Earlier this year, the Federal Court of Appeal (FCA) settled the
much debated question of whether part III of the Canada
Labour Code (the Code) permits dismissals on a
without cause basis. In February 2015, we discussedJoseph Wilson v. Atomic
Energy of Canada Limited (Joseph Decision), wherein the FCA
confirmed that federally regulated employers may dismiss
non-union employees without just cause, despite the
"unjust" dismissal provisions contained in the Code.
Notably, the FCA also held that it is incorrect to assume that the
dismissal of an employee who was 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.
Recently, in Filo Sigloy and DHL Express (Canada),
LTD. the Federal Court (FC) dealt with an
applicant (Filo Sigloy) that sought to set aside the decision of
adjudicator Joseph B. Rose wherein adjudicator Rose dismissed Mr.
Sigloy's complaint of unjust dismissal without a hearing due to
a lack of jurisdiction. The FC disagreed with adjudicator
Mr. Sigloy was a non-union employee of DHL Express Canada Ltd.
(DHL). Subsequent to his dismissal, he filed a complaint under section 240 of the Code. The
complaint alleged that there were no reasonable grounds to justify
his dismissal. In accordance with procedure under the Code, DHL
provided the Human Resources and Skills Development Canada reasons
for Mr. Sigloy's dismissal, which included: poor performance,
attendance and attitude, quality of work, level of professionalism
and a demonstrated inability to sustain the requirements of his
position. Notably, the letter did not state that the dismissal was
for cause, and in fact, DHL terminated Mr. Sigloy on a without
Adjudicator Rose was appointed to hear Mr. Sigloy's
complaint. At the outset of the hearing, DHL brought forward a
preliminary objection with respect to whether the Adjudicator had
jurisdiction to hear Mr. Sigloy's complaint. Effectively, the
objection was that since the dismissal occurred on a without cause
basis and in accordance with a contract of employment, the
adjudicator lacks jurisdiction to conduct a hearing on the merits
of the unjust dismissal complaint. Adjudicator Rose agreed with
In his reasons, Adjudicator Rose noted that: (i) there was no
indication of impropriety surrounding Mr. Sigloy's dismissal;
(ii) there existed a valid and enforceable employment agreement
between Mr. Sigloy and DHL, the terms of which were compliant with
the Code; and (iii) the initial complaint did not allege
discrimination, reprisal or bad faith.
The Federal Court's Decision:
Notwithstanding its acknowledgement of the merits of the
adjudicator's findings, the FC followed the principle laid out
in the Joseph Decision and held that an adjudicator errs in
assuming that a dismissal of an employment without cause and with
payment of the statutory or contractual amounts is necessarily
just. The FC noted that an adjudicator could still consider the
common law principles governing the law of dismissal and inquire
into whether the compensation complied with the requirements of the
Code or the employment contract.
The FC also held that the Joseph Decision clearly indicated that
adjudicators have jurisdiction to hear complaints that stem from a
dismissal without cause. The inquiry can be cursory or extensive,
but at a minimum, the applicant should have the opportunity to make
submissions in a hearing since procedural fairness trumps all other
The lesson for employers from this decision is clear: a valid
and enforceable employment contract that provides for severance in
compliance with the Code will not preclude an employee from
claiming his or her termination was unjust. Moreover, employers
should be prepared to defend its position in adjudication in the
context of an unjust dismissal as this decision clearly indicates
that an adjudicator must hold a hearing for such claims, whether
cursory or extensive.
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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