When "Because I Said So" fails as a defence
In the broadest of terms, any employee can be fired at any time for any reason.
There are, of course, caveats to this. An employee can be terminated so long as they are provided with reasonable notice, or pay in lieu of notice, and the termination cannot be considered discriminatory under human rights legislation, for example.
The other major caveat is that this applies to provincially regulated employees, which are governed by the Employment Standards Act, 2000 ("ESA"). Provincially regulated employees are those who work in any industry regulated by the Province - in other words, most private employers.
However, for employees in federally regulated industries (think banking, radio and television, air travel, etc.), their rules fall under the Canada Labour Code (or "CLC"), a federal piece of legislation. The CLC has some key differences in its termination laws including, as the Supreme Court outlined recently, the inability to terminate employment at any time for any reason.
In this specific case of Wilson v. Atomic Energy of Canada Ltd., 2016 SCC 29, the Plaintiff, Joe Wilson ("Wilson"), worked for Atomic Energy ("AECL") as a Procurement Supervisor before he was dismissed in 2009. Wilson was terminated as a provincially regulated employee often would be - by being presented with a dismissal package that exceeded his minimum statutory requirements under the law. In other words, he was paid out more than he was legally owed, and to AECL that should have been the end of it.
But there's a catch. Because AECL is federally regulated, Wilson was allowed to file an "unjust dismissal" complaint that claimed he was terminated in retaliation for a complaint he had made about company practices. Under the unjust dismissal provisions, a terminated employee has 90 days from termination to make a complaint to the ministry for the employer to provide reasons for their termination, following which an inspector will be brought in to help settle the matter.
If the inspector cannot settle the matter simply, it will be referred on to an Adjudicator, who has fairly broad powers. If the adjudicator finds that a person has been 'unjustly dismissed' under the CLC, then the Adjudicator can order the employer to compensate the terminated employee with salary owed, reinstate them to their old position, or any other sort of equitable remedy (something fair) to make things right. Furthermore, and this part is key, the employee who takes actions under these steps is not held back from pursuing a civil action (through the courts) as well.
When Wilson's case went before an Adjudicator, the Adjudicator determined that because there was no cause for him to have been fired, AECL could not simply terminate him by paying him out no matter how generous the payment may have been. When the Federal Court and later Federal Court of Appeal reviewed the matter, they ruled that the CLC did not prohibit employers from terminating non-unionized employees on a 'without cause' basis, or 'for no reason'.
However, when the Supreme Court reviewed the Wilson matter, they disagreed. In a highly technical decision, the Court held that the Adjudicator's original decision has to be viewed within the scope of 'reasonableness' - was the Adjudicator's outcome reasonable based on the circumstances? They held that it was, and that the Adjudicator had interpreted the Unjust Dismissal portions of the CLC reasonably.
The Court analyzed the original debates in the legislature from when the CLC and these provisions were first brought in, and determined that it was Parliament's intention that these workers were protected from unjust dismissal for no good reason. The law was, in fact, a way to protect workers and increase their rights so that they did not have to resort to an expensive and lengthy court process.
This does not, however, apply in all cases. As the Court held in the decision, "there is no Unjust Dismissal protection in the case of layoffs or discontinuance of a job." In other words, this does not protect employees who are laid off or whose positions are being phased out, but rather those who were terminated without a solid business reason to do so. The Court also rejected a small string of cases over the years which had held that the common law approach of paying reasonable notice applied broadly here, ruling that this is not the correct approach in these instances.
As the Honourable Madame Justice Abella wrote at the end of her decision:
"AECL's argument that employment can be terminated without cause so long as minimum notice or compensation is given, on the other hand, would have the effect of rendering many of the Unjust Dismissal remedies meaningless or redundant." [paragraph 68]
Parliament intended a safeguard for these workers in how the CLC is structured, and the Supreme Court has decided to uphold it.
While the decision looks like a major game changer, its full impact remains to be seen. Again, the CLC, and especially the Unjust Dismissal portions of the law, only apply to non-unionized, federally regulated employees, which is only a small fraction out of Ontario's broad workforce.
However, the question employment lawyers are asking now is what impact the decision might have on the changes coming to the ESA. The Provincial government is currently working on a revamped version of Ontario's workplace laws, and while the new version may not contain the same strong protections against dismissing an employee with pay in lieu of notice, it will likely contain increased protections for terminated workers so that they can use the new law and its protections to avoid costly litigation.
For employers, it is never a good idea to terminate an employee haphazardly. Taking the extra time to review your policies and procedures, and ensuring that the package you're offering an employee is both fair and reasonable (and, in this case, permissible by law) is well worth the wait to avoid problems in the future. An employment lawyer will help you review and implement your termination plan to be sure that things go as smoothly as possible.
The bottom line is this: "Because I Said So" may work for parents, but in the case of some employees, the Supreme Court says it simply won't fly.