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Apr 26, 2021
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Many employees in federally regulated workplaces are protected from unjust dismissal. This means that an eligible employee’s employment cannot be terminated unless the employer can provide a reason for the dismissal.[1]  It also means that, if an insufficient reason is given, the employee could be given their job back.

In this blog post, we explain (1) how to determine whether your employer is federally regulated, and (2) how the protection against unjust dismissal operates.

(1) What is a federally regulated workplace?

In Canada, the regulation of working conditions, including the rules governing the termination of the employment relationship, is divided between the provincial, federal, and territorial governments.

The vast majority of employment relationships fall under provincial jurisdiction. This means that in Ontario, most employers are subject to Ontario's Employment Standards Act, 2000 (“ESA”). For more information on your rights under the ESA, see our blog post on the law of notice in Ontario.

A small number of employers operating in Ontario are subject to the Canada Labour Code (“CLC”). The CLC applies to federally regulated employers throughout Canada, including:

  • airlines, airports, and other businesses engaged in air transportation services
  • banks
  • First Nations band councils
  • most federal Crown corporations such as Canada Post
  • businesses engaged in radio and television broadcasting
  • businesses providing telecommunications services, such as telephone, Internet, and cable systems, and
  • businesses providing road, maritime, or rail transportation services that cross provincial or international borders

It may not always be clear whether the ESA or CLC applies, and employers and employees might have different views on this issue. It's a good idea to speak with a lawyer if you have questions about this.

(2) How does the unjust dismissal protection work?

A claim for unjust dismissal is available to any non-management employee of a federally regulated employer who has completed 12 consecutive months of service and who is not covered by a collective agreement.

Employees covered may file a complaint alleging unjust dismissal if they feel their employment has been unfairly terminated. They must file this complaint within 90 days of their dismissal. The employer is required to provide written justification for the dismissal upon request.

If an employee files an unjust dismissal complaint, an adjudicator appointed under the CLC must determine whether or not the dismissal was in fact "unjust". The answer to this question will depend on the facts of each case, and must be tied to the reasons the employer provided at the time of termination. For example, if an employee is terminated for misconduct, the employer will usually be required to demonstrate that a system of progressive and corrective discipline was used before the decision to dismiss the employee was made.[2] Where an employer cites lack of work or discontinuance of a job function as the reason for dismissing an employee, the employer must: (1) demonstrate that there was a real economic justification for the dismissal, and (2) provide a reasonable explanation for choosing a particular employee to be dismissed.[3]

If an unjust dismissal claim is successful, the employer may be ordered to reinstate the employee and/or pay compensation for lost wages. The employer may also be ordered pay the employee’s legal costs, clear an employee's record of any references to the dismissal, and take any other action deemed necessary to compensate for the effects of the unjust dismissal. When fashioning a remedy, the adjudicator will consider all the facts surrounding the dismissal and any aggravating or mitigating factors raised in the circumstances. In rare circumstances, an adjudicator might find that the employee was unjustly dismissed but that reinstatement is not possible. In these cases, the adjudicator must fashion a remedy that appropriately compensates the employee for their loss of the right to reinstatement. This is a complicated discussion and will be the subject of a future blog post.

(3) Is the unjust dismissal process my only remedy?

Employees may not want to seek reinstatement and may instead prefer to commence an action for wrongful dismissal damages before the courts.

There are many reasons an employee may choose to file a wrongful dismissal action rather than an unjust dismissal complaint. For example, the timelines are different: you have up to two years to file a wrongful dismissal claim, which is much longer than the 90 days prescribed by the CLC.

However, you should be aware that the civil courts cannot order reinstatement, so your damages would be monetary only. You should consult a lawyer if you have questions about whether you should file an unjust dismissal complaint or a wrongful dismissal action.

Conclusion

The CLC unjust dismissal protection offers a potentially powerful remedy to eligible employees. However, determining whether the CLC applies, what remedies could be available, and how to contest your dismissal can be complicated. The relatively short deadlines to file a complaint under the CLC leave little room for error.

As a result, you should consult a lawyer to review your options if you have been dismissed. Call 416.964.1115 to speak to one of our employment lawyers or request a consultation online.

 

Special thanks to articling student Cole Eisen for his assistance in drafting this post.

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