Employment Law

Appeal Win: Ontario welder’s silence not condonation of temporary layoff


Pham v. Qualified Metal Fabricators Ltd.

Samfiru Tumarkin LLP secured a groundbreaking and precedent-setting win for our client, Binh Viet Pham, in the case of Pham v. Qualified Metal Fabricators Ltd., a matter that was heard by the Court of Appeal for Ontario (ONCA).

National Practice Leader David Vaughan and Partner Jon Pinkus successfully argued that Pham’s silence during a temporary layoff — even after multiple extensions — didn’t amount to consent.

As a result, the lower court decision from the Ontario Superior Court of Justice (ONSC) was overturned.

In addition to awarding the former welder $13,500 for the costs of the appeal, the ONCA sent Pham’s constructive dismissal claim back to the ONSC for trial.

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Facts of the Case

  • On October 16, 2000, Pham begins working as a welder for Qualified Metal Fabricators.
  • On March 23, 2020, Pham is informed by his plant manager that he is being temporarily laid off. His manager tells him that he hopes he will be recalled by June 19, 2020.
  • During the meeting, Pham is provided with a letter advising him that he will be put on a temporary layoff for 13 weeks.
  • In addition to continuing his benefits, the letter suggests that there was a “work agreement” giving Qualified Metal Fabricators the right to put him on a temporary layoff. As it turned out, there was no such agreement.
  • On June 2, 2020, Qualified Metal Fabricators extends Pham’s temporary layoff for a period of “up to 35 weeks.”
  • On September 23, 2020, Qualified Metal Fabricators extends Pham’s temporary layoff again. He receives a letter from the company informing him that his layoff has retroactively been deemed to be Infectious Disease Emergency Leave (IDEL) under Ontario’s Employment Standards Act, 2000 (ESA).
  • On December 9, 2020, Pham’s temporary layoff is once again extended. After not being recalled for nine months, he retains a lawyer in order to pursue his full severance entitlements.
  • On December 22, 2020, Pham’s legal counsel informs Qualified Metal Fabricators that he is filing a constructive dismissal claim. The company responded two days later — claiming Pham agreed to the layoff in writing and that they hoped to recall him in a few weeks.
  • On February 9, 2021, after Pham already started a claim for constructive dismissal, he receives a recall letter from Qualified Metal Fabricators. At this time, he had already secured a new job on February 3, 2021.
  • At the ONSC, Qualified Metal Fabricators asks the court to dismiss Pham’s claim that he had been constructively dismissed.
  • The lower court judge accepts the motion brought by Qualified Metal Fabricators and dismisses Pham’s claim on the basis that he accepted the layoff and all of the extensions.

The Court’s Decision

The ONCA agreed with Samfiru Tumarkin LLP’s argument that Pham’s silence during the temporary layoff shouldn’t be considered consent or affect his right to pursue full severance pay through a constructive dismissal claim.

Silence isn’t consent

In order for employers in Ontario to prove that non-unionized workers agreed to a temporary layoff, they must show staff made some kind of positive action.

  • Example: An employee signs an employment contract at the start of, or midway, through their employment that permits a temporary layoff.

As a result of the lower court judge’s errors, including the error of equating silence with consent, the ONSC’s decision was quashed.

The ONCA ruled that Pham can pursue a severance package through a constructive dismissal claim.

As well, the court made a powerful statement on employee rights that is immensely helpful to Pham’s case and will have a positive impact in future matters.

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No substitute for positive action

Qualified Metal Fabricators argued that because other employees were laid off, Pham had agreed to temporary layoffs as well.

While this argument was incorrectly accepted by the lower court judge, the ONCA found that the fact that other employees agreed to certain employment terms didn’t mean Pham did as well.

Company unaware of legal advice

After reviewing when Pham sought legal counsel, the lower court judge found that he should have acted sooner. This contributed to his finding that Pham accepted the temporary layoff.

However, the ONCA rejected this because, among other things, Qualified Metal Fabricators wasn’t aware that Pham had received legal advice before he started his claim for constructive dismissal.

This is a particularly important ruling. Non-unionized employees in Ontario shouldn’t be afraid to consult an employment lawyer. It won’t affect their right to severance.

In fact, seeking legal counsel is always encouraged in these situations.

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Lessons for Employees

  • Don’t be afraid to contact an employment lawyer: If major changes are made to your job without your consent, there is a very good chance that you can treat it as a constructive dismissal. After being laid off for nine months, Pham sought legal counsel to understand what his legal options were. If you have been temporarily laid off, contact an experienced employment lawyer at Samfiru Tumarkin LLP. In most cases, you can treat that as a termination and pursue full severance, which can be as much as 24 months’ pay.
  • Never accept an employment contract without seeking legal counsel: Before starting a new job, or if your employer provides you with a new agreement midway through your employment, hold off on signing anything before contacting our firm. Your boss can’t force you to accept it immediately or a few days after receiving it. Employment contracts often take away key protections that would otherwise be available to you. If Pham signed an agreement where he expressly agreed to layoffs, this result could have been very different.

Lesson for Employers

  • Don’t make changes to an employee’s job behind their back: This decision shows that the law expects employers to be transparent in their communications with staff. It’s not illegal to ask a non-unionized employee to agree to a temporary layoff, as long as you are upfront about it and obtain proper consent. An experienced employment lawyer at Samfiru Tumarkin LLP can make sure your layoff agreement is properly drafted and help manage situations where workers don’t approve of being laid off.

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If you are fired or let go for any reason, contact the experienced employment law team at Samfiru Tumarkin LLP.

Our lawyers in Ontario, Alberta, and B.C. have helped tens of thousands of non-unionized individuals resolve their workplace issues.

We can review your situation, enforce your rights, and ensure that you receive the compensation you are legally entitled to.

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