UNJUST DISMISAL UNDER THE CANADA LABOUR CODE –

ADJUDICATION – PART III – CANADA LABOUR CODE

SPEAKING NOTES – IB S. PETERSEN AND MICHAEL HOWCROFT

CBA – EMPLYMEN T LAW SECTION NOVEMBER 2009

Introduction

We propose to focus on s. 240 of the Canada Labour Code dealing with unjust dismissal,[1] which applies to employees and employment “in or in connection with the operation of any federal work, undertaking or business” (see s. 167). Employers subject to the Code varies from large and sophisticated financial institutions, such as banks, to small trucking companies.

Whether advising or representing an employer or an employee, s. 240 provides many difficult issues, especially if approached from a traditional wrongful dismissal perspective.

Section 240 reads:

(1) Subject to subsections (2) and 242(3.1), any person

(a) who has completed twelve consecutive months of continuous employment by an employer, and

(b) who is not a member of a group of employees subject to a collective agreement,

may make a complaint in writing to an inspector if the employee has been dismissed and considers the dismissal to be unjust.

Time for making complaint

(2) Subject to subsection (3), a complaint under subsection (1) shall be made within ninety days from the date on which the person making the complaint was dismissed.

Extension of time

(3) The Minister may extend the period of time referred to in subsection (2) where the Minister is satisfied that a complaint was made in that period to a government official who had no authority to deal with the complaint but that the person making the complaint believed the official had that authority.

Eligibility

The general criteria for eligibility are as follows. A person is only eligible under s. 240 if the person:

is an employee (s. 167(1));
is not a manager (s. 167(3);
has 12 consecutive months of continuous employment with the employer;
complaints within the 90 day time limit from date of the dismissal;
has not been laid off (s. 242(3.1));
is not covered by a collective agreement or has access to other statutory remedies (human rights, for example );
has exhausted the statutory settlement process (s. 241(2)); and
received approval from the minister of labour (s. 241(3).

Unless these requirements are met, an adjudicator lacks jurisdiction to decide a complaint. It is important, however, to note that these requirements must be given a narrow construction to meet the objectives of the legislation.[2] Of course, the determination of whether these requirements have been met is not always clear, and must be considered in light of the particular factual circumstances. For example, did the employee resign or was he or she dismissed? What is included in the 12 months of employment required?

Termination involves an act of the employer without the voluntary and informed consent by the employee. It must be clear and unambiguous. In Little Leaf v. Peigan Board of Education, [2002] F.C.J. No. 1767, Gibson J., approved of the following:

The courts have held that in order to be effective, a notice of termination must clearly and unequivocally communicate to the employee that his or her contract will end on a certain date. See, for example, Kalaman v. Singer Valve Co. (1996), 19 CCEL (2d) 102, at p. 106 (BCSC,) revsd in part (1997), 31 CCEL (2d) 1 (BCCA), but not on this point; … . Furthermore, the courts take an objective approach and ask whether a reasonable person in the position of the employee would interpret the words used, in the context, as meaning that his or her contract is being brought to an end. … . David Harris’ textbook, “Wrongful Dismissal”, puts it this way: “Dismissal is a matter of substance, no form. It is effective when it leaves no reasonable doubt in the mind of the employee that his or her employment has already come to an end or will on a set date.” …⁵

In some cases, the non-renewal of fixed term contracts may constitute dismissal. In Syrette v. Head of the Lake School, [2003] C.L.A.D. No. 352, adjudicator Blaxland noted:

33 The word “dismissal” is not defined in the Canada Labour Code and should be considered to reflect the various social and economic employment situations that are always changing in Canada. I note specifically that the present trend of the Supreme Court of Canada is to recognize that employment is a fundamental right for which the employer must act with the utmost respect and fairness. … I do not accept as current concept of employment law that an employer … can avoid the Canada Labour Code by simply turning over annual basis fixed-term contracts. Employees have a right to expect ongoing employment. Where they have established an ongoing employment relationship … it would be assumed that such an employment relationship would have an expectation of ongoing employment.

