Legal Blog

Dismissal

In a non-unionised setting, any employer may dismiss an employee for any reason that does not run afoul of the Human Rights Code. The employer can always dismiss an employee for cause at law (e.g. theft, insubordination etc.). However, cause at law is usually quite limited. Normally, an employer seeks to terminate an employee for a business reason only (e.g. the employee is too slow, has a bad attitude, is not a team player etc.). There is only one real question to be settled after a dismissal for business reasons. What is the amount of notice that the employee ought to have received? As a corollary, what should employer pay if it did not give that notice?

Notice 

The Employment Standards Act specifies a minimum amount of notice. It is, in general, one week for every year of employment with a minimum of one week after three months of employment and a maximum of eight weeks after eight years of employment.

The common law is more generous. There are two types of contracts. There is a contact for a definite period (e.g. I am hiring you for 6 months). There is a contract for an indefinite period (e.g. I am hiring you and we are not going to put our minds to the length of the employment – it could be until you retire). As a very rough rule of thumb, for an indefinite period of hiring an employee is usually entitled to approximately one month of notice for every year of employment to a maximum, usually, of 24 months.

If an employer terminates an employee without the required notice, the employee normally receives, as damages, the wages or salary that the employee would have received during the notice period.

Construction 

Do the statutory and common law rules apply to construction labour? These questions were at issue in Scapillati v. A. Potvin Construction Ltd., a 1997 decision of the Ontario Court (General Division).

Laid-Off Indefinitely 

A general contractor employed the plaintiff as a carpenter, in essence over a 10 year period, under a contract for an indefinite period of hire. The carpenter was ultimately laid-off and was never recalled. The judge found that there was no cause at law for the termination.

The judge first noted that, by virtue of section 57(10) of the Employment Standards Act, the provisions of the Act dealing with notice do not apply to someone employed in construction.

However, since the provisions of the Act are only minimum requirements, the judge held that section 57 (10) do not affect the common law duty of notice and the common law remedies for wrongful dismissal.

Contract 

What was the contract between the carpenter and his employer?  Normally, the condition of an indefinite hiring is not inserted as a specific term of the employment contract. It is implied. The judge had to determine whether it was implied in this case. To do this, she had to hear evidence on the nature and custom of the building trade in Ottawa, the area in which the carpenter was employed.

The judge held that “there is a custom and usage in the non-union residential construction industry in the Ottawa area that long term on-site construction workers can be and are terminated without notice, payment in lieu of notice or severance pay”.

The judge went on to hold that the custom was reasonable. After all, section 57(10) of the Act specifically exempts construction workers from minimum notice. We are not sure why the judge even considered whether the custom was reasonable. One implies a term into a contract if there is a custom of the trade, regardless of whether that custom is reasonable. It is a question of expectation, not reasonability.

Result

The carpenter received nothing for his dismissal.

We assume that the custom of the trade throughout Ontario does not differ from that in Ottawa. Accordingly, the construction trade rightly does not have to worry about wrongful dismissal actions for employees working on site. This may or may not apply to superintendents.