Federal Court Confirms Dismissal Without Cause Available Under Canada Labour Code

In 2009, Atomic Energy of Canada Ltd. (AECL) dismissed its employee, Wilson, without cause. In response, Wilson filed a grievance claiming unjust dismissal. Because AECL is a federal undertaking subject to the Canada Labour Code for labour and employment purposes, a labour adjudicator was appointed under the Code to hear the matter. The adjudicator upheld Wilson’s unjust dismissal complaint on the basis that federally regulated employees can only be dismissed for just cause.

The employer applied to the Federal Court of Canada for judicial review of the decision. The Court held that the Code does not support the principle that federally regulated employers may only dismiss employees for cause. The Court relied on the ss. 230 and 235 of the Code, which provide for notice and severance for employees dismissed without cause, as a clear indication that the statute was intended to allow for without cause dismissals. Further, the Court noted that if Parliament’s true intention had been to only permit dismissals for cause, then it would have expressly stated so, as it has done in other statutes.

The Court concluded that an employer can dismiss an employee without cause so long as it gives notice or severance pay (ss. 230, 235). If an employee believes that the terms of his or her dismissal are unjust, he or she can still complain (s. 240). The only exceptions to the general right to make a complaint are where the dismissal resulted from a lay-off for lack of work or a discontinuance of the employee’s position, or the employee has some other statutory remedy (s.242(3.1)).

In addition, an employee can complain if he or she believes that the reason given by the employer for the dismissal was unjustified or if the dismissal is otherwise unjust (e.g., based on discrimination or reprisal s. 240(1)). If the adjudicator appointed to entertain the complaint concludes on any basis that the dismissal was unjust, he or she has broad remedial powers to compensate the employee, reinstate the employee, or grant any other suitable remedy (s. 242(4)).

Ultimately, the Court allowed AECL’s application and referred the matter back to the adjudicator to determine the question of whether Wilson’s dismissal was unjust. Wilson has until September 30th to appeal the Court’s decision.

This decision is significant for federally regulated employers as it affirms that employees can be dismissed without cause. However, an employee can still complain that without cause dismissals are unjust.

Atomic Energy of Canada Limited v. Wilson, 2013 FC 733

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