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Update: Unjust Dismissal Under the Canada Labour Code

Posted On: March, 25 2015

The Federal Court of Appeal recently released an important decision that clarifies the law relating to unjust dismissals under the Canada Labour Code (“Code”). In Wilson v Atomic Energy, 2015 FCA 17, the Court overturned a labour adjudicator’s decision that any dismissal without cause under the Code was an unjust dismissal.

Wilson was an employee of Atomic Energy for four and a half years prior to his dismissal without cause. He argued that pursuant the Canada Labour Code, any dismissal without cause was an unjust dismissal warranting a remedy under the Code. Atomic Energy argued that nothing in Part III of the Code precludes an employer from dismissing its employee without cause. 

Prior to the Federal Court of Appeal’s decision in Wilson, there were two lines of cases coming from labour adjudicators:

  1. Those that stood for the position that the Code provides a complete framework for the dismissal of federally regulated employees, meaning there can be no just dismissal without cause (as it is not explicitly provided for); and
  2. Those that stood for the position that there is nothing in the Code that automatically deems a dismissal without cause an unjust dismissal.

At first instance, the labour adjudicator decided that the Code provides a comprehensive framework for the dismissal of federally regulated employees. As such, any dismissal without cause is unjust.

Atomic Energy sought a judicial review of the labour adjudicator’s decision to the Federal Court. The Federal Court granted the judicial review, and Wilson appealed. Both the Federal Court and the Federal Court of Appeal found that a dismissal without cause is not automatically unjust under Part III of the Code.

In rendering its decision, the Federal Court of Appeal relied on the principle that a legislator is presumed to not depart from the prevailing common law unless it does so with “irresistible clearness” (see Goodyear Tire & Rubber Co of Canada v T Eaton Co, [1956] SCR 610 at page 614). In addition, the Court disagreed that any provision of the Code could be read as replacing the established common law that employers may dismiss their employees without cause, with reasonable notice and compensation.  Moreover, the Court characterizes Part III of the Code as creating an alternative forum outside the courts where employees can seek remedies for unjust dismissal. The Court further noted that the remedial powers afforded to adjudicators under the Code are meant to supplement, not replace, existing common law remedies. In so finding, the Court dismissed a prevailing notion that the Code intended to provide non-unionized employees with the same protections as unionized employees. Furthermore, and of import for the impact of this decision on future allegations of wrongful dismissal, the Court noted that nothing in its decision precluded or inhibited adjudicators from examining the circumstances of a dismissal and ordering remedies where they saw fit.

The Federal Court of Appeal’s decision in Wilson gives much needed clarity to unjust dismissal adjudication under the Canada Labour Code. Going forward, this decision signals that federally regulated employees need to place more emphasis on establishing how their termination was unjust. 


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