35 …. In that Parliament has chosen not to define the meaning “dismissal”, in Section 240 what constitutes a dismissal can be interpret by an adjudicator according to modern legal concepts and societal expectations. I believe that these expectations have for ten years been interpreted in a more employee favourable manner in the current jurisprudence following the direction of the Supreme Court of Canada. Decisions such as Sagkeeng (1995) 103 F.T.R. 274, 16 C.C.E.L. (2d) 259, where, after annual contracts were signed over a ten year period, a decision not to renew the contract for a further fixed-term of employment was determined not to be a ” dismissal”, is no longer the correct interpretation of the intent of Parliament.

Another potential grey area is constructive dismissal. Under common law, where the employer unilaterally changes a fundamental term of the contract, the employee may have an action for constructive dismissal.

Section 242(3.1) provides:

(3.1) No complaint shall be considered by an adjudicator under subsection (3) in respect of a person where

(a) that person has been laid off because of lack of work or because of the discontinuance of a function;

Thus, an employer’s for bona fide modifications of terms and conditions of employment may constitute a lay-off or “discontinuance of a function.” In that case, the adjudicator lacks jurisdiction.

In Hewton v. Dickson Transport and Coach Lines (Napanee) Ltd., [2002] C.LK.A.D No. 586, adjudicator Adell reasoned:

28 The common law concept of constructive dismissal has been applied in the context of the unjust dismissal provisions of the Canada Labour Code, as is explained in the leading case of Srougi v. Lufthansa German Airlines [1988] F.C.J. No. 539 (Federal C.A.). However, there is at least one important difference. In principle, the common law does not distinguish between a dismissal and a layoff; unless there is a contractual understanding to the contrary, an employee who is told by the employer to stop work temporarily because there is no work for him or her to do is entitled to treat such a demand as tantamount to a dismissal at common law, and to claim a remedy for dismissal without cause. For better or worse, that is not true under ss. 240-246 of the Canada Labour Code. Section 242(3.1)(a) of the Code prohibits an adjudicator from considering an unjust dismissal complaint if the complainant has been “laid off because of lack of work or because of the discontinuance of a function …” As England and Christie point out, “It is critical to appreciate that the common law concept of constructive dismissal cannot be transposed holus bolus into the context of s. 240 because different policy considerations come into play by virtue of a. 240(3.1)(a) …”

….

33 …. the issue I must decide is whether the company’s conduct, looked at objectively, was such that a reasonable employee in his position would believe that resigning was the only real option open to him, so that what appears on its face to be a layoff was actually a constructive dismissal.

Adjudicators will also scrutinize the bona fides of a lay-off. That does not mean that they will review the business rationale. Rather the focus is on whether the employer’s decision is made in good faith.[3] In a 1986 case, the Federal Court of Appeal concluded that subcontracting constitute a “discontinuance of a function” …. [p]rovided that decision is genuine and there is nothing artificial about it.”

Employers are well advised to ensure that they provide the adjudicator with the proper evidence setting out the financial and organizational basis for the layoff.

Conciliation and Settlement

241(2) requires that an inspector from HRSDC investigates the complaint and attempts to settle it. The success rate is fairly high – around 80 per cent.[4]

242(1) provides:

(1) The Minister may, on receipt of a report pursuant to subsection 241(3), appoint any person that the Minister considers appropriate as an adjudicator to hear and adjudicate on the complaint in respect of which the report was made, and refer the complaint to the adjudicator along with any statement provided pursuant to subsection 241(1).

The Code grants the Minister of Labour discretion whether to remit the complaint to adjudication. Relatively few cases are not remitted.

Statement of Grounds for Termination

Section 241 requires the employer to provide a statement setting out the reasons for the termination:

(1) Where an employer dismisses a person described in subsection 240(1), the person who was dismissed or any inspector may make a request in writing to the employer to provide a written statement giving the reasons for the dismissal, and any employer who receives such a request shall provide the person who made the request with such a statement within fifteen days after the request is made.

Some cases suggest that the failure to provide those reasons may be evidence of “unjust” dismissal. In any event, from a practical standpoint, an employer is well advised to set out the grounds comprehensively, and consult counsel before submitting those written reasons.

