Federally Regulated Employees & Termination

Throughout Canada, many employment relationships are governed by provincial laws. However, employees who work in certain industries fall under federal regulation. Federally regulated workplaces generally include organizations operating on a Canada-wide basis, such as radio and television broadcasters, telecommunication companies, banks, and air transportation, amongst others.

Employees who are governed by federal laws have some different rights and entitlements than their provincially regulated counterparts. In this blog post we explore federally regulated employees' termination entitlements, and options for redress.


(1) Statutory Termination Entitlements

The Canada Labour Code sets out minimum rights for federally regulated employees, including minimum entitlements on a without cause termination. Specifically, employers must provide the following upon termination:

  • Termination notice or pay: Employees who have completed 3 months of continuous employment are entitled to 2 weeks notice of termination or pay in lieu of notice.
  • Severance: Employees who have completed 12 months of continuous employment are also entitled to the greater of:
    • 2 days' wages for each completed year of employment; and
    • 5 days' wages.

These are only minimum entitlements, however. Employees may have additional severance rights based either on the terms of their contract or based on the more generous common law concept of reasonable notice.


(2) Unjust Dismissal

Unlike provincially regulated employees, federally regulated employees who are dismissed have the option of seeking reinstatement by way of an unjust dismissal complaint. An unjust dismissal complaint can be brought even if the employee has been offered a severance package.

Under the Canada Labour Code, employees may be able to bring a complaint for unjust dismissal if the following criteria are satisfied:

  • The employee has completed at least 12 months of continuous employment and is not subject to a collective agreement.
  • The employee is not a manger.
  • The employee was not terminated due to lack of work or discontinuance of a function.

The dismissed employee must file their unjust dismissal complaint with the Labour Program office within 90 days of the date of dismissal. Once the complaint is received by the Labour Program office, an inspector will be appointed to try to assist the parties in settling the dispute. Many complaints are settled at this stage.

If no settlement is reached, the employee can request that the complaint be referred to an adjudicator. The Ministry of Labour has discretion as to whether or not to appoint an adjudicator. If an adjudicator is appointed, a hearing date will be arranged where the employer will typically bear the onus of proving the dismissal was justified.

Generally, a dismissal will only be justified if there was "just cause" for dismissal. Serious misconduct, habitual neglect of duty, incompetence, conduct incompatible with the employee's duties or prejudicial to the employer's business, or wilful misconduct have all been recognized as behaviour that amounts to just cause. While one instance of serious misconduct may amount to just cause, typically the adjudicator must be satisfied that the employee's record shows a pattern of unacceptable behaviour and that the employer engaged in progressive discipline.

If the adjudicator concludes that the dismissal was not justified, they have broad powers to order the following remedies:

  • Compensation not exceeding the amount of money that is equivalent to the remuneration that would, but for the dismissal, have been paid by the employer to the employee;
  • Reinstatement of the employee; or
  • Any other thing that is equitable to require the employer to do to remedy or counteract the consequences of the dismissal.

While reinstatement is a common remedy, it may not be ordered in all circumstances. Reinstatement may not be appropriate where there has been a deterioration in the relationship between the employee and employer or the employee is unable to immediately start work again, amongst others.


(3) Wrongful Dismissal

A federally regulated employee can also pursue a civil lawsuit for wrongful dismissal. This may be appropriate in circumstances where the dismissed employee believes they have not been provided with their full termination entitlements including to common law reasonable notice.

The Canada Labour Code specifically contemplates that an employee may pursue both a civil remedy in the courts and an unjust dismissal complaint with the Ministry of Labour. However, if an employee receives a remedy under one regime, it would likely impact their entitlement to a remedy under the other regime. For example, the reinstatement of an employee would significantly impact their ability to recover damages in a civil wrongful dismissal suit.

For more information on wrongful dismissal claims, check out our blog post: Wrongful Dismissal Lawsuits in Ontario � the Litigation Process.


Takeaways:

Terminations can be tricky. It is important that employees take the time to understand their rights and entitlements on termination. For federally regulated employees, this includes considering whether to seek reinstatement by bringing an unjust dismissal complaint. On the flipside, federally regulated employers should be alert to their obligations on termination and the possibility of unjust dismissal complaints. Employers would do well to carefully consider the reasons for termination prior to dismissing the employee.

In all cases, employers and employees alike should seek legal advice when dealing with a termination. Lee Workplace Law would be happy to help