In our Labour and Employment Communiqué of February 4,
2015 titled "
Unjust Dismissal Clarified: Without Cause Terminations Not
Prohibited by the Canada Labour Code," we reported on the
Federal Court of Appeal's decision in Wilson v. Atomic
Energy of Canada. In that judgment, the court determined that
federally regulated employers can, without violating the relevant
provisions of the Canada Labour Code (the
"Code"), terminate employees without cause. In
particular, the court concluded, "a dismissal without cause is
not automatically 'unjust' under Part III of the
Code. An adjudicator must examine the circumstances of the
particular case to see whether the dismissal is
'unjust'". Later, the Court of Appeal commented that
the reasons for termination had to "entail action taken
exclusively to ensure the effective operation of the business and
had to be something other than caprice, convenience or purely
personal disputes". It is also clear from the court's
decision in Wilson that the reasons for termination cannot
include discrimination or a reprisal which would contravene the
Canadian Human Rights Act or other legislation.
In our February 4th Communiqué, we also
mentioned the decision of Adjudicator Rose in Sigloy and DHL
Express (Canada). In Sigloy, the adjudicator applied
the lower court decision in Wilson and dismissed the
complaint because the complainant did not advance any basis to
support his claim that the dismissal was unjust. The adjudicator
did not hear any evidence from either the complainant or the
respondent employer in making that decision. Mr. Sigloy applied for
judicial review of the decision of Adjudicator Rose. On March 17,
2015, the Federal Court Trial Division released its decision
concerning the application for judicial review. The court quashed
the decision of Adjudicator Rose. The Trial Division found that the
Court of Appeal decision in Wilson required the
adjudicator to conduct a hearing where evidence would be submitted.
Justice Rennie stated:
In sum, the adjudicator was required to hold a hearing. The
form, shape and duration of that hearing is, although framed by
legal principle, within the discretion of the adjudicator. The crux
of the Court of Appeal decision [in Wilson] lies, in my view, in
paragraph 97 which instructs that it is incorrect to assume that
the dismissal of an employee dismissed without cause and who has
been paid the required compensation is automatically just. There
must be an evidentiary inquiry, whether cursory or extensive, into
the circumstances of the dismissal.
The exact nature of the hearing to be conducted is within the
discretion of the adjudicator. Justice Rennie suggested the nature
of the evidence required at such a hearing would be determined
after hearing submissions from the parties and, specifically, from
the applicant. Justice Rennie stated, "procedural fairness
requires, at minimum, that the applicant have the opportunity of
making submissions as to the form and content of the hearing that
the adjudicator is required, in light of the Court of Appeal
decision, to hold".
Comment and Practical Implications
The decision of the Court of Appeal in Wilson confirms
that, contrary to some previous jurisprudence, federally regulated
employers do not have to establish cause for the termination of an
employee who is entitled to the protection of the unjust dismissal
provisions of the Code. It is sufficient if the employer
has a legitimate business reason for making the decision. The Court
of Appeal accepted that the terminated employee could still file a
complaint alleging unjust dismissal. However, it appeared from the
Court of Appeal decision in Wilson that the employee had to at
least allege that the employer's decision was improperly
motivated. In Sigloy, the complainant did not allege the
decision to terminate was improperly motivated and the employer
complied with its employment contract with Mr. Sigloy and with the
minimum termination and severance provisions of the Code.
It is, therefore, unclear as to exactly what evidence might be
called at the hearing required by the judgment of the Federal Court
Trial Division in Sigloy.
The Court of Appeal's decision in Wilson was a positive
development for federally regulated employers because it reduced
the burden placed on those employers when terminating certain
employees. However, the Trial Division's decision in Sigloy
creates procedural hurdles which, with respect, appear unnecessary
based on the circumstances before Adjudicator Rose and the
We will continue to monitor the evolution of the law in this
area and will update you concerning any further developments.
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
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.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).