Statutory Unfair Dismissal in Canada: What is the Value of a Lost Job?
29 Pages Posted: 1 Jun 2022
Date Written: May 24, 2022
The starting presumption in the Canadian common law of non-union employment contracts is that either party can terminate the contract for any or no reason at all, provided that party first provides notice of the termination to the other party. A requirement to provide 'reasonable notice' of termination is implied into employment contracts by the courts unless the contract includes a clear expressed notice of termination clause that identifies a specific period of notice and that does not run afoul of statutory minimum notice requirements. There are a number of notable exceptions to the general presumption that notice of termination is required. For example, an employer is relieved of the obligation to provide notice if the employee commits a repudiatory breach of the contract ('summary dismissal').
In the 1970s, the federal government along with the governments of Quebec and Nova Scotia introduced statutory 'unfair dismissal legislation'. The stated objective of these laws was to mimic collective agreement 'just cause' protections long enjoyed by unionized workers across Canada.The legislation supplanted the common law right of employers to terminate employment contracts for any reason by simply providing notice with a new regime that required employers to demonstrate good cause for the termination, except where the termination was due to lack of work. Importantly, the legislation also encouraged reinstatement of unfairly dismissed workers to overcome the common law's reluctance to order specific performance of employment contacts.
This paper examines the unfair dismissal legislation four decades into its lifespan with the aim of assessing whether the laws have achieved their stated goal of extending collective bargaining-like protections from unfair dismissal to non-union workers. Adjudicators responsible for enforcing the legislation have borrowed heavily from labour arbitration principles in the unionized context, holding employers to a relatively high standard of just cause for termination. However, in practice, adjudicators have been reluctant to order reinstatement in many successful unfair dismissal complaints, finding that in the non-union setting, reinstatement would be inappropriate or ineffective. This reluctance to reinstate workers shines a spotlight on how adjudicators craft remedies in lieu of reinstatement. Here the results are mixed. Some adjudicators, especially those applying the federal legislation, have adopted a purposive approach to remedial discretion and have sought to assess the true value of the lost job to the unfairly dismissed worker. However, many adjudicators, particularly those enforcing the Quebec and Nova Scotia legislation, have fallen back on the common law practice of assessing damages for a period of notice.
Keywords: Employment Law, Labour Law, Labor, Just Cause, Unfair Dismissal, Canada, Common Law
JEL Classification: K31, K100, J00, J18, J52, J5, J8, K00, K12
Suggested Citation: Suggested Citation