Most adjudicators apply the more restrictive rule regarding new grounds for dismissal developed by collective agreement arbitrators. In Stevenson v. Bank of Montreal, [2005] C.L.A.D. no. 343 (Springate), a case that contains a useful review of the authorities, the adjudicator noted:

78 As noted in several of the cases discussed above, the Code does not state what will happen if an employer fails to provide a written statement after one has been requested pursuant to section 241(1). The Code also does not state that the employer is to be held to the grounds set out in the written statement. This does not, however, logically mean that an employer is free to rely on any grounds it might decide to advance regardless of what was contained in a section 241(1) response. It more reasonably means that if an employer seeks to rely on grounds not included in a section 241(1) response the adjudicator must determine the appropriate manner of proceeding. As already noted, the general practice of adjudicators is to hold an employer to the reasons set out in a section 241(1) response with the exception of matters unknown to the employer at the time the employer provided the response. An adjudicator might, however, decide that the particular circumstances of a case justify allowing an employer to rely on grounds previously known to the employer but either not enumerated in a section 241(1) response or set out in a late response.

79 In the instant case counsel for the Bank relied on that portion of section 242(2)(b) which states that an adjudicator “shall give full opportunity to the parties to the complainant to present evidence and make submissions to the adjudicator and shall consider the information relating to the complaint”. The adjudicator in the Wygant case suggested that this language requires an adjudicator to consider all of the reasons advanced by an employer at a hearing despite an absent or late section 241(1) written statement. As already noted, an adjudicator might decide based on the particular circumstances involved to allow an employer to rely on grounds not referred to in a section 241(1) response or referred to in a late response. I do not, however, view section 242(2)(b) as mandating that an employer will always be entitled to justify an employee’s dismissal on grounds not put forward in a section 241(1) response. Such an approach would effectively write section 241(1) out of the Code notwithstanding the important role that it can play.

80 I view section 242(2)(b) as requiring that an adjudicator give full opportunity to the parties to present evidence relevant to a complaint and consider all information, including evidence and submissions, relevant to the complaint. What is relevant depends in large measure on what is in dispute. Should an employer set out its reasons in writing for dismissing an employee in response to a section 241(1) request and then be unable to convince an adjudicator that it has a justifiable reason for changing or adding to those reasons, the complaint and the employer’s section 241(1) written reasons for dismissal would set out the parameters of what is relevant.

Three significant exceptions to the “new ground” rule have been recognized:[5]

A culminating incident expressly set out in the employer’s s. 241 statement may involve previous incidents that are not referred to expressly in the statement.
New grounds may be added if they occurred prior to the termination but could not reasonably have been known to the employer as of the time of termination.
New grounds that are so intrinsically interwoven with the expressed grounds that they form part and parcel of the expressed grounds.

Just Cause

Just cause is not defined in the Code. Most adjudicators give “just cause” a broader meaning than the common law standard and closer to the standard applied by collective agreement arbitrators.[6]

This reflects the (statutory) remedial purpose of s. 240, counteracting the deficiencies in the common law principles of wrongful dismissal. Under the common law, for example, an employer may dismiss an employee for any reason by giving notice or pay in lieu of such notice.

In Iron v. Kanaweyikmik Chiold and Family Services Inc., [2002] C.L.A.D. No. 517, adjudicator England noted:

12 ….. The issue, therefore, is whether giving pay in lieu of notice such as would be suffice to lawfully terminate the employment contract at common law in a civil suit for wrongful dismissal automatically constitutes “just cause” for dismissal in an action under section 240 of the Canada Labour Code.

