On July 14, 2016, the Supreme Court of Canada released its
decision in the case of Wilson v. AECL. The court's ruling
effectively removed the common law right of employers to dismiss
non-unionized employees that are federally regulated under the
Canada Labour Code (the "Code") with
notice or pay in lieu. Previously there had been a conflicting line
of case law over the past few years that said that employers in
federally regulated industries retained this common law right. This
new decision brings an end to this thought. It overturned the
Federal Court of Appeal's ruling on this particular matter,
which until now had been the last word on the subject.
Wilson was employed as an administrator for Atomic Energy of
Canada Ltd. for four and a half years, with no disciplinary record.
The employer's position was that, although it was "without
just cause", he had been given a generous (six-month)
severance package. The adjudicator ruled that under Part III of the
Code, no amount of notice or pay in lieu would amount to
making an unjust dismissal just. The adjudicator's decision was
overturned at the Federal Court level and then Wilson's appeal
was dismissed by the Federal Court of Appeal.
In her majority reasons, Justice Abella held that, with the 1978
amendments to the Code, it was Parliament's intention
to offer this class of employees the same or analogous protections
to those enjoyed by unionized employees in the collective
bargaining context. In her view, sections 240-246 of the
Code were meant to protect these employees from arbitrary
dismissal. These sections provide broad remedies to an adjudicator
in cases where the dismissal is found to be "unjust".
They include compensation for the employee, possible reinstatement
or the ability to grant any other suitable remedy. These remedies
are in addition to any civil court remedies that might be available
to the employee.
The takeaway from this case for employers in the few industries
that are federally regulated (such as broadcasting, banking,
aviation, inter-provincial trucking etc.) is that as the law
currently stands, dismissal without cause with notice or pay in
lieu is no longer an option. Dismissals are still allowed for just
cause, lack of work or discontinuance of function.
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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