On July 14 the Supreme Court of Canada released its long-awaited decision in Wilson v. Atomic Energy of Canada Ltd., 2016 SCC 29 (CanLII), dealing with the unjust dismissal provisions of the Canada Labour Code. In a 6 – 3 decision, the majority concluded that the scheme of the legislation was to ensure that non‑unionized federal employees would be entitled to protection from being dismissed without cause, in a manner similar to employees covered by a collective agreement. This is consistent with the approach adopted by the vast majority of adjudicators since the 1978 amendments to the Code.
The basic facts of the case are set out concisely in the headnote:
“W worked as an Administrator for his employer for four and a half years until his dismissal in November 2009. He had a clean disciplinary record. He filed an “Unjust Dismissal” complaint, claiming that his dismissal was in reprisal for having filed a complaint of improper procurement practices on the part of his employer. In response to a request from an inspector for the reasons for W’s dismissal, the employer said he was “terminated on a non‑cause basis and was provided a generous dismissal package”. A labour adjudicator was appointed to hear the complaint. The employer sought a preliminary ruling on whether a dismissal without cause together with a sizeable severance package meant that the dismissal was a just one. The Adjudicator concluded that an employer could not resort to severance payments, however generous, to avoid a determination under the Code about whether the dismissal was unjust. Because the employer did not rely on any cause to fire him, W’s complaint was allowed. The Application Judge found this decision to be unreasonable because, in his view, nothing in Part III of the Code precluded employers from dismissing non‑unionized employees on a without‑cause basis. The Federal Court of Appeal agreed, but reviewed the issue on a standard of correctness.”
Abella J. delivered the judgment (concurred in by McLachlin C.J. and Karakatsanis, Wagner and Gascon JJ), noting that the standard of review of labour adjudicators was “reasonableness.” The issue before the court was “whether the Adjudicator’s interpretation of ss. 240 to 246 of the Code was reasonable” (Para. 39).
The unjust dismissal scheme was introduced in the 1978 amendments of the Code. Abella J. considered the intentions of Parliament and referred to the comments of the Minister of Labour at the time and noted (Para. 44):
“44. The references in this statement to the right of employees to “fundamental” protection from arbitrary dismissal and to the fact that such protection was “already a part of all collective agreements”, make it difficult, with respect, to draw any inference other than that Parliament intended to expand the dismissal rights of non-unionized federal employees in a way that, if not identically, then certainly analogously matched those held by unionized employees.”
Abella J. also noted the comments of the Minister of Labour that adjudicators would be guided by “the extensive arbitral jurisprudence from organized labour” (Para. 45). The unjust dismissal scheme had, as well, been interpreted scholars and almost all adjudicators in that manner (Para. 59-61). The 2006 review of the Code by Professor Arthurs confirmed that the goal of the unjust dismissal scheme was to provide non-unionized federal employees with protection “somewhat comparable to that enjoyed by unionized workers under collective agreements.” They can only be dismissed for “just cause.”
Abella J. noted:
“47. The effect of the 1978 amendments was to limit the applicability of the notice requirements in s. 230(1) and the minimum severance provisions in s. 235(1) to circumstances that fell outside the Unjust Dismissal provisions. The notice and severance pay requirements under ss. 230(1) and 235(1), for example, apply to managers, those who are laid off due to lack of work or discontinuance of a function, and, in the case of s. 230(1), employees who have worked for the employer for more than three consecutive months but less than 12 months. In other words, ss. 230(1) and 235(1) are not an alternative to the Unjust Dismissal provisions in ss. 240 to 246, they apply only to those who do not or cannot avail themselves of those provisions: Redlon Agencies, at paras. 38-39; Wolf Lake First Nation v. Young, (1997), 1997 CanLII 5057 (FC), 130 F.T.R. 115, at para. 50.” [Emphasis added]
Abella J. referred to the seminal decision in Roberts v. Bank of Nova Scotia (1979), 1 L.A.C. (3d) 259, as illuminating what is generally understood by the terms “just cause” and “unjust dismissal” (Para. 53):
“…. when Parliament used the notion of “unjustness” in framing [ss. 240 to 246], it had in mind the right that most organized employees have under collective agreements — the right to be dismissed only for “just cause”. I am of this view because the common law standard is simply “cause” for dismissal whereas “unjust” denotes a much more qualitative approach to dismissal cases. Indeed, in the context of modern labour relations, the term has a well understood content — a common law of the shop if you will .… . But having said that, I do not deny that the statute is silent on a whole host of important considerations that will, in any particular case, affect the precise meaning to be given to “justness”. … (References omitted)
“Unjust dismissal” incorporates the notion of “progressive discipline.”
Abella concluded that the common law of wrongful dismissal had been replaced:
“63. In fact, the foundational premise of the common law scheme — that there is a right to dismiss on reasonable notice without cause or reasons — has been completely replaced under the Code by a regime requiring reasons for dismissal. In addition, the galaxy of discretionary remedies, including, most notably, reinstatement, as well as the open-ended equitable relief available under s. 242(4)(c), are also utterly inconsistent with the right to dismiss without cause. If an employer can continue to dismiss without cause under the Code simply by providing adequate severance pay, there is virtually no role for the plurality of remedies available to the adjudicator under ss. 240 to 245.
…
- AECL’s argument that employment can be terminated without cause so long as minimum notice or compensation is given, on the other hand, would have the effect of rendering many of the Unjust Dismissal remedies meaningless or redundant. …. Only by interpreting ss. 240 to 246 as representing a displacement of the employer’s ability at common law to fire an employee without reasons if reasonable notice is given, does the scheme and its remedial package make sense.”
In the result, the Supreme Court of Canada restored the adjudicator’s decision.