In the recent case of Wilson v. Atomic Energy of Canada Ltd.
("AECL") 2013 FC 733, the Federal Court confirmed that
companies subject to the Canada Labour Code (the "Code")
are permitted to dismiss non-union employees without just cause.
The Federal Court overturned a decision of a Code adjudicator
appointed to hear the case allowed the complaint against the AECL
on the basis that the AECL could not avoid an unjust dismissal
complaint by providing a sizable severance package. In the
Court's view, the decision was "unreasonable", as the
adjudicator failed to consider the termination and severance
requirements under the Code. The notice and severance pay
provisions which require employers to provide notice and severance
pay to employees who are dismissed without cause were found to be
inconsistent with the premise that employers are not permitted to
dismiss without cause. The Court further held that if Parliament
had intended to preclude dismissals without cause, it would have
expressly stated so in the legislation.
The decision affects thousands of employees working in federally
regulated industries, such as telecommunications, broadcasting,
banking, and railways, as it reverses the view among many Code
adjudicators that non-unionized employees in the federal
jurisdiction could not be dismissed except for just cause.
Employers may dismiss non-union employees without cause, so long as
notice or severance pay in accordance with the Canada Labour Code
is provided (or pursuant to contractual requirements). Employees
may still bring a complaint if they believe the reasons for the
dismissal or the terms of dismissal were unjust if an employer
purports to terminate for cause and the evidence does not establish
that the dismissal was just, or if the reasons for the termination
were arbitrary or discriminatory.
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