At common law, a non-unionized employee can be dismissed without
reasons if he or she is given reasonable notice or pay in lieu. Today, a majority of the Supreme Court of Canada
ruled that this common law rule does not apply to
federally regulated employers. The Court ruled that federally
regulated employers must always provide reasons for the termination
of their employees. Furthermore, if the reasons for dismissal do
not meet the standard for "just cause" as that term is
understood in the collective bargaining context, an employee who
has twelve months of continuous service may complain under section
240 of the Canada Labour Code, and may be reinstated, with or
without back pay and damages, or compensated with pay in lieu of
reinstatement plus damages.
In justifying its decision, the majority stated that when
Parliament amended Part III of the Canada Labour Code in 1978 to
include section 240, it intended "to conceptually align the
protections from unjust dismissals for non-unionized federal
employees with those available to unionized employees".
Generally speaking, this means that employers must follow a course
of progressive discipline prior to dismissing an employee unless
there has been an egregious violation of the employment contract
such that immediate termination without prior warning is warranted.
The onus on employers to justify terminations with cause is
extremely heavy, with the result that discharge
complaints/grievances are notoriously difficult to defend.
In a strongly worded dissent, Justices Moldaver, Cote and Brown
held that the common law rule regarding without cause dismissal was
not ousted by the introduction of section 240 of the Canada Labour
Code. In the dissenting judges' opinion, there is nothing in
section 240 or the surrounding sections of the Code which
guarantees lifelong job tenure to employees of federally regulated
businesses, provided such employees do not give their employers
just cause for dismissal.
The majority decision in this case makes it impossible for
federally regulated employers to dismiss non-unionized employees
without cause. The significance of this ruling cannot be
overstated. It is abundantly clear now that all federally regulated
employers must engage in well-documented progressive discipline of
employees whose employment they may wish eventually to terminate;
rarely, if ever, will federally regulated employers be permitted to
terminate employment for a single act of misconduct, or for
misconduct that has gone unpunished.
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