13 The correct interpretation of the word “unjust” in section 240 must be gleaned from the overall scheme and purpose of the section and the Code as a whole. In this regard, the courts have frequently held that employee rights under protective employment standards acts such as Part III of the Canada Labour Code must be given a broad, generous and liberal interpretation so as to further the general remedial goal of such legislation. (See, for example, the remarks of Iaccobucci J. to this effect in Re Rizzo and Rizzo Shoes Ltd., [1998] 1 S.C.R. 27, at p. 36, involving the meaning of the word “terminated” in the Ontario Employment Standards Act.) In my view, it would be repugnant with the remedial policy of section 240 if an employer were allowed to dismiss an employee for “cause” according to the employer’s whim and fancy simply by providing the employee with the requisite pay in lieu of notice termination required to terminate the contract lawfully at common law. Suppose, for instance, that the employer includes an express term in the contract of employment stating that two week’s notice of termination must be given, and assume that this conforms with the minimum notice required under section 230 of the Code. Suppose the employer decides to get rid of an employee because he or she supports the Saskatchewan Roughriders rather than the Toronto Argonauts. Clearly, it would be repugnant with the policy of section 240 to rule such a dismissal to be for “just cause” on the ground only that the requisite pay in lieu of notice as been given at common law. Rather, the purpose of the unjust discharge provision in section 240 is to protect the personal dignity and autonomy of the individual employee in termination situations. Professor Hugh Collins’ seminal book “Justice in Dismissal” (Oxford: Clarendon Press, 1992) expostulates in detail the safeguards that are necessary in termination situations in order to safeguard adequately the employee’s personal dignity and autonomy. (See, especially, pp. 16-20 and chaps. 2 and 3). In order to be considered “just”, an employer’s decision to dismiss must be (1) rationale, in the sense of furthering the legitimate business goals of the organisation; (2) proportional in the amount of harm the employee’s actions are causing to the production process; (3) made in good faith, non-arbitrarily and non-discriminatory; and (4) made in a procedurally fair manner.[sic.]

14 Dismissing an employee with two weeks pay in lieu of notice because he or she supports a particular football team clearly fails to satisfy any of the first three above-mentioned criteria. Section 240 of the Canada Labour Code, in my view, requires that “just cause” be determined according to these four criteria, not according to whether the notice period requirements in the employment have been fulfilled. Indeed, assuming that the very purpose for enacting section 240 in the first place was to remedy the deficiencies of the common law wrongful dismissal action – such an assumption is highly plausible for otherwise there would seem to be no reason for the enactment – one such deficiency is that the employer can insulate its substantive reasons for dismissal from review by a neutral adjudicator by the simple technical device of complying with the contractual notice requirement. It seems to me that the legislators intended a section 240 “just cause” review to pierce the technical veil of the contractual notice requirement and focus on the substance of the employer’s grounds for dismissal by applying criteria such as rationality, proportionality, good faith, discrimination, arbitrariness and procedural fairness. (Emphasis added)

Employers cannot contract out of the Code. This approach has serious implication for the ability of employers to regulate the relationship with their employees. For example, employment contract provisions that purport to justify dismissal for specified offences do not bind an adjudicator. That does not mean that such provisions are irrelevant. They may inform the parties as to their mutual expectations. Likewise, internal employer disciplinary procedures cannot fall below standards contemplated by the Code.

Similar to collective agreement arbitrations, the employer has the burden to prove “just cause” on the balance of probabilities.

Non-culpable dismissal. While employers under common law may terminate employees, whose performance is considered inadequate, simply by giving notice, or pay in lieu, employers subject to the Code are in a different position.

Adjudicators have adopted the standard from collective agreement arbitrators. A useful list is set out in arbitrator Allan Hope’s decision in Edith Cavell Private Hospital and HEU loc. 180, [1982] B.C.C.A.A.A. No. 290 (para. 14). It is not open to an employer alleging a want of job performance to merely castigate the performance of the employee. It is necessary that specifics be provided. An employer who seeks to dismiss an employee for a non-culpable deficiency in job performance must meet certain criteria:

(a) The Employer must define the level of job performance required.

(b) The Employer must establish that the standard expected was communicated to the employee.

(c) The Employer must show it gave reasonable supervision and instruction to the employee and afforded the employee a reasonable opportunity to meet the standard.

(d) The Employer must establish an inability on the part of the employee to meet the requisite standard to an extent that renders her incapable of performing the job and that reasonable efforts were made to find alternate employment within the competence of the employee.

(e) The Employer must disclose that reasonable warnings were given to the employee that a failure to meet the standard could result in dismissal.

The burden of proof is on management. Although there is no requirement to do so, the employer is well advised to put communications in writing. If the dismissal goes to hearing, the evidence should provide specific and detailed instances of the employee’s failure to meet the standard.

