The question of whether section 240 of the Canada Labour Code (Code) permits dismissal on a without cause basis, or if instead it provides just cause protection similar to that provided under collective agreements, has divided adjudicators’ jurisprudence for a very long time. The answer to the question would depend on the particular adjudicator and which statutory interpretation that adjudicator subscribed to. A recent decision of the Federal Court of Appeal provides a very welcome resolution to this “persistent discord” in the jurisprudence and, subject to an appeal to the Supreme Court of Canada, should represent the definitive interpretation of section 240 going forward.
In Joseph Wilson v. Atomic Energy of Canada Limited (January 22, 2015) the Federal Court of Appeal confirmed a lower court ruling that section 240 of the Code does not confer a “right to the job” on federally-regulated non-union employees. Instead, an employer is permitted to dismiss such employees without cause, provided that the employer provides notice or severance pay in accordance with common law principles.
Readers of Focus will recall the earlier judicial review decision of the Federal Court which rejected an adjudicator’s interpretation that section 240 of the Code places unionized and non-unionized employees in the same position by protecting non-unionized employees from being dismissed without cause (see Federal Court clarifies protections afforded to employees under the Canada Labour Code). The Federal Court of Appeal accepted the Federal Court’s reasons and interpretation of the Code and added that adjudicators nevertheless have the jurisdiction to determine whether a dismissal was “unjust”. In doing so, adjudicators must pay heed to the well-established common law and arbitral cases concerning dismissal, as well as the accepted principles of statutory interpretation.
Employers falling within federal jurisdiction will be pleased with the Federal Court of Appeal’s decision and the clarification to the interpretation of the Code. Such employers may still face claims of unjust dismissal, but this decision indicates that such claims will be determined using common law principles.