In Henderson v Old Dutch Foods Ltd. (ABKB unreported, Jan 19, 2026), the Alberta Court of King’s Bench found an employee was owed backpay for a period of unpaid suspension. The Court dismissed his constructive dismissal claim, but he still ended up with a judgment.
This case is important because it applies a relatively unusual set of facts across several employment law principles, including implied employment contract terms, constructive dismissal and after-acquired just cause.
Counsel for the plaintiff employee was Illya Shcherba, who provided me with a copy of this unreported oral decision.
Facts
The following were the pertinent facts summarized by the ABKB:
- The employee Mr. H worked for Old Dutch (the “Employer”) for 18 years
- At the end of employment, his position was research and development manager, reporting directly to the CEO
- His job involved liaising between marketing and quality control, coordinating development of new products and managing process improvements
- In February 2021, Mr. H was charged with three serious criminal offences. He was arrested on a work day and work phone and laptop were seized
- He did not report his charges or arrest to his employer. They learned about it through a media report in April, 2021. No association with the employer was mentioned in the report. The employer asked him if he was the person in the media report, and he said he was. He said his work equipment was not used in connection with the charges. This was later agreed to have been false.
- The employer put Mr. H on unpaid suspension pending the outcome of the criminal proceedings
- There is nothing in Mr. H’s employment contract or the employer’s policies regarding suspension without pay for any reason
- 6 months into the unpaid suspension, Mr. H’s legal counsel wrote to the employer arguing he had been constructively dismissed
- When the matter was still unresolved 2 months later, and he resigned his employment
- About 6 months after that, he was federally incarcerated for 2 years less a day
- He sued for unpaid wages for the entire period of unpaid suspension. He also sued for severance, alleging constructive termination without cause in Alberta. He was seeking 16 months’ reasonable notice
- The employer defended, arguing there was no constructive dismissal, but that if there was then they had just cause to dismiss his employment
Analysis / Conclusion
The Court decided this matter through its summary judgment and dismissal procedure.
The Court then considered the unpaid wages claim regarding the unpaid suspension. The Court found that this was an administrative suspension, not a disciplinary one.
The Court found that the employer had the power to impose an administrative suspension to protect its reputation in the circumstances, and it was imposed in good faith. However, it was required to be imposed for a relatively short time – which it was not – and it was required to be imposed with pay – which it was not. This led the Court to conclude that the suspension without pay was a contractual breach.
The Court found that the employee was entitled to an award of salary during the suspension period, but was not entitled to his discretionary bonus because he was not working during that period.
However, the Court refused his constructive dismissal claim on the basis that when Mr. H was suspended without pay, he was obligated to either accept that or object to it within a reasonable period of time. He did not object to it until 6 months after he was suspended, which the Court found was not a reasonable period of time.
The Court also considered the employer’s argument that it had after-acquired just cause to terminate Mr. H’s employment. The Court found that the employer had not actually terminated his employment without cause, so it could not now claim it had after-acquired just cause.
My Take
This case is interesting to me as a practitioner in the area. Of particular interest to me is the requirement that administrative suspensions must only be imposed for a relatively short time. Ridiculously long suspensions are not as rare as they probably ought to be.
The point about raising an objection to a contractual breach within a reasonable time is also one worth noting. I think there is a reasonable argument that the constructive dismissal clock should not run when an employee is not at work – either through a voluntary or forced leave.
Note to practitioners: I think its important not to read the Court’s rejection of the after-acquired just cause defence too broadly. The employer here did not dismiss without cause. However, if the court would have found constructive dismissal I believe the conclusion on the employer’s defence rights would probably have been different – because a constructive dismissal is treated as a without cause dismissal for most purposes at law.
In any event, its an interesting case. I have a copy of the oral decision and can make it available on request to lawyers practicing in Alberta.
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