The employer must be careful to follow the requisite procedure or the dismissal may be found to be unjust. A termination may be substantially fair, but procedurally flawed. Adjudicators may, however, fashion take that into account when fashioning a remedy, for, example reducing compensation (Bell Canada v. Halle, [1989] F.C.J. No. 555 (FCA)).[7]

Culpable dismissal. Employees cannot be dismissed except for cause. Central to that is the notion of progressive discipline, clearly and unequivocally warning employee that their job is in jeopardy. Some adjudicators have required that the employee is provide an opportunity to explain the conduct in question (Evaniuk v. T.D. Financial Group, [2002] C.L.A.D. No. 520, para. 171 (Tesky).

Barnacle, Wood and England explain the exceptions:

17.127 Fourth, the “corrective” model permits the employer to dispense with preliminary warnings and suspensions and dismiss for a first offence in two situations, both of which reflect the principle of proportionality which lies at the heart of the “rights” paradigm. First, where it is plain that the employee would not have taken the chance to correct his or her behaviour even if he or she had been given it (for example if he or she continues to deny his or her offences up to the adjudication hearing instead of coming clean at the earliest opportunity when first confronted with the offence by the employer) adjudicators reason that corrective measures would be superfluous.37 Second, if the employee commits an act of extremely serious misconduct, adjudicators reason that the employer’s interest in protecting its operations outweighs the employee’s interest in having a second chance.38

17.128 In determining what constitutes “serious misconduct” for this purpose, adjudicators follow the approach of collective agreement arbitrators. Thus, the following have been recognized as serious misconduct:

downloading pornography from the Internet onto a workplace computer;
physical and verbal assault and/or intimidation of fellow workers, customer/clients or the public;
driving a company vehicle while impaired by alcohol43 or a medical condition;
divulging confidential information about a client’s finances in “privacy sensitive” industries such as banking;
theft and fraudulent misuse of company property,46 especially where the nature of the industry involves looking after money and goods, for example, banking, financial services and courier/cargo handling services;
falsifying business and/or employment records;
trafficking drugs during working hours;
deliberately lying to the employer, whether or not the company sustains actual losses as a result;
deliberately falsifying qualifications, credentials and prior work experience during the recruitment process;
acting in a conflict of interest with the employer;
misuse of confidential information and trade secrets;
competing against the employer in business without the latter’s consent;
committing acts of sexual57 or racial58 harassment against fellow employees or customers;
endangering the safety of customers and the public;
a deliberate and persistent refusal to resume work when diagnosed fit by a doctor or when otherwise lawfully ordered to do so;
flagrant and deliberate refusal, without reasonable excuse, to obey a lawful and reasonable order of the employer;
insolence towards a supervisor that erodes the supervisor’s symbolic authority in the eyes of the workforce;
violation of an employer’s policy against drug and alcohol use, especially in safety sensitive industries such as trucking; and
unauthorized absenteeism from work without reasonable excuse. (footnotes omitted)

A test often cited in the determination of just cause in a non-union context is (familiar to most labour lawyers – Wm Scott & Company, [1977] 1 Can. LRBR 1 (B.C.L.R.B.):

13 Instead, arbitrators should pose three distinct questions in the typical discharge grievance. First, has the employee given just and reasonable cause for some form of discipline by the employer? If so, was the employer’s decision to dismiss the employee an excessive response in all of the circumstances of the case? Finally, if the arbitrator does consider discharge excessive, what alternative measure should be substituted as just and equitable? (emphasis added)

In Kelowna Flightcraft Air Charter Ltd. v. Kmet, [1998] F.C.J. No. 740 (F.C.T.D.), Rouleau J. cited the Wm Scott test with approval in the s. 241 context:

… I reject the applicant’s contention that the Adjudicator erred in law by relying upon the principles set out in the Wm. Scott case since that decision was made in the context of a union setting. The framework of analysis for dismissal cases, as set out in the Scott case, is entirely consonant with the statutory mandate of an adjudicator appointed under section 242 of the Canada Labour Code. The decision does not purport to be a substantive doctrine but rather consists of a three-step method of analyzing dismissal cases and a non-comprehensive list of factors that may, in any given case, be relevant in assessing the appropriateness of the discharge penalty. Simply put, the analysis set out in Scott provides a reasonable methodology to analyze the facts of a case and reach a determination of whether a dismissal is unjust. I am satisfied therefore that it was entirely within the scope of the Adjudicator’s mandate to utilize that analysis and that it was not patently unreasonable for him to do so.

