As of June 2026, suspending an employee in Ontario without pay during a workplace investigation is highly risky. Unless explicitly permitted in the employment contract, an unpaid suspension can trigger a costly constructive dismissal claim. Employers should generally use a paid “Administrative Leave.”
When serious allegations arise in the workplace-such as sexual harassment, massive theft, or workplace violence-employers must act swiftly to protect their staff and their business. Keeping the accused employee in the office while you investigate the claims can compromise evidence, intimidate witnesses, and create an unsafe working environment. Removing them temporarily is often the most logical step.
However, doing so incorrectly can expose an Ontario employer to massive financial liability. 💵 Employment law in Canada heavily favours the employee’s right to earn a living. If you send an employee home and stop their paycheque before you have proven any wrongdoing, courts often view this as an unauthorized penalty. If mishandled, the employee can treat the unpaid suspension as a termination, allowing them to sue your company for full severance pay. This guide outlines the legal way to remove an employee while conducting a fair probe.
Step-by-Step Process for Suspending an Employee in Ontario
Whether your business operates in Mississauga, London, or Sudbury, following procedural fairness is critical. Most HR professionals and law firms recommend a structured, neutral approach to protect the integrity of the investigation.
Step 1: Assess the Need for Removal
Before suspending anyone, ask whether removal is truly necessary. 🔍 If the allegation is minor (like being chronically late), suspension is usually inappropriate. Removal is reserved for severe issues where the employee’s continued presence poses a safety risk, a threat to company property, or a risk that they might destroy digital evidence or tamper with the investigation.
Step 2: Review the Employment Contract
Pull the employee’s signed contract and company policy handbook. Does the contract explicitly give the company the right to suspend the employee without pay pending an investigation? If this clause does not exist (and it is rare that it does), you generally cannot legally suspend them without pay. Doing so invites a constructive dismissal lawsuit.
Step 3: Implement an Administrative Leave (Paid)
The safest legal mechanism is placing the employee on a non-disciplinary “Administrative Leave with Pay.” 💸 Call the employee into a private meeting. Hand them a formal letter stating they are being placed on paid leave while the company investigates a complaint. Explicitly state that this leave is not a disciplinary measure, but a procedural one. Direct them to remain available during normal working hours to answer questions.
Step 4: Secure Digital and Physical Assets
Once the employee has been notified and sent home, immediately secure their access. Have IT temporarily suspend their corporate email, internal messaging systems, and remote server access. Collect their keys and company phone if necessary. This prevents them from accidentally or intentionally interfering with witnesses or deleting relevant emails during your probe.
Step 5: Conduct a Prompt Investigation
You cannot leave an employee on paid suspension indefinitely. 🖞 You must conduct the investigation swiftly and neutrally. Interview the complainant, the witnesses, and most importantly, bring the accused employee back in to give them a fair chance to hear the allegations and defend themselves. Document every interview thoroughly.
Step 6: Conclude and Take Action
Once the investigator issues their final findings, make a decision. If the allegations are unfounded, bring the employee back to work immediately. If the investigation proves serious misconduct (like theft or violence), you may now proceed to terminate their employment for just cause, ending their paid leave and their employment simultaneously.
Financial Implications for Employers in Ontario
Mishandling a suspension is an expensive mistake. Paying for an administrative leave is usually cheaper than paying for a lawsuit.
| Expense Type | Estimated Cost (CAD) |
|---|---|
| Administrative Leave (Paid) | 1 to 3 weeks of the employee’s regular salary |
| Independent Workplace Investigator | $3,000 – $10,000+ (Depending on complexity) |
| Lawyer Consultation for HR | $400 – $800 / hour |
| Damages for Constructive Dismissal | Up to 24 months of severance pay if handled poorly |
How Long Does the Process Take?
A paid suspension pending an investigation should ideally last no longer than 1 to 3 weeks. Ontario courts have ruled that leaving an employee in “limbo” for months, even if paid, can eventually become a constructive dismissal because they are being denied their right to work and maintain their professional skills.
Frequently Asked Questions (FAQ)
Can we tell the rest of the staff why they are suspended?
No. You must maintain strict confidentiality. Announcing that someone is under investigation for theft or harassment before it is proven can lead to a massive defamation lawsuit against the company. Simply tell the team, “John is currently on a leave of absence.”
What if the employee refuses to answer the investigator’s questions?
Employees have a duty to cooperate with legitimate employer investigations. If they refuse to answer questions or attend the investigation meeting, you can generally discipline them for insubordination, and make your final decision based on the evidence you have.
Can we deduct stolen money from their final paycheque?
Under the Employment Standards Act, you cannot unilaterally deduct alleged stolen funds from an employee’s wages. You need either written authorization from the employee explicitly agreeing to the specific deduction, or a formal court order.
If we fire them for cause, do we have to pay severance?
If a proper, neutral investigation proves severe misconduct that fundamentally breaks the employment relationship (like intentional theft or assault), you can terminate for “just cause.” In true just cause situations, the employee is generally not entitled to notice or severance pay.
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