By granting the application for leave to appeal of a dismissed
employee1, the Supreme Court of Canada has elected to
resolve the long-running debate in the case law between two schools
of thought. The Court's decision will confirm whether or not
section 240 of the Canada Labour Code2 (the
"Code") allows dismissal without cause where it is not
unjust for the employee concerned.
This dispute to be heard by the country's highest court
originated with Mr. Joseph Wilson ("Wilson"), an employee
of Atomic Energy of Canada Ltd. ("AECL"), refusing to
sign a release in exchange for a severance package after AECL
terminated his employment without citing any cause, and offered him
six months' severance (whereas sections 230 and 235 of the Code
entitled him to 18 days severance). Wilson refused the offer and
proceeded to file a complaint for wrongful dismissal pursuant to
section 240 of the Code.
The adjudicator of the complaint sided with Wilson, ruling that
dismissal without cause was tantamount to wrongful dismissal. In
the adjudicator's view, the Code only allows employers to
dismiss an employee if it can show reasonable grounds for doing
On judicial review the Federal Court quashed the
adjudicator's ruling, finding that dismissals without cause are
not necessarily unjust, as the Code appears to allow them (sections
230, 235, 240 and 242 of the Code). Consequently, the Court sent
the matter back to the adjudicator to determine whether
Wilson's dismissal could, in light of the surrounding
circumstances, be considered unjust.
This judgment was ultimately upheld by the Federal Court of
Appeal, following its determination that the application for
judicial review was not premature, and an analysis of the two
conflicting lines of decided cases. According to the Court of
Appeal, a dismissal without cause cannot automatically be
considered unjust, and it is up to the adjudicator hearing the
complaint to analyze the facts surrounding the dismissal in order
to determine if it was unjust.
The essence of the Court of Appeal's analysis is based on
two separate legal concepts.
First of all, the Court expressed the view that common law case
law, which allows dismissal without cause provided reasonable prior
notice is given or severance in lieu thereof was paid, must
continue to coexist with the Code. As the common law was not
expressly set aside by Parliament, it is presumed to continue to
apply, with the Code merely supplementing it. In other words,
adjudicators must assume that the concept of reasonable prior
notice is implicit in the Code and they must take it into account
in their analysis.
Secondly, the Court found that no "right to
employment" for non-unionized employees was provided for in
the Code. Adjudicators consequently cannot put them on a par with
unionized employees by shielding them from dismissal without cause.
The Code, in effect, does not limit the employer's prerogative
to dismiss non-unionized employees without cause.
In addition, the Court rejected Wilson's arguments based on
the Sheikholeslami and Boisvert decisions,
holding that they cannot be construed as prohibiting dismissals
without cause or as guaranteeing the right of non-unionized
employees to continued employment.
Moreover, the Court disagreed with Wilson's position that
the remedy under section 240 of the Code risked being rendered
illusory by a decision in favour of AECL. Even if an employer
chooses to dismiss an employee without cause but with severance,
the employee can always apply to an adjudicator to determine
whether the surrounding circumstances indicate that the dismissal
The Supreme Court of Canada will thus shortly put an end to this
judicial seesaw. In addition to learning which school of thought
the Court endorses, it will be equally interesting to witness the
effects of the Court's decision on the subsequent
interpretation of the Code by courts and tribunals.
1 This past July 9, the Supreme Court of Canada granted the
application for leave to appeal made by Mr. Joseph Wilson (a former
employee of Atomic Energy of Canada)
2 R.S.C (1985), C. l-2
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