For decades, adjudicators appointed under the Canada Labour Code
to consider unjust dismissal complaints under section 240 have
differed on whether the statute permits federally regulated
employers to dismiss employees without cause, absent a lay off due
to a "lack of work" or the "discontinuance of a
function". In Wilson v. Atomic Energy of Canada
Limited, 2015 FCA 17, the Federal Court of Appeal has settled
the dispute "once and for all", subject to a successful
appeal to the Supreme Court of Canada. Its decision arrives as
welcome news to employers.
Atomic Energy of Canada Limited (AECL) is a Crown corporation,
and one of Canada's largest nuclear science and technology
laboratories. Wilson was a former procurement supervisor at AECL
who was dismissed without cause following four and a half years of
service. Despite AECL's offer to pay six months of pay
representing both statutory and common law severance , Wilson opted
to make an unjust dismissal complaint under Division XIV of the
Specifically, Division XIV establishes a procedure for making
complaints against dismissals that employees consider unjust. Where
an adjudicator appointed under the Code agrees that an employee has
been unjustly dismissed, the adjudicator has broad powers to
require the employer to compensate the employee, reinstate the
employee or grant any other suitable remedy in order to
"counteract" the consequences of the dismissal.
While the correct interpretation of these provisions has been
hotly debated since the late-1970s, popular belief held that
employees could only be dismissed due to just cause, a lack of work
or the elimination of the employee's position (or in a handful
of other prescribed circumstances). This was the line of reasoning
adopted by the adjudicator in the present case, who held that
Wilson's complaint was made out because he had been dismissed
by AECL without cause.
Without Cause Dismissals Not (Automatically) Unjust
In the Wilson decision, the Court of Appeal agreed with the
Federal Court and held that without cause dismissals are not
necessarily unjust under the Code. Rather, Division XIV requires
adjudicators to examine the specific facts of each case and then
determine whether the dismissal was unjust in the circumstances. In
the words of the Court, employees do not have a "right to
a job in the sense that any dismissal without cause is
The Court concluded that Division XIV of the Code supplements
(as opposed to ousts) the common law doctrine of reasonable notice.
As provincially regulated employers already know, this doctrine
holds that an employee who is dismissed without cause but provided
with reasonable notice of termination or pay in lieu thereof is, in
general, not wrongfully dismissed.
However, the Court was cautious to point out that just because
an employer has provided an employee with reasonable notice of
termination or pay in lieu thereof does not necessarily mean that
the employee is without further relief under Division XIV. The
"..., it bears noting that an adjudicator under the
Code does not have free rein to find a dismissal 'unjust'
on 'any basis'. As I have suggested above, 'unjust'
is a term that sits alongside and gathers much, if not all, of its
meaning from well-established common law and arbitral cases
concerning dismissal. It is also a term whose meaning must be
discerned using accepted principles of statutory interpretation ...
. It is for Parliament's chosen decision-makers in this
specialized field – the adjudicators – to develop the
jurisprudence concerning the meaning of 'unjust' on an
acceptable and defensible basis, not 'any basis'. It is for
us to review the adjudicators' interpretations for
acceptability and defensibility when they are brought before
Whether an employee is entitled to such relief will of course
depend on the specific facts of each case.
Lessons for Employers
Federally regulated employers can finally relax, as the
Wilson decision has breathed considerable latitude into
the running of day-to-day operations of an employer's business.
That said, employers must take care to treat employees fairly and
reasonably whenever severing employment. Failing to provide
adequate severance pay or otherwise treat an employee justly could
invite complaints under Division XIV of the Code, which may in turn
result in more extreme forms of relief.
The foregoing provides only an overview and does not
constitute legal advice. Readers are cautioned against making any
decisions based on this material alone. Rather, specific legal
advice should be obtained.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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