The Small Claims Court recently released a decision in the case of Wiens v. Davert Tools Inc., a constructive dismissal case.
While there are issues of inappropriate treatment of the plaintiff, the case largely deals with the issue of 'temporary layoffs': The question of whether or not a temporary layoff, in the absence of an express or implied contractual term authorizing such, constitutes a constructive dismissal.
By way of background, let me say that the answer used to be clear: A categorical yes, affirmed by the Court of Appeal on numerous occasions. However, last year, Justice Moore released a decision in Trites v. Renin Corp stating that "there is no room remaining at law for a common law claim for a finding of constructive dismissal in circumstances where a temporary layoff has been rolled out in accordance with the terms of the ESA". For simplicity, let's call that the "Trites proposition".
The employment law bar did a collective double-take at the Trites proposition. Half of us said "This is a big change in the law." The other half of us said "This is wrong." I argued in this blog at the time that the Trites proposition would not be largely followed, and would not be upheld by the higher courts. Firstly, I argued, the Trites proposition was obiter. Secondly, it was highly inconsistent (and seemingly obliviously so) with well-established case law. Thirdly, it was wrong, on a close reading of the Employment Standards Act, 2000.
To the best of my knowledge, Trites has not been appealed. (I did hear from Ms. Trites' counsel, shortly after the decision, that the employer was considering an appeal...but Ms. Trites had no reason to appeal absent an employer appeal: Justice Moore proceeded to conclude that the layoff had not been ESA-compliant, and accordingly Ms. Trites was constructively dismissed, and obtained judgment.)
Wiens is the first reported decision, to my knowledge, which considers the impact of Trites. And Deputy Judge Hagan rejected the Trites proposition: "The plaintiff argues that this statement of Justice Moore is obiter and the existing case law. [sic] In my view the statement is obiter and not consistent with the higher courts."
(Presumably, the first sentence there omitted words to the effect of "not consistent with". A shame - makes it slightly less quotable.)
It's interesting and unusual for the Small Claims Court to disregard a Superior Court decision: The doctrine of stare decisis usually binds the Small Claims Court to follow decisions of higher courts. However, where there are conflicting decisions of higher courts...well, there's a debate as to whether or not the judge may pick whichever seems best, or must follow the most recent one. (There is, fittingly, conflicting authority on the point.) Moreover, obiter is never binding. So while the argument that the Trites proposition was obiter wouldn't be important at the Superior Court level, it gives the Small Claims Court the unfettered discretion to evaluate the merits of the Trites proposition.
Naturally, Wiens isn't binding on anyone - it's a Small Claims Court decision, and is at best persuasive.
Indeed, Wiens too may arguably be obiter. Deputy Judge Hagan went on to find that there was an implied contractual term authorizing temporary layoffs - this is unusual, but basically turns on industry standards. (It's rooted in the "custom and usage" doctrine, though not so framed by the Deputy Judge.) However, on the facts, the Court concluded that the layoff was 'indefinite', and that the implied term authorizing temporary layoffs did not extend that far.
Nonetheless, it sends a clear message to employers, as I argued immediately following Trites, to approach that proposition with caution: Trites may not be the watershed moment that others argued it to be.
This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.
The author is a lawyer practicing in Newmarket, primarily in the areas of labour and employment law and civil litigation. If you need legal assistance, please contact him for information on available services and billing.