When Court Questions Credibility, a Summary Trial is Not Appropriate

Written on behalf of Peter McSherry
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For many Canadians, temporary layoffs are an unfortunate reality of the workplace. However, knowing that there will be a job to return to can provide peace of mind and minimize the urgency in needing to find alternative employment. For some, a permanent layoff or termination may be inevitable. 

If an employee is told that they will be laid off temporarily but is not offered the opportunity to return to work, can this still be considered a layoff, or has it become a termination? As described in a recent decision from the Ontario Superior Court of Justice, a layoff can result in termination, but when questions of credibility arise, it can be difficult to determine exactly what happened.

Employee is one of many who were laid off by employer

In Elliott v Advanced Masonry (Ont) Ltd., issues arose when the employer requested that the employee’s claim be dismissed by way of summary judgment. In his statement of claim, the employee sought damages for constructive and/or wrongful dismissal. The employer provided notice of the layoff to the employee and his colleagues on November 27, 2020. The employee’s statement of claim stated that he was temporarily laid off from his employment on December 11, 2020, due to a shortage of work, however he was recalled by his employer within 13 weeks of the layoff. The employee commenced his claim 17 weeks after the layoff, at which time a recall had still not occurred. 

Under the Employment Standards Act (the “Act”), an employer is required to recall an employee within 35 weeks of a temporary layoff. After 35 weeks pass, a termination is deemed to have occurred. 

In the case at hand, the employee commenced his action after only 17 weeks which is approximately halfway through the acceptable layoff period under the Act, therefore the employer argued that the employee’s action was filed prematurely and should be dismissed. The employer went on to claim that the employee’s actions amounted to his own termination of the employment contract.

Employee defends premature filing of his application

The employee told the Court that the employer verbally terminated him on November 16, 2020, 11 days before the layoff notices were distributed and that the employer took the employee’s truck which he drove for work. The employee went on to claim that the employer told him that he had to lay off all of the employees, which the employee claimed was untrue. While the employee stated that he did sign a layoff notice, but that he was induced into doing so in order to avoid termination.

The employee went on to tell the Court that he attempted to reach the employer by phone in March 2021 to inquire about his employment status, but that the employer never returned his calls which led him to believe that his position would not be recalled.

The employee took the position that the employer’s actions voided the layoff notice because it was obtained through deceit, as the employer never intended to rehire the employee. The employee claimed that his effective termination was in March 2021, when the defendant’s conduct implied that he did not intend to recall him as an employee. 

Employer says the employee’s version of events can’t be proven

The employer’s statement of claim did not mention the additional circumstances as claimed by the employee, and went on to state that the employee would not be able to prove his allegations. The employer argued that the employee did not disclose his claims or position until his examination for discovery, therefore, he asked the Court to find that the employee had fabricated evidence in an effort to win his case.

Court finds employee’s claims vague

The Court admitted that the employee’s claims were “sparse, vague, and imprecise,” adding that the pleadings did not go further than simply informing the employer that a claim existed. The Court added that the claim was drafted in a broad manner and did not directly reference the Act, therefore the claim could not be bound by the Act

The Court noted that the employee’s claim for constructive and/or wrongful dismissal was rooted in the employer’s recall of the other employees who had also been laid off.

Both parties made arguments regarding the credibility of the other, yet both were seeking summary judgment in favour of their position. The Court found itself in a position where it was not able to side with either party. Instead, the Court stated that it would be more appropriate for a trial judge to assess the common law claims brought by the employee, particularly with regard to notice periods, as this would assist in assessing the credibility of each party. Therefore, the summary judgments were dismissed. 

Contact Peter A. McSherry Employment Lawyer in Guelph for Advice on Layoffs, Reasonable Notice & Severance Packages

While terms such as layoff and termination may be used interchangeably, there is an important distinction between the two. Both employers and employees must understand their rights and obligations under both sets of circumstances. The amount of reasonable notice owed to an employee in the event of termination can be affected by many factors over and above the requirements of employment legislation. There may also be other components to consider such as lost wages, health benefits, pension accrual, and bonuses.

Guelph employment lawyer Peter A. McSherry has extensive experience assisting employees who are seeking guidance on layoffs and terminations. Our team can review proposed severance packages or layoff notices to ensure that an employee’s financial interests and legal rights are secured and protected. To schedule a confidential consultation, contact us online or by phone at 519-821-5465.