Wilson v. Atomic Energy sets a new precedent for federally regulated employees

Back on July 14, 2016, the Supreme Court of Canada (SCC) released its Wilson v. Atomic Energy verdict, clarifying the level of employment security afforded to federally regulated, non-unionized employees with at least 12 months of consecutive service. As dense and dry as this sentence may be, bear with me: the decision’s implications may be highly practical and enlightening to you.

Before exploring the verdict, I’ll first offer some employment basics to better understand the decision, beginning with the non-unionized environment, or the “common law” environment. In the absence of “just cause” (generally defined as egregious misconduct “justifying” an immediate termination with no monies to the employee), employers generally do not need a reason to terminate their employees. So long as an employee is provided their minimum statutory entitlement, as well as reasonable notice as established via common law precedent, one can be terminated for any– or even no– reason.

It’s a bit different in the unionized environment, or the “labour” regime. Terms of work for unionized workers are spelled out in a collective agreement, which will almost always contain a provision prohibiting terminations in the absence of just cause. These clauses generally preclude employees covered under the agreement from being dismissed for reasons short of just cause, thereby making their employment highly secure. This represents a key benefit individuals see in unionization.

Before we get to the SCC ruling, and in case you missed that class on Canadian federalism, put very generally, government authority is split between 11 jurisdictions: the federal government and the ten provincial governments. Under federalism, industries and businesses regulated under the federal sector include those of “national importance”or those that involve the regular crossing of provincial borders. Examples include, but are not limited to: banking, cross-border transportation, telecommunications, and most federal Crown corporations.

Workers in the federal sector total 820,000, or 6% of all Canadian workers, with the remaining 94% of the national workforce therefore regulated under the provinces.

With this in mind, let’s revisit Wilson v. Atomic Energy. Given that Mr. Wilson was not represented by a union, you would think he could be dismissed for no reason as long as he was provided reasonable notice, which he indeed was. Atomic Energy had offered him a termination package well above his statutory and common law minimum. Atomic Energy stuck to this as their main argument in the case, reasoning which was accepted at both the trial and appeal level.

Alas, this was not so simple. As a federal Crown corporation, Atomic Energy is regulated federally, with employment matters therefore governed under the federal employment/labour statute, the Canada Labour Code. What’s special about the Canada Labour Code (relative to most provincial employment and labour statutes) is section 240. This section permits a federally regulated employee with at least 12 months of continuous service to the employer, to “make a complaint in writing […] if the employee has been dismissed and considers the dismissal to be unjust”.

Should the matter fail to be settled by the dismissed employee and his or her employer, and if a subsequently appointed adjudicator finds the dismissal to have occurred for “no reason”asto render it“unjust”, the adjudicator has three options. First, s/he may order payment of the monetary equivalent of the reasonable notice period equivalent under the Canada Labour Code and common law. Second, s/he may reinstate the person back to their job, and lastly –and my personal favourite –s/he can “do any other like thing that is equitable to require the employer to do in order to remedy or counteract any consequence of the dismissal,” where the possibilities are literally endless!

The crux of Wilson v. Atomic Energy essentially involved interpreting this provision. Sparing you death-by-detail, the provision was originally enacted in 1978 with the purpose of providing non-unionized, federally regulated workers with a minimal level of protection from arbitrary dismissal comparable to the level of protection enjoyed by unionized workers. In the years since, the majority of adjudicators appointed under section 240 interpreted the section based on Parliament’s intent.

Despite this, a minority of adjudicators appointed under the section have rejected that purpose, opting instead to uphold the common law standard permitting an employer to terminate an employee for no reason so long as appropriate notice was provided. Not surprisingly, it was this line of reasoning that was accepted by the federal courts at both trial and appeal level.

The SCC, however, dismissed the minority interpretation. Justice Rosalie Abella, for a 6–3 majority, decided that the “main” line of reasoning was appropriate. This was based on both statements from Parliament when section 240 was enacted, as well as the “overwhelming majority” of arbitrator and labour law scholars accepting 240’s original purpose. The minority line of reasoning, per Abella, “completely undermines [section 240’s] purpose by permitting employers, at their option, to deprive employees of the full remedial package Parliament created for them.” Disagreement over the section’s impact has now been resolved.

Wilson v. Atomic Energy, for obvious reasons, represents a clear victory for employees working in federally regulated industries: they now have protection from arbitrary dismissal comparable to their unionized counterparts. For this same reason, however, the decision can only be considered a blow to employers operating under federal jurisdiction. Indeed, although the vast majority of section 240 complaints did ultimately protect employees from “arbitrary dismissal”, any wriggle room in interpreting the section favourably to businesses has all but been sealed by the SCC. A second, more latent implication of the verdict is the new dichotomy between the federal jurisdiction and the provinces on non-union job security. Recall that Ontario, to use a relevant example, permits non-cause dismissals so long as appropriate notice is provided to the individual. This is spelled out statutorily via the Employment Standards Act (sections 56–62) and via court decisions at common law. Simultaneously, Ontario also has its labour laws, and with it those bargained collective agreements containing provisions precluding termination absent of just cause. The federal sector, meanwhile, now essentially blurs the distinction between the common law and labour regimes: the labour-based principle of “just cause” has bled into the common law, non-unionized environment.

This effectively makes non-unionized, federal workers better protected than their non-union provincial counterparts, which form the vast majority (94%) of Canada’s total workers. Whether this is “fair” is a judgment I’ll leave you to decide for yourself, though keep in mind that there’s nothing stopping provincial legislatures from mimicking the substance of section 240 in their respective employment and/or labour laws.

I encourage you to take a glance at sections 240–246 of the Canada Labour Code (the “Unjust Dismissal” range) if you want to see these concepts in their entirety, as well as the Wilson v. Atomic Energy decision, if you have the time. Understanding the legal environments in which we work is invaluable for any member of the workforce, present or future.

Daniel Gaspar is a U of T alumnus who completed his Masters of Industrial Relations and Human Resources. He is currently in his first-year of law school at the University of Western Ontario.

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