A Definitive Ruling On The Issue Of Without Cause Terminations Under The Canada Labour Code

Federally regulated employers take note. The Federal Court of Appeal has recently confirmed that without cause dismissals are not automatically deemed to be "unjust" under the provisions of the Canada Labour Code (the "Code").

For decades, adjudicators have been at odds with one another regarding the question of whether the Code permits dismissals on a without cause basis. As a matter of background, the Code applies only to federally regulated employers such as banks, railways and telecoms. After years of uncertainty in this area, the Federal Court of Appeal recently decided to end the discord and definitively determine the legal point.

In the case of Wilson v. Atomic Energy of Canada Limited, Mr. Wilson was employed for 4.5 years before being terminated on a without cause basis and offered a common law package equal to about 6 months of pay. Mr. Wilson chose not to sign a release in exchange for the offer and instead filed a complaint under the Code which alleged