NBCA Deals With Allegation of Improper Layoff and Constructive Dismissal :

In Donovan v Richelieu Hardware (  2022 NBCA 45 ) the Plaintiff was first put on a temporary layoff and then 5 months later was terminated. The Plaintiff did not claim that the the first layoff was a constructive dismissal, but rather a simple breach of contract, and therefore claimed that he was entitled to both 5 months lost wages for the breach of contract and reasonable notice once his employment was terminated.

The trial judge rejected the Plaintiff’s argument and found that the Plaintiff had been constructively dismissed at the time of the original layoff, even though the Plaintiff did not plead this.

The CA agreed and said that when faced with the breach of contract the Plaintiff had only two choices, either accept the breach or claim that he had been constructively dismissed .

My Comments:

I have always understood that faced with a breach of contract, the innocent party had three choices:

1. Accept the breach and in essence agree that the agreement has been amended.

2. If it was a fundamental breach, treat the breach as ending the contract and sue for damages.

3. Simply suing for the loss but not terminating the contract.

From a policy point of view, the purpose of notice is to allow the Plaintiff to look for another job. But the essence of a temporary layoff is to say to the employee ” I do not have work for you now, but I will have work soon, so please do not start another job because I promise to recall you soon “.

If the temporarily laid off employee believes her employer, then she will not use that time to look for another job. Why then should this time count as notice of termination?

If you like a copy of this case, email me at barry@barryfisher.ca.

I always welcome your comments.

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