Non-unionized employees working for a federally regulated employer can now breathe a little easier: Canada’s highest court has confirmed that they cannot be terminated on a without cause basis. A federally regulated employer must have just cause to terminate an employee.
The Supreme Court of Canada’s recent landmark decision in the area of employment law, Wilson v. Atomic Energy of Canada Limited, impacts approximately half a million non-unionized employees working in banks, airlines, telecommunications and for other federally regulated employers such as the Atomic Energy of Canada Limited.
In 1978, the unjust dismissal provisions under the Canada Labour Code (the “Code”) were introduced to ensure that non-unionized federal employees would be entitled to protection from being dismissed without cause. These provisions of the Code were intended to provide non-unionized employees with protections similar to those available to unionized employees.
It is now clear that employers subject to the Code cannot dismiss someone on a without cause basis –unlike the common law regime which permits termination of employment without cause provided the employee received reasonable notice.
Where no cause exists, an employee can bring a complaint for unjust dismissal under the Code. A generous severance package without cause is not enough and is contrary to the Code’s legislative provisions. The limited circumstances in which a complaint cannot be considered include lay offs because of lack of work or discontinuance of a function, more commonly referred to as downsizing or restructuring.
This substantial right to job security is good news for federally regulated employees and returns the state of the law to where it had arguably been for many decades prior to the Federal Court of Appeal’s decision rendered last year.