Federally-regulated employees may be dismissed on a without
cause basis under the Canada Labour Code (the
"Code"). This was the conclusion by the Federal
Court of Appeal in Wilson v. Atomic Energy of Canada Limited. The
decision upheld the same ruling provided in a judicial review
decision of the Federal Court. Our blog on the Federal Court
decision can be found
here. The previous blog reviews the original adjudicator's
decision as well as the judicial review. As a reminder, the
complainant had been dismissed without cause and provided a 6-month
Historically, s.240 of the Code was interpreted by
adjudicators such that "just cause" and
"unjust" were synonymous. Therefore federally regulated
employers faced the possibility that dismissed employees would be
reinstated if the employer could not prove just cause
for dismissal. The good news for employers is the Federal Court of
Appeal has determined this line of reasoning does not hold up to
In reaching its decision, the unanimous court focused on the
relationship between common law employment principles and Part III
of the Code. Specifically, whether the remedies offered by
Part III oust the common law. Under common law principles, an
employer may dismiss an employee without cause by providing
reasonable or statutory notice. A clear intention from the
legislator is required before a common law principle can be ousted
which the Court of Appeal could not find within the language of the
Code. Rather, the remedies available under the
Code (such as reinstatement) are seen to build upon common
In support of their conclusion, the 3-panel court relied on
neighbouring provisions that specifically recognize the existence
of common law remedies as well subsections 230(1) and 235(1) which
permit termination without cause if compensation is provided. The
court also found that the section 242(4)(b), which grants an
adjudicator the ability to reinstate an employee, can exist
harmoniously with the common law. The reinstatement remedy merely
provides an additional tool to adjudicators rather than
substantively reforming the right of employers to dismiss without
cause. Ultimately an adjudicator must determine whether a dismissal
was "unjust", and the absence of cause is not
This decision upheld a positive decision for federally regulated
employers and is expected to provide greater flexibility when an
employment relationship comes to an end. If you are a federally
regulated employer, the lawyers at CCPartners can help you
understand how this decision affects you.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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