In a decision last month in Wilson v.Atomic Energy
of Canada Limited, 2015 FCA 17, the Federal Court of Appeal
dealt with an employee covered by the Canada Labour Code
who had been terminated without cause, but who had been offered
reasonable severance pay. This case is significant for all
federally regulated employers.
An adjudicator had been appointed to hear the case under the
Canada Labour Code and ruled the fact that the employee
had been terminated without cause meant this was an "unjust
dismissal" under the Code. As such, the termination
would qualify for the "unjust dismissal" remedies,
including possible reinstatement in his position, awarding damages,
or making other orders "to remedy or counteract any
consequences of the dismissal".
This view of the law has been the prevailing interpretation of
this part of the Code for decades. Although not all
adjudicators had adopted that interpretation, it was widely
accepted as a correct interpretation of the Code.
The court referred to the well-known text Employment Law in
Canada by Innis Christie. The court stated that Mr.
Christie "asserts that "[t]he policy of the section is to
provide the non-unionized employee with substantially similar
protections against unjust discharge as the unionized employee
enjoys under a collective agreement". That view was
certainly the most widely held view of the proper interpretation of
the Code. The court decided, however, that the
position taken by Mr. Christie "is unsupported by authority
The court concluded that the "unjust dismissal"
provisions of the Code do not oust the common law dealing
with terminations of employment contracts. If the employer
terminates an employee without cause pursuant to the employment
contract in circumstances that are free from duress, and the
employer offers compensation that is reasonable, then the dismissal
is probably not an "unjust dismissal" under the
Code. The adjudicator will still consider all
aspects of the termination to determine if there are reasons to
conclude that a particular dismissal was "unjust", but,
so long as the employer has acted properly under the common law,
the adjudicator cannot find the dismissal to be "unjust"
merely because it is without cause.
Case-by-Case Definition of Unjust Dismissal
The term "unjust dismissal" is not defined in the
Code. It will be up to adjudicators to decide what
it means on a case-by-case basis, but, from now on, adjudicators
will have to find something unjust in the termination in order to
apply the "unjust dismissal" remedies under the
Code. Adjudicators will not be able to find that a
termination is "unjust" simply because it is a dismissal
This decision means that employers in the federal sector can
terminate non-union employees without cause provided that the
dismissal is not "unjust" for some other reason.
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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