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Mishandled Leaves Could Cost Employers: Insights of BC Decision
A recent case from the Supreme Court of British Columbia offers a powerful warning to employers across the country, including in Ontario: if you fail to follow your workplace policies when placing employees on leave, you could face a costly constructive dismissal claim.
In Day v. Tahltan Central Government, 2025 BCSC 1363, the court awarded over $320,000 in damages to an employee who was placed on paid administrative leave without proper adherence to the organization’s complaint-handling procedures. While the decision is from B.C., the principles are highly relevant for Ontario employers under the Employment Standards Act, 2000 (ESA) and Ontario case law on constructive dismissal.
What Happened in the Case?
The employee, an elected board president, was placed on administrative leave for four months while complaints against him were investigated. The employer had a policy manual outlining how such complaints should be addressed, but those steps weren’t followed.
The court found that bypassing the employer’s policy amounted to a substantial breach of the employment contract, leading to a finding of constructive dismissal. As a result, the employee was awarded over $320,000 in damages, including compensation in lieu of notice.
Why This Matters for Employers
While Ontario courts aren’t bound by B.C. decisions, they often consider them persuasive, especially when they reflect well-established employment law principles, such as:
- Employers must follow their workplace policies.
- Failure to do so may be considered a unilateral change to a fundamental term of the employment relationship.
- Long administrative leaves without proper justification or process can constitute constructive dismissal.
Ontario employers who implement administrative leaves, especially during workplace investigations, must do so with care and consistency.
As Christopher Achkar, employment lawyer and founder of Achkar Law, explains:
“If you place an employee on leave without proper justification or worse, without following your policy you could unintentionally trigger a constructive dismissal claim. That’s why legal advice and proactive HR planning are so important.”
The Danger of Over-drafted Administrative Leave Policies
One of the critical issues in this case was that the employer had created a multi-step policy that seemed fair and comprehensive, but failed to follow it.
Overly complex policies can become a liability when employers:
- Skip required steps due to urgency
- Deviate from the process due to administrative oversight
- Fail to properly communicate timelines or expectations to the employee
The Lesson?
The more layers you add to a policy, the more you must follow it exactly. Otherwise, courts may treat your failure to do so as a breach of contract.
The Risks of Prolonged Administrative Leaves
Another major factor in the court’s decision was the length of the four months leave with limited communication and no clarity on the next steps.
In Ontario, an administrative leave is:
- Unreasonably long
- Unjustified
- Poorly communicated
…could easily cross the line into constructive dismissal, especially if the employee is left in professional limbo.
Best practice: Keep administrative leaves as short as possible and regularly update the employee about the next steps.
How Employers Can Protect Themselves
To reduce the risk of constructive dismissal claims tied to administrative leave, employers should:
Review and Simplify Policies
Ensure administrative leave procedures are clear, concise, and actionable. Avoid policies that are too rigid or complex to follow under pressure.
Follow Procedures to the Letter
If your policy requires specific steps before leave is imposed, follow each step precisely. Document everything.
Consider Alternatives First
Before placing an employee on leave, consider other options, such as modified duties or remote work, especially if the employee’s presence won’t interfere with an ongoing investigation.
Seek Legal Advice Early
If no policy exists or the situation falls into a grey area, consult an employment lawyer before placing the employee on leave.
How Achkar Law Can Help
At Achkar Law, we advise employers across British Columbia and Ontario on how to implement lawful and effective HR practices. Our team helps businesses:
- Draft and review administrative leave and investigation policies
- Assess legal risks before placing an employee on leave
- Address workplace investigations and employee relations issues
- Defend against constructive dismissal claims
Whether you’re responding to a complaint or reviewing your internal policies, we can help you protect your business and ensure legal compliance.
Contact Achkar Law
Need advice before placing an employee on leave? We’re here to help.
The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Achkar Law Professional Corporation and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Achkar Law Professional Corporation. ©