On July 9th, the Supreme Court granted leave to appeal from the
judgment rendered by the Federal Court of Appeal in Wilson v.
Atomic Energy Canada Ltd. See our previous thoughts on the
Federal Court of Appeal's ruling here.
This appeal raises fundamental questions concerning the
interpretation to be given by arbitrators and ultimately the Courts
to the unjust dismissal provisions contained in Part III of the
Canada Labour Code.
Essentially, the provisions of section 240 and following of the
Code enable a non-unionized employee with more than one year's
service to file a complaint to challenge what is called an
"unjust" dismissal. The Code does not define what is an
unjust dismissal. If the complaint is not resolved through
mediation, it is referred to an arbitrator.
Clearly , the provisions of the Code authorize the arbitrator to
grant remedies which do not exist in Common Law, including
At issue in the Atomic Energy decision are two conflicting
interpretations of what exactly is an "unjust" dismissal.
A first group of arbitrators and some legal scholars have held that
an "unjust" dismissal is a dismissal without cause
meaning that federal employees dismissed without cause have rights
similar to unionized employees challenging wrongful dismissal.
According to this interpretation, giving reasonable notice or the
payment in lieu of notice does not render a dismissal just if there
is no cause to support the termination.
The other school of thought supports the interpretation that a
termination without cause can nevertheless be just if the employer
has given reasonable notice or payment in lieu thereof. The
arbitrators who hold this view are of the opinion that the
provisions of Part III do not consist of a significant departure
from the Common Law.
In the Atomic case, the employer clearly acknowledged that it
had no cause to terminate Mr. Wilson's employment. However, Mr.
Wilson was given working notice and received a severance payment
when his employment ended. Mr. Wilson filed a complaint and the
arbitrator found that the dismissal was unjust because there was no
cause and that the notice and severance did not make the dismissal
just. However, the arbitrator did not apply any remedies but
suspended the proceedings and invited the complainant and the
employer to agree on a suitable remedy.
Atomic sought judicial review before the Federal court which
quashed the arbitrator's decision. Mr. Wilson appealed to the
Federal Court of Appeal. The Federal Court of Appeal sided with the
view that a dismissal without cause is not automatically unjust
provided that reasonable notice was given or a payment in
lieu thereof was made by the employer. The Court was of the opinion
that the federal legislator did not intend to depart from the
general principles of the Common Law concerning
Mr. Wilson sought leave to appeal from to Supreme Court and, as
we previously mentioned, leave was granted on July 9, 2015.
It is to be noted that though the Federal Court of Appeal
mentions the existence of similar legislation adopted by the
province of Nova Scotia it makes no mention of legislation adopted
in Quebec almost at the same time as the provisions of Part III. In
Quebec, the view that giving notice and / or payment of notice
could render a dismissal without cause "just" was
expressly rejected by the Courts more than thirty years ago.
Also, arbitrators in Quebec who have had to apply the
provisions of Part III have almost unanimously taken the view
that the provisions of Part III were a mirror reflection of the
wrongful dismissal provisions of the Quebec Labour Standards Act
and should be interpreted accordingly.
Given the vast remedial powers given to the arbitrator under
Part III which include not only reinstatement but the payment of
all lost wages (thus far exceeding reasonable notice) the Federal
Court's position that the federal legislator did not intend to
depart from the Common Law is questionable. It fails to
acknowledge that the power to reinstate is incompatible with Common
Law or Civil Law in matters of wrongful dismissal.
It is therefore not surprising that the Supreme Court granted
leave to appeal in this very important case which will have serious
repercussions for federally regulated employers and their
Miller Thomson will continue to closely follow this case.
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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