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Employers: be cautious when terminating your employees
It is well known that as an employer, you can terminate the employment of any employee in your workplace at any time and for any reason (so long as the reason is not contrary to the Human Rights Code) on a ‘without cause’ basis, as long as you have provided the employee with notice of their termination in accordance with their contract of employment or the common law. However, a recent Supreme Court decision has challenged this common law rule, giving non-unionized federally regulated employees job protections similar to those of unionized workers.
In Wilson v. Atomic Energy Canada Ltd., the employee Wilson worked as an administrator for his employer, Atomic Energy of Canada Ltd. (“AECL”) for 4½ years until the termination of his employment in November 2009. Because Wilson had a clean disciplinary record and did not believe the basis for his termination was fair, he filed an “unjust dismissal” complaint under the Canada Labour Code (“CLC”), claiming that his termination was a reprisal for his raising an issue about the procurement practices of AECL.
Prior to the Supreme Court’s ruling (released in July 2016), a termination could not be ‘unjust’ if the dismissed employee was provided with a termination package that reflected his/her legal entitlements. However, with its decision, the Supreme Court has effectively prohibited employee terminations for federally regulated employees where there isn’t just cause or a business/economic reason for the termination. Furthermore, federally regulated employees are now entitled to reasons for the termination.
Practically, the decision means that non-unionized federally regulated employees with at least 12-months of service who are terminated (whether with or without cause), and who believe that the termination is unjust, can make a written complaint to the Canada Labour Code’s Labour Program Office. The Labour Program Office will investigate the dismissed employee’s complaint and if it is determined that the termination was not for ‘just cause’ or for a bona fide business reason, terminated employees can be reinstated to their prior job and compensated not only for lost wages, but also for all losses attributable to the termination.
The decision in Wilson v. Atomic Energy has made terminating federally regulated employees without cause much more complicated. Therefore, employers under the jurisdiction of the Canada Labour Code should seek the advice and assistance of an employment lawyer well before they carry-out any termination plans.
Provincially regulated employers in Ontario may fare better because the Employment Standards Act does not have a similar ‘unjust dismissal’ provision. However, even without an unjust dismissal provision, employee terminations can be rife with hazards, creating legal problems for employers.
Join us on Thursday October 20, 2016 at 9:00am for Advocation’s “Training Thursdays” complimentary webinar – a link to the registration page can be found here. The topic is “Do’s and Don’ts of Employee Terminations” and we will delve into best practices to minimize wrongful dismissal complaints in your workplace.
Archived materials from the webinar will be available to registrants after the live event. So even if you can’t attend live, register anyway to ensure you receive a playback link and webinar material.