In Pham v. Qualified Metal Fabricators Ltd. 2023 ONCA 255, the Ontario Court of Appeal held that employers could no longer rely on the argument that an employee “waited too long” after a lay-off to advance a constructive dismissal claim.

A 51-year-old metalworker was laid off by his employer of 20 years during the early days of the COVID-19 pandemic. The employee was advised that it would be a temporary, 13-week lay-off. However, during the lay-off, the employee received two extension letters: one on June 2, 2020, extending the lay-off for “up to 35 weeks” and another on September 23, 2020, extending until September 4, 2021. The employee did not sign an agreement or otherwise consent to any of the layoffs. Upon receipt of the third lay-off letter, the employee initiated a claim for constructive dismissal.

The employee was unsuccessful on summary judgment and appealed the decision on the grounds that (1) there was no implied agreement to lay off in the employment contract and (2) he did not condone the lay-off.

Previous case law established that a unilateral lay-off was a substantial change to an employee’s contract that amounted to constructive dismissal unless there was an express or implied term in the contract to the contrary. The motion judge erroneously looked only for an express term. The appeal court found there was also no implied term; they rejected the respondent’s argument that an employer’s past lay-off practices amounted to an implied term. The appellant’s co-workers being previously laid off did not amount to consent to be laid off himself. An employer’s past practices cannot be read in as an implied term of an employment contract.

The Court of Appeal also rejected the respondent’s claim that the appellant condoned the layoff by failing to object to the layoff and waiting to act on the advice of the lawyer. The Court upheld an employee's right to “wait and see” how changes in employment conditions affect them before claiming wrongful dismissal. An employee’s condonation is “expressed by positive action,” therefore, silence does not equal condonation.