Pham v. Qualified Metal Fabricators Ltd., 2023 ONCA 255, a recent decision of the Ontario Court of Appeal, provides guidance on the topics of when an implied right of temporary layoff will be found and when a temporary layoff will be considered to have been condoned by an employee (and therefore will not result in a constructive dismissal).
BACKGROUND
Mr. Pham was a welder who began his employment with Qualified Metal Fabricators (“QMF”) in October of 2000. During his almost 20-year career with QMF, he had never previously been laid off. In March 2020, at the beginning of the global pandemic, 31 of QMF’s 140 employees, including Mr. Pham, were laid off as a result of the company’s financial losses due to the pandemic.
The initial layoff period was 13 weeks, but it was extended for “up to 35 weeks,” and subsequently extended two more times. Mr. Pham did not object to the layoffs until December 2020, when he consulted a lawyer. He ultimately brought an action for wrongful dismissal.
In response to the action, QMF brought a motion for summary judgment seeking a dismissal on the grounds that Mr. Pham condoned the layoffs, or alternatively, that he had failed to mitigate his damages by not seeking new employment.
In granting summary judgment and dismissing the claim at first instance, the motion judge held there was no genuine issue requiring a trial because QMF had an implied right to place Mr. Pham on layoff since he was aware that many of his co-workers had been laid off in the past and that, in any event, Mr. Pham had condoned the layoffs.
THE COURT OF APPEAL’S DECISION
For reasons associated with whether summary judgment was appropriate, the Court undertook its own analysis of whether there was a genuine issue requiring trial.
As described in more detail below, the Court found that (i) QMF did not have an implied right to place Mr. Pham on a temporary layoff based on past practice, and (ii) the issue of whether Mr. Pham had condoned the layoffs required a trial to determine.
Implied Terms Permitting Layoffs
The Court found that Mr. Pham’s employment contract did not expressly or impliedly permit QMF to lay him off, disagreeing with QMF’s position that its past practice of layoffs created an implied right to layoff. Instead, the Court reaffirmed the principle that for an implied right to layoff to exist, it must be “notorious, even obvious, from the facts of a particular situation.” In this case, the fact that QMF had previously laid off Mr. Pham’s co-workers did not create an implied term in Mr. Pham’s employment contract that he could be laid off.
