The Supreme Court of Canada ("SCC") has released its
decision on Atomic Energy of Canada Ltd v
Wilson. We first told you about this case in our
blog. In January, 2015
our blog on the Federal Court confirmed good news for
federally-regulated employers. In that decision the Federal Court
provided clarity for federally-regulated employers that the Canada
Labour Code ("Code") permitted an employee to be
dismissed without cause under section 240. Prior to this decision
there had been controversy and inconsistency from arbitrators
applying section 240.
Unfortunately for employers looking for flexibility in dismissal
for federal non-union and non-management employees, the SCC in a
6-3 decision has restored the arbitration decision and found that
federal employers will require just cause to terminate a non-union
and non-management employee. The decision is available
The SCC found the arbitrator's decision to be reasonable and
restored the decision that a federal employer must have reasons for
dismissal. Justice Abella, writing for the majority, found that
sections 240 to 246 in the Code were intended by the legislature to
provide protection from arbitrary dismissal. The majority reasoned
that the purpose of the statutory scheme was to ensure that
non-unionized federal employees would be entitled to protection
from being dismissed without cause. She noted that the wide variety
of remedies, including reinstatement, would be rendered meaningless
if the payment of a generous severance package was enough to
satisfy the employer's statutory obligations in
Although the minority would have dismissed the appeal, federal
employers should be prepared to provide reasons for any dismissal
to avoid a possible contravention of the Code, as well as
challenges from employees that their dismissals were unjust. Our
lawyers at CCPartners are well versed in navigating terminations
for federal employees and can assist employers in following this
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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