At common law, a non-unionized employee may be dismissed without
cause or reasons if he or she is given reasonable notice of
termination or pay in lieu. However, for non-unionized federal
employees, the Supreme Court of Canada has recently clarified that
the common law was replaced under the Canada Labour
Code (Code) by a regime requiring just cause for
As previously reported in
Workwise, in 2015, the Federal Court of Appeal (FCA) issued
what appeared to be a game-changing decision1 by
ruling that non-unionized employees could be dismissed without
cause under Part III of the Code. An appeal brought the
matter before the Supreme Court of Canada (SCC). In the decision of
Wilson v. Atomic Energy of Canada Ltd, 2016 SCC 29 (Wilson), the SCC held
that the Code provides non-unionized federal employees
with significant protection from dismissals without cause, even
where adequate severance pay is
provided.2 Specifically, the Code stands
in the way of an employer's common law right to provide
reasonable notice (or payment in lieu) to dismiss a non-unionized
employee without cause.
Mr. Joseph Wilson was employed as a
non-unionized worker by Atomic Energy Canada Limited (AECL) for
four and a half years until he was dismissed on a without-cause
basis in November 2009. AECL is a federally-regulated employer, and
as such, is governed by the Code. Mr. Wilson filed a
complaint in December 2009, claiming that he had been unjustly
dismissed contrary to s. 240(1) of the Code. AECL maintained that
the dismissal was a just one, given that they had provided a
generous severance package that exceeded statutory
A labour adjudicator was appointed to
hear Mr. Wilson's complaint. The adjudicator concluded that an
employer could not resort to severance payments, however generous,
to avoid the finding that the dismissal was unjust under the
Code.3 Because AECL did not rely on any cause for
their dismissal of Mr. Wilson, the dismissal was found to be an
unjust one under the Code.
AECL appealed to the Federal Court,
where the Application Judge reversed the adjudicator's
decision, relying on the common law approach. The Federal Court
found that nothing in Part III of
the Code precluded employers from dismissing
non-unionized employees on a without cause basis. The ruling made
by the Federal Court was upheld on appeal to the FCA. The
matter then made its way to the SCC.
In deciding Wilson, the
SCC interpreted the right of employees based on Parliament's
intention in enacting Part III of the Code. The SCC
found that the intention was to entitle non-unionized
federally-regulated employees to protection from being dismissed
without cause. The Code is meant to encourage
employers to dismiss an employee in a manner that demonstrates that
they made the employee aware of performance problems, worked with
the employee to correct the issue and resorted to dismissal only as
the final alternative.
The result is that the law governing
the unjust dismissal of non-unionized employees under
the Code has largely converged with the
equivalent law governing unionized employees. Justice Abella went
so far as to note that with Part III of the Code,
Parliament intended to expand the dismissal rights of non-unionized
federal employees to make them, if not identical, at least
analogous to those of unionized employees.
Effectively, the SCC has shown that
the common law right of employers to dismiss without cause, where
reasonable notice has been provided, has been replaced under
the Code to require federally-regulated
employers to meet a just cause standard.
Field Law can assist federally
regulated employers with any questions about their obligations
pursuant to the Canada Labour Code.
1Wilson v Atomic Energy of Canada
Ltd., 2015 FCA 17,  FCJ No 44
2Wilson v. Atomic
Energy of Canada Ltd., 2016 SCC 29,  SCJ No 29
Ltd. v. Norgren, 2005 FC 804,  FCJ No 992 (FC)
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