Early February saw a decision which radically alters the rights of non-unionized federal employees in Canada. The Federal Court of Appeal ruled that the Canadian Labor Code does not give employees in federally-regulated industries the right to a job. The court has determined that dismissals without cause are valid and just, even when there is no economic reason for the dismissal. A dismissal is considered “just” if it is related to the effective functioning of the business and if the worker is given proper notice and/or compensation. Of course, as in nearly every government law and ruling, there is ambiguity in the language – in this case the definition of “just”, to determine whether the employee has any recourse.
One would always have to look first at the specific terms and conditions of employment, or the contract of employment. If a written employment contract exists, it may specify terms under which termination can occur as well as compensation to be offered. This ruling of the Federal Court of Appeal reinforces the validity of employment contracts unless the contract conflicts with labor laws or rights protected under a collective bargaining agreement. However, in most cases a written employment agreement has not been established to provide clear guidance.
Deciding an Unjust Dismissal:
So, how is an unjust dismissal to be defined and corrected, if an employer can dismiss any worker without cause? Will a reasonable notice period constitute a just dismissal? Will failure to provide sufficient notice render the dismissal unjust? If so, can reinstatement be awarded as a remedy? If there is a just cause for termination, is the reasonable notice period under common law waived?
There are some main factors which guide courts in determining reasonable notice, known as the Bardal factors. They include the character of employment, the length of service, age, and the availability of similar employment in terms of experience, training and qualifications.
Employers need to follow the terms and conditions of their employment contracts scrupulously, if they wish to avoid expensive litigation and penalties. Let us look at some cases, where dismissal was contested by the worker:
Employers usually compare their situations to other cases. But, there is no mathematical formula to help employers work out a reasonable notice period or severance pay. The code which permits dismissals without a cause apply only to federally regulated employers like banks, railways, telecoms and other federal employers. Of course, this ruling is very recent and still open for review, as the Supreme Court of Canada is the next court of appeal.
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