The following quote from Wm Scott probably reflects the approach of most adjudicators:

14 Normally, the first question involves a factual dispute, requiring a judgment from the evidence about whether the employee actually engaged in the conduct which triggered the discharge. But even at this stage of the inquiry there are often serious issues raised about the scope of the employer’s authority over an employee, and the kinds of employee conduct which may legitimately be considered grounds for discipline. (See for example Douglas Aircraft (1973) 2 L.A.C.(2d) 56.) However, usually it is in connection with the second question — is the misconduct of the employee serious enough to justify the heavy penalty of discharge? — that the arbitrator’s evaluation of management’s decision must be especially searching:

(i) How serious is the immediate offence of the employee which precipitated the discharge (for example, the contrast between theft and absenteeism)?

(ii) Was the employee’s conduct premeditated, or repetitive; or instead, was it a momentary and emotional aberration, perhaps provoked by someone else (for example, in a fight between two employees)?

(iii) Does the employee have a record of long service with the employer in which he proved an able worker and enjoyed a relatively free disciplinary history?

(iv) Has the employer attempted earlier and more moderate forms of corrective discipline of this employee which did not prove successful in solving the problem (for example, of persistent lateness or absenteeism)?

(v) Is the discharge of this individual employee in accord with the consistent policies of the employer or does it appear to single out this person for arbitrary and harsh treatment (an issue which seems to arise particularly in cases of discipline for wildcat strikes)?

The point of that overall inquiry is that arbitrators no longer assume that certain conduct taken in the abstract, even quite serious employee offences, are automatically legal cause for discharge. (That attitude may be seen in such recent cases as Phillips Cables (1974) 6 L.A.C. (2d) 35 (falsification of payment records); Toronto East General Hospital (1975) 9 L.A.C. (2d) 311 (theft); Galco Food Products (1974) 7 L.A.C. (2d) 350 (assault on a supervisor).) Instead, it is the statutory responsibility of the arbitrator, having found just cause for some employer action, to probe beneath the surface of the immediate events and reach a broad judgment about whether this employee, especially one with a significant investment of service with that employer, should actually lose his job for the offence in question. Within that framework, the point of the third question is quite different than it might otherwise appear. Suppose that an arbitrator finds that discharge and the penalty imposed by the employer is excessive and must be quashed. It would be both unfair to the employer and harmful to the morale of other employees in the operation to allow the grievor off scot-free simply because the employer overreacted in the first instance. It is for that reason that arbitrators may exercise the remedial authority to substitute a new penalty, properly tailored to the circumstances of the case, perhaps even utilizing some measures which would not be open to the employer at the first instance under the agreement (e.g. see Phillips Cables, cited above, in which the arbitration board decided to remove the accumulated seniority of the employee).

Even in cases of dishonesty, which traditionally provided “automatic” cause for dismissal, must be analyzed in the context of such factors as the seriousness of the offence, whether the conduct is premeditated, the employees length of service and discipline record, and consistency of the employer’s discharge policy. In McKinley v. BC Tel, [2001] 2 S.C.R. 161:

48 In light of the foregoing analysis, I am of the view that whether an employer is justified in dismissing an employee on the grounds of dishonesty is a question that requires an assessment of the context of the alleged misconduct. More specifically, the test is whether the employee’s dishonesty gave rise to a breakdown in the employment relationship. This test can be expressed in different ways. One could say, for example, that just cause for dismissal exists where the dishonesty violates an essential condition of the employment contract, breaches the faith inherent to the work relationship, or is fundamentally or directly inconsistent with the employee’s obligations to his or her employer.

49 In accordance with this test, a trial judge must instruct the jury to determine: (1) whether the evidence established the employee’s deceitful conduct on a balance of probabilities; and (2) if so, whether the nature and degree of the dishonesty warranted dismissal. In my view, the second branch of this test does not blend questions of fact and law. Rather, assessing the seriousness of the misconduct requires the facts established at trial to be carefully considered and balanced. As such, it is a factual inquiry for the jury to undertake.

….

