Employment law: a dismissal without cause does not necessarily constitute a wrongful dismissal

In a decision rendered in January 2014, the Federal Court of Appeal decided that a dismissal without just and sufficient cause does not necessarily constitute a “wrongful dismissal” within the meaning of the Canada Labour Code. In rendering this decision, the Federal Court of Appeal overturned the legal trend currently recognized by the court system, according to which an employee subject to the Canada Labour Code cannot be dismissed, unless the dismissal is backed by a just and sufficient cause, a work shortage or the elimination of the position (Wilson v. Atomic Energy of Canada ltee, 2015 FCA 17 (CanLII)).

THE FACTS           

Wilson was employed by Atomic Energy of Canada Limited (hereafter “AECL”) as a supply supervisor for four and a half years. In November 2009, he was dismissed without cause and was offered, by his former employer, a severance package covering roughly six months’ salary. He refused this package.

Believing to be wrongfully dismissed, Wilson filed a complaint against his former employer in accordance with section 240 of the Canada Labour Code. During the six-month period preceding the nomination of an arbitrator, Wilson continued to collect a salary. Ultimately, the amount offered to him by way of the severance package was entirely received.

During the arbitration of the complaint, Wilson argued that by sanctioning all “wrongful dismissals”, the Canada Labour Code prohibited federal employers from dismissing an employee without a just and sufficient cause, an argument that was ultimately upheld by the arbitrator. 

This decision was later overturned by the Federal Court at the request of the AECL. Unsatisfied with the new decision rendered, Wilson appeals it before the Federal Court of Appeal.

THE FEDERAL COURT OF APPEAL’S DECISION

After having considered the arguments invoked by both parties, the Federal Court of Appeal dismisses the appeal and draws the following conclusions :

1.    The Canada Labour Code allows for dismissals without cause, as such dismissals do not necessarily imply a “wrongful dismissal”.

2.    In order to determine whether a dismissal is wrongful or not, the nominated arbitrator must examine the circumstances surrounding every particular case.

3.    The Canada Labour Code does not recognize a federal employee’s “right to work”.

4.    On the contrary, the Canada Labour Code expressly gives federal employers the right to dismiss an employee, even without cause, but requires that such a dismissal be preceded by a notice or an indemnity in lieu thereof.  

5.    The arbitrators nominated in accordance with the Canada Labour Code must determine whether or not a dismissal, with or without cause, is wrongful in the circumstances. 

6.    Even an employee who has already benefited from a severance package can be awarded additional damages if the arbitrator deems the dismissal to be wrongful.

THE LESSONS TO BE LEARNED

1.    If only dismissals with cause were allowed by the Canada Labour Code, this particularity would have been specifically provided in the legislation.

2.    A federal employer can legally dismiss an employee without cause.

3.    A reasonable notice must be provided to the federal employee dismissed. Dubé Légal inc., Montréal employment law lawyers.