Wilson v Atomic Energy: More Than Unjust Dismissals
Much has already been written in regards to the recent decision of the Supreme Court of Canada (“SCC”) in Wilson v Atomic Energy of Canada Ltd, 2016 SCC 29 [Wilson]. It may seem surprising that it took thirty years to settle on Parliament’s intent in introducing the 1978 amendment to the Canada Labour Code, RSC 1985, c L-2 [Code] which aimed at protecting non-unionized workers from unjust dismissal. However, it is likely that very few employees who were dismissed without cause had the time, resources, and determination to carry their case forward to the Supreme Court. In Wilson, the Court finally had the opportunity to consider the Code, and the ruling is a much welcome development for fairness in the workplace.
However, Wilson is more than just about employment law. Wilson signals that a debate is certainly brewing within the legal profession on the standard for judicial review of administrative decisions. Justice Abella devotes a substantial portion of her analysis, albeit in obiter, tackling the difficulties that courts face in determining which standard of review to employ. It is unclear what will come from this debate, but I personally think that we have only just seen the start.
This post is devoted to briefly touching on the two issues emerging from Wilson: the appropriate interpretation of the Code itself, and the overall standard of judicial review applicable to administrative decisions.
Mr. Wilson was dismissed by Atomic Energy Canada Limited (“AECL”) after four years of employment. AECL did not assert cause and paid Mr. Wilson six months’ severance instead. Believing that he was unjustly dismissed due to a complaint about unfair procurement procedures, Mr. Wilson filed a complaint under section 240 of the Code (Wilson, para 8). AECL’s argument was that the generous dismissal package was enough to fulfill their obligations under the Code (para 9).
The assigned adjudicator concluded that the employer could not resort to severance payments to avoid a determination under the Code about whether the dismissal was unjust (para 13). The Federal Court reviewed the decision on the standard of reasonableness and found it to be unreasonable, holding that an employer can dismiss an employee without cause so long as it gives notice of severance pay required by the Code (para 14). The Federal Court of Appeal reviewed the decision on the standard of correctness and came to the same conclusion as the application judge (ibid).
Unjust Dismissal And The Canada Labour Code
At issue before the SSC was whether Parliament’s intention in the 1978 amendments to the Code were meant to offer protections to non-unionized employees similar to those employees covered by a collective agreement.
The “Unjust Dismissal” provisions, ss. 240 to 246 of the Code, apply to non-unionized, non-management employees who have completed a minimum of one year of continuous employment. Upon dismissal, any such employee has 90 days to make a complaint to an inspector if the employee considers the dismissal to be unjust (s. 240). Under s. 241(1), the inspector can ask the employer for a written statement setting out the reasons for the dismissal and the employer must provide it within fifteen days.
If the matter is not settled within a reasonable time, an adjudicator may be appointed to determine whether the dismissal was unjust (s. 242(1) – (3)). The adjudicator has broad authority to grant a remedy – including to order the employer to reinstate the person in his employ (s. 242(4)).
In her ruling, Justice Abella pointed out that when the “Unjust Dismissal” provisions were first introduced, the Minister referred to the fundamental right of employees to protection from arbitrary dismissal. The “Unjust Dismissal” provisions were meant to give “unorganized workers protection against unjust dismissal somewhat comparable to that enjoyed by unionized workers under collective agreements” (para 49).
Further, Justice Abella noted that the premise of the common law scheme—that there is a right to dismissal on reasonable notice without cause or reasons—has been completely replaced in the Code (para 63). The discretionary remedies, including reinstatements, as well as the open-ended equitable relief available under s. 242(4)(c), are utterly inconsistent with the right to dismiss without cause (ibid). Abella concluded that if an employer can dismiss without cause under the Code, there is virtually no role for the remedies available to the adjudicator under ss. 240 to 245 (ibid).
Practical Implications of Wilson
The SCC ruled that the intention of the “Unjust Dismissal” provisions in the Code is to provide non-unionized federal employees in non-management positions with rights following dismissal similar to those afforded to unionized employees. Unionized employees can normally only be dismissed for “just cause.” This interpretation now includes an onus on employers to give reasons showing why the dismissal is justified.
Wilson affects federally regulated employees who are eligible to file complaints under s. 240 of the Code—meaning employees who are not mangers, who have been continuously employed for more than one year, and who are not being laid off. The fact that an employee has been given notice and paid severance in accordance with a valid contract will not preclude a claim for unjust dismissal under the Code.
For employers, Wilson means that employment contract clauses that state that the employer has a right to terminate “without cause” are unenforceable. Beyond revisiting their employment contracts, employers should also revisit their internal policies governing how they document dismissals as they now will need to provide cause, which necessarily requires progressive measures and documentation. To successfully establish case, the employer needs more than mere dissatisfaction with the employees performance.
Another issue that emerges from Wilson concerns the standard of review of administrative decisions. The SCC strived for a coherent and workable framework for the standard of review in Dunsmuir v New Brunswick, 2008 SCC 9 (Dunsmuir). As a result, the three existing standards of judicial review of administrative decision were replaced by two. Post-Dunsmuir, the debate over “patent unreasonableness” and “reasonableness simpliciter” have been replaced by a debate over “reasonableness” and “correctness.”
Justice Abella commented in obiter that a substantial portion of the factums and the decisions of the lower courts in Wilson were occupied with precisely the issue of the applicable standard of review. Justice Abella rejected the Federal Court of Appeal’s approach, seeing it as an attempt to calibrate reasonableness by applying a potentially indeterminate number of varying degrees of deference within it (para 18). Justice Cromwell agreed with Justice Abella on this issue, but did not support the collapsing of the two standards of review that she championed in her reasons (para 73).
Justice Abella also highlighted Professor David Mullan’s observation that the SCC has blurred the conceptual distinctions between reasonableness and correctness in a number of cases, engaging in a “disguised correctness” review while ostensibly conducting a reasonableness review (para 27). As Justice Abella observed, nothing in Dunsmuir suggests that constitutional compliance dictates how many standards or review are required (para 31). Moreover, it is essentially the same thing to conclude that there is only a single “reasonable” answer available and when the answer is “correct” (para 24). The goal for Justice Abella is to build on the theories developed in Dunsmuir and to apply them in a way that eliminates artificial categories. To achieve this goal, she called on the contribution of the legal community. Let us hope that they rise to the challenge in an assertive way.
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