On July 14, 2016, the Supreme Court of Canada (SCC) released its
decision in Wilson v. Atomic Energy of Canada
Limited,1 confirming that federally regulated
employers cannot lawfully dismiss employees without cause.
What You Need To Know
The decision confirms that non-unionized employees beneath the
rank of manager in federally regulated corporations have protection
against dismissal without cause, much like unionized employees
covered by collective agreements.
When contemplating dismissing a non-management employee,
federally-regulated employers will be required to provide reasons
for the dismissal, such as misconduct, incompetence, or conflict of
interest. This may mean that the employer will have to first
undertake progressive disciplinary steps in order to create an
evidentiary record illustrating just cause for termination.
A dismissed employee of a federally regulated business can ask
for a written statement from his or her employer setting out the
reasons for his or her dismissal. If an adjudicator determines that
the dismissal does not meet the standard of "just cause",
s/he has broad authority to grant an appropriate remedy, including
requiring the employer to reinstate the employee (with or without
back pay), or provide the employee with compensation in the form of
The unjust dismissal regime of the Canada Labour Code
has some limitations. It only applies to employees who have
completed 12 consecutive months of continuous employment.
Complaints following a dismissal cannot be brought before an
adjudicator if the employee was laid off for economic reasons or
because their function was discontinued following a workplace
Background on the Case
Joseph Wilson, a supervisor at Atomic Energy of Canada Ltd.
(AECL), was dismissed by AECL without reason. Wilson was offered a
severance package, but chose instead to file a complaint of unjust
dismissal under the Canada Labour Code (the
The Code grants employees in federally regulated industries the
right to file a complaint if they believe that they have been
unjustly dismissed. Industries governed by the Code's
provisions include banks, marine shipping, air transportation,
inter-provincial railway and road transportation, provincial border
crossing infrastructure, telephone and cable systems, radio and
television broadcasting, most Federal corporations, and many First
The adjudicator in Wilson held that the Code only
permits dismissals for cause, and that paying severance—even
generously—cannot override the requirement to provide reasons
for a dismissal. The adjudicator's decision was overturned on
appeal by the Federal Court, which held that an employer can
dismiss an employee without cause so long as it gives notice or pay
in lieu of notice in accordance with the Code. This decision was
upheld by the Federal Court of Appeal who ruled that the Code did
not prohibit federally regulated employers from dismissing their
employees without cause.
In a split decision, the majority of the SCC allowed the appeal,
and confirmed that employees governed by the Code can only be
terminated for just cause. The SCC further stated that the approach
of providing notice or pay in lieu of notice would undermine the
purpose of the legislation by permitting employers to unilaterally
deprive employees of the full remedial provisions Parliament
incorporated into the Code.
1. 2016 SCC 29 [Wilson].
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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