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Employment Law - Wrongful dismissal - Dismissal without cause - Reasonable notice period or wages in lieu

Thursday, August 18, 2016 @ 8:00 PM  


Appeal by Wilson from a judgment of the Federal Court of Appeal affirming a decision finding a labour adjudicator decision allowing Wilson’s unjust dismissal complaint to be unreasonable. The Federal Court of Appeal agreed with this conclusion, but reviewed the issue on a standard of correctness. Wilson worked for Atomic Energy Canada Limited (AECL) for four and one half years until his dismissal in November 2009, maintaining a clean disciplinary record. Wilson filed an “Unjust Dismissal” complaint in December 2009, claiming that he was unjustly dismissed contrary to s. 240(1) of the Canada Labour Code (Code). AECL indicated that Wilson was terminated on a non-cause basis and was provided a generous dismissal package that well exceeded the statutory requirements. AECL sought a preliminary ruling on whether a dismissal without cause together with a sizeable severance package meant that the dismissal was a just one. The Adjudicator concluded that an employer could not resort to severance payments, however generous, to avoid a determination under the Code about whether the dismissal was unjust. Because AECL did not rely on any cause to fire him, Wilson’s complaint was allowed. The Application Judge found this decision was unreasonable because, in his view, nothing in Part III of the Code precluded employers from dismissing non-unionized employees on a without-cause basis. The parties before the Court, as they had in all the prior judicial proceedings, accepted that the standard of review was reasonableness. At common law, a non-unionized employee could be dismissed without reasons if he or she was given reasonable notice or pay in lieu. The issue in this appeal was whether Parliament’s intention behind amendments to the Canada Labour Code in 1978 was to offer an alternative statutory scheme consisting of expansive protections much like those available to employees covered by a collective agreement.

HELD: Appeal allowed. The Adjudicator’s interpretation of ss. 240 to 246 of the Code was reasonable, and his decision was restored. The text, the context and the views of the overwhelming majority of arbitrators and labour law scholars confirmed that the entire purpose of the statutory scheme was to ensure that non-unionized federal employees would be entitled to protection from being dismissed without cause under Part III of the Code. Parliament intended to expand the dismissal rights of non-unionized federal employees in a way that analogously matched those held by unionized employees. The foundational premise of the common law scheme — that there was a right to dismiss on reasonable notice without cause or reasons — was completely replaced under the Code by a regime requiring reasons for dismissal. The decisions of adjudicators applying the Unjust Dismissal provisions of the Code attracted a reasonableness standard. Applying that standard, the Adjudicator’s decision was reasonable and consistent with the approach overwhelmingly applied to these provisions since they were enacted. It was unnecessary to endorse any particular proposal to redraw the current standard of review framework at this time.