53 Underlying the approach I propose is the principle of proportionality. An effective balance must be struck between the severity of an employee’s misconduct and the sanction imposed. The importance of this balance is better understood by considering the sense of identity and self-worth individuals frequently derive from their employment, a concept that was explored in Reference Re Public Service Employee Relations Act (Alta.), [1987] 1 S.C.R. 313, where Dickson C.J. (writing in dissent) stated at p. 368:

Work is one of the most fundamental aspects in a person’s life, providing the individual with a means of financial support and, as importantly, a contributory role in society. A person’s employment is an essential component of his or her sense of identity, self-worth and emotional well-being.

This passage was subsequently cited with approval by this Court in Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986, at p. 1002, and in Wallace, supra, at para. 95. In Wallace, the majority added to this notion by stating that not only is work itself fundamental to an individual’s identity, but “the manner in which employment can be terminated is equally important”.

…

57 Based on the foregoing considerations, I favour an analytical framework that examines each case on its own particular facts and circumstances, and considers the nature and seriousness of the dishonesty in order to assess whether it is reconcilable with sustaining the employment relationship. Such an approach mitigates the possibility that an employee will be unduly punished by the strict application of an unequivocal rule that equates all forms of dishonest behaviour with just cause for dismissal. At the same time, it would properly emphasize that dishonesty going to the core of the employment relationship carries the potential to warrant dismissal for just cause.

Remedies

One of the major differences between, for example, an action for wrongful dismissal and a s. 240 complaint is the remedies available to adjudicators. The traditional award for wrongful dismissal is damages measured by reasonable notice.[8] Some adjudicators have followed that approach. The policy underlying s. 240 is to make the successful complainant “whole.” Re-instatement, despite being granted sparingly, is the presumptive remedy under s. 240.[9]

Section 242(2) provides the adjudicator with broad remedial powers:

(4) Where an adjudicator decides pursuant to subsection (3) that a person has been unjustly dismissed, the adjudicator may, by order, require the employer who dismissed the person to

(a) pay the person compensation not exceeding the amount of money that is equivalent to the remuneration that would, but for the dismissal, have been paid by the employer to the person;

(b) reinstate the person in his employ; and

(c) do any other like thing that it is equitable to require the employer to do in order to remedy or counteract any consequence of the dismissal.

Barnacle, Wood and England[10] refer to a useful checklist of factors to consider in determining whether re-instatement is an appropriate remedy:

Adjudicator Steele has provided a useful checklist of exceptional circumstances that dates from 1991, but continues to be widely applied today:

The deterioration of personal relations between the complainant and management or other employees;
The disappearance of the relationship of trust which must exist in particular when the complainant is high up in the company hierarchy;
Contributory fault on the part of the complainant justifying the reduction of his dismissal to a lesser sanction;
An attitude on the part of the complainant leading to the belief that reinstatement would bring no improvement;
The complainant’s physical inability to start work again immediately;
The abolition of the post held by the complainant at the time of his dismissal;
Other events subsequent to the dismissal making reinstatement impossible, such as bankruptcy or lay-offs.²⁰

It is clear that the adjudicator will require strong evidence that reinstatement is unsuitable before denying that remedy to a claimant who requests it.

A successful claimant will be compensated for loss of earnings. That can be expressed, somewhat crudely, as reflecting the difference between what the employee would have earned but for the dismissal, and what the employee did earn because of the dismissal (for example, though replacement employment). This could take into account wage increases and benefits the employee would have received, had he or she continued in the position. It could also take into account loss of earnings because the employer closed its operations, or the employee became disabled, and, as a result did not suffer a wage-loss.

It follows from the presumptive remedy of re-instatement that the period for which the employee is to be compensated is lost earnings up to the time of re-employment. Given the rough upper ceiling on wrongful dismissal damages based on Bardal of 22-24 months, s. 240 may potentially provide a dismissed employee with substantially higher monetary compensation.

Adjudicators also compensate for a wide range of losses and injuries, including loss of employee benefits.

Most adjudicators have refused to award punitive damages because the nature of the “make-whole” principle is compensation.

Most adjudicators have refused to award client-solicitor costs.

One of the important features of the adjudicator’s ability to fashion a remedy that is appropriate for the particular circumstances, taking into account such things as:

the employee’s culpability, and deducting sums reflecting the degree to which the employee is partially at fault; and
the employee’s mitigation or failure to mitigate (the employer has the burden of proof).

