While most employees in Canada who seek damages for being dismissed from their job unfairly will bring an action for wrongful dismissal, those who are employed in federally-regulated industries have a unique scheme to follow. Rather than “wrongful dismissal”, the Canada Labour Code (the “Code”) offers the remedy of unjust dismissal to all non-managerial employees with more than 12 months of employment. A significant differentiating factor between the two concepts lies in the remedies offered for a legitimate claim. While wrongful dismissal will generally result in additional compensation for a specified notice period, a common remedy for unjust dismissal is reinstatement to the role.
Unjust Dismissal Claims: How They Work
In order to claim unjust dismissal, an employee is required to bring a complaint at a Labour Program office within 90 days of their termination. An inspector will attempt to work with the parties to resolve the matter, and if they are unsuccessful, the matter may be referred to an adjudicator.
An adjudicator appointed under the Code to hear the case has more diverse remedy options available to them than a judge in a civil court hearing a wrongful dismissal case. In the latter instance, there is one winner and one loser, as it is an all-or-nothing contest.
The Code adjudicator has more precision tools at their disposal. They may determine that there has been “partial” misconduct on behalf of the employee and that while there is insufficient cause to justify termination, some form of discipline is warranted. They may order the employee to be reinstated, or order that the employer pay lost wages while upholding the termination, or any other remedy that is just in the circumstances.
Reinstatement is Not a Guarantee
The remedy of reinstatement is obviously a powerful one. It does not follow, however, that it is a default remedy awarded in every case. Much to the contrary, reinstatement is very much a discretionary remedy under the Code. This point was recently confirmed by the Federal Court in Kouridakis v. CIBC.
In this case, a person who had been employed with a bank for over 15 years was terminated. The reasons cited for the termination were unprofessional and inappropriate conduct in the workplace, as well as violent and inappropriate behaviour towards his manager. He and his manager had a contentious relationship that came to a head during an incident in which they argued and the employee touched the manager’s arm and the manager yelled at the employee for touching her. The adjudicator found in favour of the employee with respect to his claim for unfair dimsissal but declined to order reinstatement as the appropriate remedy, noting that the working relationship between the employee and employer had become untenable. The employee sought judicial review of this decision.
Judicial Review and The Sherman Factors
When determining the employee’s right to reinstatement, the court looked to principles that had been established in a 2012 adjudication decision called Bank of Montreal v. Sherman. In that decision, the judge set out a list of seven factors that would justify a decision not to order reinstatement for unjust dismissal. Of the seven factors, the judge in the case at hand found that two were particularly applicable. One being the deterioration of the employment relationship, and the second being the attitude of the complainant. Given those two factors, the court agreed with the adjudicator that the most appropriate remedy would be monetary.
The Federal Court further noted:
The fact that reinstatement may have been determined to be the appropriate remedy more often not does not mean that it becomes the norm or somehow becomes the standard to be deviated from only in exceptional circumstances. I do not accept that, as a matter of law, reinstatement is the default position which should be ordered unless the employer shows, on the balance of probabilities, that such reinstatement is inappropriate. Reinstatement is but one of a number of remedies which, like any other, is open to the arbitrator to order either on its own, in conjunction with other monetary compensation, or not at all, even where the dismissal is found to be unjust.
Take Away to Both Sides
It is clear that the remedy of reinstatement is one that will be subject to considerable discretion of the decision maker. Equally clear is that a finding of no cause will not necessarily lead to reinstatement.
Get Advice and Know Your Rights
The reinstatement remedy under the Code has obvious advantages to federal employees, though it should not be the default expectation. Both employers and employees facing an action for unjust dismissal should seek the advice of an experienced labour and employment lawyer to get a clear picture of their position, and the best path forward in the action.
Contact the offices of Toronto employment lawyers Grosman Gale Fletcher Hopkins LLP. We regularly advise parties on a wide range of legal workplace issues, including unjust dismissal. Contact us online or by phone at 416-364-9599 to schedule a consultation.
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