The Canada Labour Code (the "Code"), which applies to
federally regulated employers, provides that non-union employees in
non-management positions with 12 months or more service can bring
complaints alleging that the termination of their employment was
"unjust." An adjudicator deciding an unjust dismissal
complaint under the Code can award a wide range of remedies if they
find the termination was unjust, including reinstatement of the
previous release, we summarized the Federal Court of
Appeal's decision in Wilson v. Atomic Energy of Canada Ltd. The
Court of Appeal held that not all without cause terminations are
presumptively unjust which was a considerable shift from the
established jurisprudence that federally regulated non-unionized
employees' in non-management positions could only be dismissed
for just cause similar to the protection afforded to unionized
Today, the Supreme Court of Canada overturned the Court of
Appeal's decision and ruled that the intention of the unjust
dismissal provisions of the Code is to provide non-unionized
federal employees in non-management positions with dismissal rights
analogous to unionized employees. Because of today's decision,
it is now clear that federally regulated employees in
non-management positions with more than 12 months' service may
not be terminated without just cause unless the employee is laid
off because of lack of work or the discontinuance of a
This means that federal employers may not be able to rely on
contractual severance clauses to dismiss employees with more than
12 months of service without cause (unless the dismissal is due to
a lack of work or the discontinuance of a function), as employees
cannot waive their rights under the Code in a contract. Providing
common law notice or pay in lieu of notice of such a dismissal will
also not suffice.
Practically speaking, the Supreme Court of Canada decision is a
return to the state of the law prior to the brief employer-friendly
reprise that the Court of Appeal decision provided. The established
jurisprudence is that in the case of an unjust dismissal,
adjudicators will typically award payment in lieu of notice
slightly in excess of an employee's common law notice
entitlement and would rarely award reinstatement. However, in light
of the SCC decision there is a risk that we may see more
reinstatements. We will keep you apprised of further developments
with respect to how the Supreme Court of Canada decision is applied
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).