the common law co-exist.
  • A term of an employment agreement that is inconsistent with the ESA is null and void for all purposes (Machtinger).

Analysis:

  • Even if the employment agreement contained an implied term allowing the employer to place the employee on indefinite layoff, it would be null and void since it fails to meet the ESA’s minimum standard. The employee is therefore permitted to claim constructive dismissal at common law whenever a layoff exceeds 35 weeks in 52.

Written by Rajah. Rajah Lehal is Founder and CEO of Clausehound.com. Rajah is a legal technologist and technology lawyer who is, together with the Clausehound team, capturing and sharing lawyer expertise, building deal negotiation libraries, teaching negotiation in classrooms, and automating negotiation with software.