SCC to Decide if Without Cause Dismissals Permitted under Canada Labour Code

On July 9, 2015, the Supreme Court of Canada granted leave to appeal in Wilson v. Atomic Energy Agency of Canada, 2015 FCA 17.

In its decision, discussed in an earlier article posted here, the Federal Court of Appeal concluded that section 240 of the Canada Labour Code does not prevent employers from dismissing federally regulated employees without cause. The Court reasoned that the language of that section did not show a clear intention to grant non-unionized employees the same rights as unionized employees.

As mentioned in our previous post, the correct interpretation of section 240 of the Code has been unclear, with decisions appearing to depend largely on the adjudicator selected. This caused uncertainty for both employers and employees. We expect that a decision from the Supreme Court of Canada will bring much needed clarity to the matter. For now, employers wishing to terminate without cause should have a sound basis for doing so, and ensure they adhere to all the applicable termination policies and contractual terms of severance or notice. In addition, they should be prepared to justify how the termination will improve the effective operation of the business (i.e. that it is done for bona fide business reasons). We will continue to follow and report on the case.

Questions relating to the content of this article may be directed to Geoffrey Litherland.