eCaseNote 2016 No. 05

Union Protection for Non-Unionized, Federally-Regulated Employees

Wilson v. Atomic Energy of Canada Ltd., 2016 SCC 29

At common law, a non-unionized employee can be dismissed without just cause if he or she is given reasonable notice or pay in lieu of reasonable notice. However, a recent decision by the Supreme Court of Canada has established an exception to that common law rule by holding that non-unionized, federal employees cannot be dismissed without just cause.

In Wilson v. Atomic Energy, the Supreme Court of Canada affirmed that the “Unjust Dismissal” provisions (ss. 240-246) of the Canada Labour Code do not permit the termination of nonunionized, federally-regulated employees without cause. Additionally, the Court confirmed that an employer cannot rely on reasonable notice or pay in lieu of reasonable notice as a defence.

Joseph Wilson worked as an administrator for Atomic Energy of Canada Ltd. for four and half years before he was dismissed without cause. Wilson had no disciplinary record and was offered a severance package. Following his dismissal, Wilson filed an unjust dismissal complaint under the Canada Labour Code which allows an adjudicator to determine whether the dismissal was just – this scheme is accessible to non-unionized employees who have completed 12 consecutive months of continuous employment. Atomic Energy argued that an adjudicator should not hear the complaint because Wilson received a reasonable severance package that exceeded what was required by the Code. The adjudicator held that the Code only permitted dismissal for cause regardless if the employer gave reasonable notice, pay in lieu of reasonable notice, and/or a severance package. Atomic Energy challenged the adjudicator’s decision.

The Supreme Court of Canada determined that under the Canada Labour Code, an adjudicator has the right to review every dismissal, even if it is without cause and a reasonable severance package is paid. Additionally, if an adjudicator has deemed a dismissal unjust, he or she has the right to reinstate an employee or create another remedy.

The result of the Court’s decision provides protections to non-unionized, federally-regulated employees akin to protections available to unionized employees. Employees who work in banking, marine shipping, air transportation, telephone and cable companies, and radio and television broadcasting, among others, are federally-regulated. It is important for employers to remember that employees may still pursue the common law remedy of reasonable notice or pay in lieu thereof in the civil courts instead of availing themselves of the dismissal provisions in the Code. However, if an employee files an unjust dismissal complaint under the Code, an employer cannot rely on having provided reasonable notice or pay in lieu of reasonable notice as a defence.

It is also important for employers to know that the “Unjust Dismissal” complaint scheme under the Code is only available to non-unionized, federally-regulated employees who have worked continuously for more than 12 consecutive months and have submitted their complaint in writing to an inspector within 90 days of their dismissal. It is in the best interests of employers to adopt the practice of conducting performance reviews of non-unionized, federally-regulated employees before the 12 month benchmark to ensure they want to continue the employment relationship. If the performance review is unfavourable, the employer may want to sever the relationship before the “Unjust Dismissal” scheme becomes accessible to the employee.

The comments contained in this eCaseNote provide general information only and should not be construed as legal advice or opinion. For more information or specific advice on matters of interest, please call our offices at (709) 579-2081.