Is A Termination Without Cause Always Unjust? No, Says The Federal Court Of Appeal

March 16, 2015

By Brad Smith

In Wilson v. AECL an employee was terminated without cause and provided with 6 months severance pay. The employee complained under the Canada Labour Code alleging his termination was unjust. He argued a termination without cause is always unjust under the Canada Labour Code.

Prior to Wilson v. AECL there was debate whether a federally regulated employer could terminate an employee without just cause. The answer to this question is important because if the termination was unjust, the employee could potentially be re-instated. This was quite an extraordinary remedy and a significant departure from the common law.

The Federal Court of Appeal concluded “a dismissal without cause is not automatically “unjust” under the Canada Labour Code. An adjudicator must examine the circumstances of the particular case to see whether the dismissal is “unjust””.

This is an important clarification in the law for federally regulated employers. It reduces uncertainty when an employer terminates an employee without just cause. But an employer must still act in a just manner when terminating an employee.