Should You Suspend an Employee Without Pay

Should You Suspend an Employee Without Pay Pending the Outcome of a Workplace Harassment Investigation?

At HR Proactive Inc., we are often contacted by employers to conduct workplace investigations, particularly involving allegations of harassment or misconduct. We also provide remedial sensitivity training for employees directed to our services following workplace concerns. Occasionally, we hear from employees who have been suspended without pay while an investigation is underway. This raises an important question for employers: is it lawful or advisable to suspend an employee without pay pending the outcome of an internal investigation?

Suspension During Harassment Investigations: Administrative vs. Disciplinary

It’s critical to distinguish between two types of suspension:

• Disciplinary suspension: a penalty for proven misconduct.
• Administrative (investigative) suspension: a neutral step to protect the integrity of an investigation and the workplace while facts are determined.

Employers cannot impose discipline before an investigation is complete. However, administrative suspensions may be justified, particularly where employees must be separated or the investigation could be compromised.

With Pay vs. Without Pay

Most of the time, suspensions pending investigation should be with pay. Because guilt has not been established, withholding pay risks being seen as punishment. Suspending without pay is a substantial change to a fundamental term of employment and can amount to constructive dismissal unless the employer proves it was reasonable and justified.

Key Case Law

Cabiakman v. Industrial Alliance Life Insurance Co. (2004, SCC)

The Supreme Court of Canada confirmed that administrative suspensions are permissible, but only if they are:

1. Necessary to protect business interests.
2. Time-limited, not indefinite.
3. Non-disciplinary in nature.
4. With pay, unless exceptional circumstances justify otherwise.

Filice v. Complex Services Inc. (2018, ONCA)

• Employers do not have an automatic right to suspend without pay, even if policies suggest it.
• The burden is on the employer to prove suspension without pay is reasonable and justified.
• In this case, it was not justified at the time it was imposed, resulting in a finding of constructive dismissal and damages awarded to the employee.

Employer Takeaways

1. Investigate first, discipline later. Never penalize before facts are established.
2. Use administrative suspensions carefully. Frame them as neutral, not disciplinary.
3. Default to with pay. Only suspend without pay if there is clear, defensible justification.
4. Move quickly. Prolonged suspensions, even with pay, can increase legal and reputational risk.
5. Review policies. Ensure your policies support, but do not overreach, your legal authority.

Final Word

Suspending an employee without pay during an investigation is rarely the safest option. Courts have made it clear: unless you can prove it was necessary and justified, it may be deemed constructive dismissal. Employers should treat suspension as a last resort, apply it with caution, and in almost all cases, continue pay until the investigation concludes.

Need help? HR Proactive Inc. has conducted neutral third-party investigations and delivered sensitivity and workplace training for nearly 30 years. Call 1-888-552-1155 for guidance on handling workplace complaints or training solutions.