Procedural Issues

There are certain procedural problems in s. 240 complaints.

Section 242(2) provides:

(2) An adjudicator to whom a complaint has been referred under subsection (1)

(a) shall consider the complaint within such time as the Governor in Council may by regulation prescribe;

(b) shall determine the procedure to be followed, but shall give full opportunity to the parties to the complaint to present evidence and make submissions to the adjudicator and shall consider the information relating to the complaint; and

(c) has, in relation to any complaint before the adjudicator, the powers conferred on the Canada Industrial Relations Board, in relation to any proceeding before the Board, under paragraphs 16(a), (b) and (c).

Section 16 provides, in part:

The Board has, in relation to any proceeding before it, power

(a) to summon and enforce the attendance of witnesses and compel them to give oral or written evidence on oath and to produce such documents and things as the Board deems requisite to the full investigation and consideration of any matter within its jurisdiction that is before the Board in the proceeding;

(b) to administer oaths and solemn affirmations;

(c) to receive and accept such evidence and information on oath, affidavit or otherwise as the Board in its discretion sees fit, whether admissible in a court of law or not;

Unlike the Canada Industrial Relations Board, adjudicators lack the power to order pre-hearing production of documents. When the Code was amended, the CIRB was specifically given that power and adjudicators were not.[11]

Review of Adjudicators’ Decisions

The Code contains a strong privative clause. S. 243 reads:

(1) Every order of an adjudicator appointed under subsection 242(1) is final and shall not be questioned or reviewed in any court.

(2) No order shall be made, process entered or proceeding taken in any court, whether by way of injunction, certiorari, prohibition, quo warranto or otherwise, to question, review, prohibit or restrain an adjudicator in any proceedings of the adjudicator under section 242.

The court will not show deference on jurisdiction and some other questions of law. The standard of review on questions within the adjudicator’s jurisdiction is now subject to a “reasonableness” standard (Dunsmuir v. New Brunswick, [2008] 1 S.C.R. 190).

Reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision making process. It is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law. (Li Min (“Amanda”) Wu v. Royal Bank of Canada, 2009 FC 933)

Summary – Concluding Remarks

[1] A useful discussion and overview of substantive and procedural issues can be found in Barnacle, Wood and England, Employment Law in Canada (LexisNexis)

[2] See, for example, Re Rizzo and Rizzo Shoes Ltd., [1998] S.C.J. No. 2.

[3] Barnacle et al., above, §§ 17.63.

[4] Barnacle et al., above, §§ 17.66.1.

[5] Barnacle et al., above, § 17.136.

[6] Barnacle et al., above, §§ 17.86 – 87.

[7] In Bell Canada, the Pratte J. noted: However, his duty was then to make a judgment on whether the dismissal procedure used by the employer, taken by itself, was fair or unfair regardless of the procedure described in the directives; and if the adjudicator concluded that the procedure used in the case at bar was unfair in itself, and that because of this the dismissal had been unfair, he should then in determining the compensation to which the respondent was entitled as a consequence of the dismissal have taken into account the fact that, though premature, the dismissal was not entirely groundless.

[8] Bardal v. Globe and Mail Ltd., [1960] O.J. No. 149, 24 D.L.R. (2d) 140 (H.C.).

[9] But see Defence Construction Canada Ltd. v. Girard, [2005] F.C.J. No. 1468, where the court overturned the re-instatement. The court noted:

71 “Unfortunately, I am not persuaded that he was not unduly influenced in his decision by his initial premise that he had to order reinstatement if the relationship of trust was not irremediably broken. In doing so, he clearly committed an error in law that may have had some impact on the final outcome of the case. For this reason, it seems to me that the case should be returned to him so that he can assess the appropriate relief without applying the wrong presumption, but by taking into account only some factors that are generally considered, a useful list of which are found in the work by Geoffrey England, Roderick Wood and Innis Christie, Employment Law of Canada, 4th ed., vol. 2 (LexisNexis Butterworths, looseleaf edition), at paragraph 17.153.”

[10] Barnacle et al., above, § 17.153.

[11] 16 provides: (f.1) to compel, at any stage of a proceeding, any person to provide information or produce the documents and things that may be relevant to a matter before it, after providing the parties the opportunity to make representations;