Bennett Jones
The Supreme Court of Canada granted leave to appeal in Wilson v Atomic Energy of Canada Ltd. Federally regulated employers hoping that this important decision from the Federal Court of Appeal was the final word on the law of without cause dismissals of non-union employees under the Canada Labour Code will need to wait for the Supreme Court of Canada to provide clarity.
Joseph Wilson worked for AECL for 4½ years. In November 2009, AECL terminated his employment without cause and offered him six months' pay as severance (which is well in excess of the statutory minimum of 18 days he was entitled to under the Canada Labour Code) in exchange for Wilson signing a release of all claims against AECL. Wilson refused to sign the release and filed a complaint under the Code. AECL continued Wilson's salary and benefits for six months, effectively paying him the severance it previously offered.
Wilson argued that federally-regulated, non-unionized employees cannot be dismissed without cause. In his view, AECL could only dismiss him if it had just cause or one of the specific statutory exceptions were met (e.g., lack of work or a discontinuance of his function). Otherwise, the dismissal was necessarily unjust, and he is entitled to reinstatement and back wages. In other words, Wilson effectively argued that the Code provides him, like unionized employees, a "right to a job". The adjudicator agreed.
But the Federal Court and Federal Court of Appeal adopted a different view. In their view, the Code should be interpreted such that an employer can dismiss a federally-regulated, non-unionized employee without cause so long as it provides sufficient notice and severance pay. If the notice and severance pay are insufficient or the employer is discriminating or reprising against the employee by dismissing him, the employee can allege an unjust dismissal and make a complaint under the Code (not unlike the common law regime at the provincial level). If the adjudicator finds that the dismissal was "unjust" (after considering the circumstances of the dismissal and the amount of notice and severance pay), then it can order reinstatement, back wages or other remedies.
The Federal Court of Appeal's decision seemed to put to rest a long-simmering debate over this issue by concluding that a federally-regulated, non-unionized employee can be dismissed without cause. But, pending the Supreme Court of Canada's decision (which likely won't be released until mid-2016), there will continue to be some uncertainty for employers, employees and adjudicators. In the meantime, federally-regulated employers may decide to terminate employees without cause for reasons other than lack of work or discontinuance of function, but should be mindful of the risk that such a termination still be challenged under the unjust dismissal provisions of the Code depending on how the Supreme Court rules.