Unjust Dismissal – Canada Labour Code

Written on behalf of Peter McSherry

Federal Judge Reviews Unjust Dismissal Remedy

A recent decision of the Federal Court of Canada[1] illustrates the tremendous power of the Unjust Dismissal remedy under the Canada Labour Code.

Who Qualifies

This relief is available only to those persons employed in federally regulated businesses. The most well-known of such companies are banks, inter-provincial transportation companies, airlines, radio and television stations and agencies of the federal government.

To be eligible for this remedy, the employee must be employed for over 12 months and not be employed as a manager, a term which has been very conservatively defined to the employee’s favour.

What’s Different?

In the usual action for damages for termination of employment, the judge is faced with one of two stark alternatives when just cause is alleged, that is whether there is just cause or no just cause.

This is not the case in an Unjust Dismissal case under the federal Code. The adjudicator, or judge, has complete flexibility in determining the issue of just cause. He or she can, for example, find that the employee has done something worthy of discipline, yet not serious enough to warrant termination of employment.

This is a very important distinction between this type of remedy and the common law wrongful dismissal case. The employee often is encouraged to admit the wrongdoing and show how he or she is determined to improve his or her performance to succeed in the case. This is the exact opposite approach of a wrongful dismissal case in which the employee is usually put into the position of disputing all allegations of wrongdoing.

This discretion in fashioning the remedy is also coupled with the possible order of reinstatement and back wages. These factors make the Unjust Dismissal case a serious remedy in favour of the employee.

What Happened Here?

These factors are well illustrated in the above case. The employee was a Customer Service Supervisor, and was terminated based on the assertion that she had failed to supervise her subordinates, resulting in certain financial irregularities.

The adjudicator agreed that there were performance issues proven but determined that the correct discipline was a suspension for one week. Reinstatement was ordered to a lower level position of Customer Service Representative plus back wages. Presuming this decision ends the case, the wage arrears would be roughly 3 years and 9 months.

Not only does the decision show the ability of the Adjudicator to “grade” the cause allegations, but also the extent of the financial recovery, which clearly exceeds what a judge in court would have awarded.

Get Advice, Then Act

If you are facing termination and are in a federally regulated business, get advice on your rights. You need to understand the law before you take action.

If you have questions about such employment issues, contact the offices of Guelph employment lawyer Peter McSherry. We can guide you through the issues, help you understand your rights, and defend your position. Contact us online or by phone at 519-821-5465 to schedule a consultation

[1] Bank of Nova Scotia v Randhawa, a decision of the Federal Court reviewing and upholding in part the decision of the Adjudicator. The issue of costs was sent back to the Adjudicator.