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Dismissal without just cause: not necessarily “unjust dismissal” under the Canada Labour Code

wrongful-dismissal-progressive-disciplineIn Wilson v. Atomic Energy of Canada Limited, the Federal Court of Appeal has clarified the impact of the Canada Labour Code on an employer’s ability to dismiss employees without cause.

In this case, the appellant, Joseph Wilson, was dismissed by Atomic Energy, his employer of four and a half years, without cause and was offered six months’ severance pay. (This is generous in light of the legislative minimums based on his length of employment, which would have been 18 days’ pay.) Nevertheless, Wilson initiated a complaint under s. 240 of the Canada Labour Code, on the basis that he had been “unjustly dismissed.” He argued before an adjudicator that the Code protects non-unionized, federal employees like himself, from any dismissal without just cause.

This interpretation of the Code would suggest that for federal employees it ousts the common law concept of wrongful dismissal, which allows termination without just cause, provided the employee is given appropriate notice or pay in lieu of notice.

Leading up to this decision, there has been significant conflict among decision-makers, with some taking Wilson’s position that the federal legislation ousts the common law and prohibits all termination without cause, while others have taken the position that this was not the legislators’ intention and the Code merely supplements the common law, adding additional remedies for employees in cases where their dismissal is found to be “unjust.”

The adjudicator took the former position, which led to Atomic Energy bringing an application to the Federal Court for judicial review, which was then appealed by Wilson to the Federal Court of Appeal. This is where this contentious point of law was finally clarified.

It was stated that when interpreting legislation, such as the Code, the legislators are presumed not to be ousting the existing common law unless the intention to do so is clearly expressed, for example if the legislation directly conflicted with the common law or explicitly stated it was meant to replace it. This was not the case here.

The Court held that the Code does not make dismissal without cause automatically “unjust”; rather, this is dependant on the circumstances of the particular case. The Code allows for employers to dismiss employees without just cause if, consistent with the common law, there is a minimum amount of notice given or pay in lieu, and it adds to the common law the possibility of an employee receiving additional remedies if the manner or facts of their specific termination amounted to it being unjust.

The matter was ultimately remitted to the adjudicator given the new legal context, with the sole remaining issue being whether or not, in the circumstances, Wilson’s termination was just.

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Devry Smith Frank LLP

Employment and labour lawyers at Devry Smith Frank LLP
Devry Smith Frank LLP (DSF) is the largest full service law firm in Toronto outside of the downtown core. They offer a broad range of legal services to individual, business and corporate clients in most areas of corporate and personal law. Their firm’s employment law group covers a broad spectrum of HR law, including employment and labour law, occupational health & safety, human rights, workers’ compensation and much more.Lawyers at Devry Smith Frank LLP lead by Marty Rabinovitch B.A.H., LL.B. will be covering issues surrounding employment and labour law and human rights on First Reference Talks. They also provide training, seminars and conferences on the above topics. Read more .
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