No Right Of Lay Off At Common Law

March 20, 2012

By Brad Smith

The Ontario Court of Appeal confirmed that a deemed termination under the Employment Standards Act is a termination at common law.

In Elsegood v. Cambridge Spring Service dated December 23, 2011, the Court was asked to determine if an employee could recover damages for wrongful dismissal after he was on lay off for 35 weeks in 52 weeks. The Court of Appeal concluded the employee was terminated for two reasons. First, the Employment Standards Act replaces the common law. Thus, a deemed termination under the Employment Standards Act is a termination at common law.

Second, the Court of Appeal re-affirmed the principle that at common law, there is no right of lay off. In the absence of a contractual right of lay off, a lay off is a constructive dismissal.

If an employer wants the right of lay off, it must contract for the right with an employee. Further, contract of employment must be consistent with the Employment Standards Act.

See also our article on the Ontario Superior Court of Justice decision in McLean v. The Raywal Limited Partnership that also stated there is no right of lay off at common law.