Legal News

Supreme Court of Canada strengthens whistleblower protection

An employee of a trade union who “blew the whistle” on financial misconduct by her supervisors and then lost her job was recently vindicated by the Supreme Court of Canada, which held that she deserved protection from dismissal under Saskatchewan’s Labour Standards Act.

Under s. 74(1)(a) of the Act, no employer may discharge an employee because the employee “has reported … to a lawful authority any activity that is or is likely to result in an offence”. Both the trial court and the Saskatchewan Court of Appeal held that the employee had been dismissed because of reporting financial misconduct and, further, that the conduct did amount to an offence.

However, the courts denied the employee protection on the basis that the expression “lawful authority” meant that the complaint had to be made to a person or institution authorized by law to deal with the offence. In this case, the employee had made the complaint internally, within the trade union.

The Supreme Court of Canada allowed a further appeal, finding that the plain meaning of “lawful authority” includes those who exercise authority in both the public and private context. It held that the section was designed to apply to whistleblowers who report alleged misconduct to individuals within the employer organization who exercise lawful authority over the employee or over the activity complained of.

Such an interpretation, the Court found, is consistent with the purpose of whistleblower laws, which seek to reconcile an employee’s duty of loyalty to his or her employer with the public interest in the suppression of unlawful activity. This objective is best achieved with an “up the ladder” approach, that is, protecting employees who first blow the whistle to their boss or other persons inside the employer organization who have the “lawful authority” to deal with the problem. The lower courts’ narrow interpretation would discourage the internal resolution of alleged misconduct.

Merk v. International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers, Local 771, 2005 SCC 70