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Nelligan O'Brien Payne gratefully acknowledges the contribution of Stéphane Serafin, Student-at-Law in writing this blog post.

On July 9, 2015, the Supreme Court of Canada granted leave to appeal from the Federal Court of Appeal decision in Wilson v. Atomic Energy of Canada Limited (“Wilson”), a case dealing with section 240 of the Canada Labour Code (“CLC”). That provision reads as follows:

240.     (1) Subject to subsections (2) and 242(3.1), any person

(a) who has completed twelve consecutive months of continuous employment by an employer, and

(b) who is not a member of a group of employees subject to a collective agreement,

may make a complaint in writing to an inspector if the employee has been dismissed and considers the dismissal to be unjust.

(2) Subject to subsection (3), a complaint under subsection (1) shall be made within ninety days from the date on which the person making the complaint was dismissed.

(3) The Minister may extend the period of time referred to in subsection (2) where the Minister is satisfied that a complaint was made in that period to a government official who had no authority to deal with the complaint but that the person making the complaint believed the official had that authority.

In Wilson, the Court of Appeal was asked to determine if a dismissal without cause was necessarily unjust within the meaning of the above provision, regardless of whether or not the employer had made the proper payments – be they reasonable notice at common law or the statutory minimums pursuant to the CLC – to the dismissed employee. An affirmative answer would have effectively prevented employers governed by the CLC from terminating employees without cause, as a successful complaint would give an employee who was terminated in such a way the right to seek reinstatement.

Ultimately, the Federal Court of Appeal upheld the original arbitral decision, finding that Parliament could not have intended to give section 240 of the CLC that effect. Indeed, the above provision needed to be read in conjunction with other parts of the CLC that prescribe minimum notice and statutory severance to those employees who are terminated without cause. According to the Court of Appeal, these provisions made little sense if section 240 prevented without cause dismissals.

Canada’s highest court has now set the stage to decide this issue once and for all, thereby settling the controversy that has surrounded the proper interpretation of section 240 of the CLC since its enactment. At the same time, the Court’s ultimate decision may offer guidance with respect to similar provisions found in employment standards legislation in other provinces, such as in Quebec, where section 124 of An Act Respecting Labour Standards provides a very similar mechanism with respect to unjust dismissals.

In both cases, the legislative provision provides for a remedy that is not traditionally available at common law – reinstatement. This leaves employers particularly vulnerable to unjust dismissal claims: if successful, the employer may be liable for the entirety of an employee’s lost wages pending his or her reinstatement. This issue does not arise under Ontario law. Here, an employee is instead limited to claiming for the applicable notice and severance pursuant to the terms of his or her contract, which could be nothing more than the minimum entitlements as found in the Employment Standards Act, 2000, or reasonable notice at common law.

None of the above has changed following the Federal Court of Appeal decision in Wilson, nor are changes likely to occur provincially when the Supreme Court of Canada finally weighs in on the particular point of controversy noted above. The Court’s ultimate decision has not – and should not – affect an employee’s rights and an employer’s liabilities if they fall within a provincial scheme.

Indeed, notwithstanding this particular controversy, an employee whose employment is governed by the CLC will undoubtedly remain able to file a complaint where the employer has not provided the proper notice and severance, where applicable, or reasonable notice, or where the employer claims dismissal for cause when none exists. As such, employers should still be wary of section 240 of the CLC even if the Supreme Court of Canada ultimately upholds the Federal Court of Appeal’s decision in Wilson, and ensure that they provide the proper payments to any employee they wish to terminate without cause.

This content is not intended to provide legal advice or opinion as neither can be given without reference to specific events and situations. © 2021 Nelligan O’Brien Payne LLP.

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