Unjust Dismissal Under Canada Labour Code

Termination without Cause

The Supreme Court of Canada in its 2011 decision in Wilson v Atomic Energy defined the rights available to those persons covered by the unjust dismissal jurisdiction of the Code.

The adjudicator concluded that such a person may be terminated only for just cause. 1 The Supreme Court decided that this was a reasonable decision. As noted elsewhere, the reasonableness standard allows for a reasoned contrary decision to also be reasonable. This remains a possible outcome.

Wilson had been employed for 4.5 years. He originally had claimed that his termination was an act of reprisal based upon his prior complaint of improper procurement policies of the employer. He was terminated without cause and provided, as the employer wrote to the inspector, and was “provided a generous dismissal package”.

Following the appointment of an adjudicator, the employer requested a preliminary ruling as to whether there was an available right to file the complaint, given a without cause termination accompanied by this severance payment.

The adjudicator allowed the complaint, having determined that there was no provision in the Code which allowed a not-for-cause termination.

The first review allowed the application as it found this decision unreasonable. The Federal Court of Appeal agreed, however, it applied the standard of review from the original decision as one of correctness, as opposed to reasonableness.

Abella, J. found that the Code was intended to prevent an employer from terminating an employee without cause. Such conduct will allow for the complaint to succeed, absent the exceptions noted. McLachlin, Karakatsanis, Wagner and Gascon, JJ concurred in brief reasons. Cromwell J. also wrote separately concurring reasons.

The essence of the reasons from the majority writers was that the adjudicator decision was reasonable and should be allowed to stand.

All this being said, the standard of reasonableness allows for contrary results to each be judged as reasonable. There is nothing barring an adjudicator, now the Board, from holding to the contrary.

This being said, the argument was made in an adjudicative hearing that there was no jurisdiction to hear the case, this being a not-for-cause dismissal, accompanied by a contractual term which defined the severance obligation. The adjudicator determined that there no right to proceed, a decision reversed on first review, which in turn was upheld in the Court of Appeal. 2

This was a pre-Wilson Supreme Court of Canada case. At the time of the Federal Court of Appeal decision, Wilson had been decided by the Federal Court of Appeal. The Federal Court of Appeal in Wilson applied the standard of correctness which did not hence permit any other result.

To date, post-Wilson there have been no cases denying the right to hearing before the adjudicator in a not-for-cause termination.  This may yet follow.