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Unjust Dismissal and Adjudication Under the Canada Labour Code

Whitten and Lublin | Feb 21, 2018

Just cause may be established by a progressive discipline (verbal warning, written warning and then termination, for example), or for a single incident of misconduct. For a single act, the misconduct must cause a fundamental breakdown of the relationship between the employee and the employer. This must be examined case-by-case, with full consideration of all relevant factors such as an employee’s position, expectations, duties and so on. Therefore, what may be the insignificant single act of misconduct for one employee may amount to a just cause for dismissal for another employee.

Under the Canada Labour Code (The Code), federally regulated employers may only dismiss employees due to a slow-down in business (a layoff) or for misconduct amounting to just cause for termination. In the event that an employee covered under The Code is dismissed, they may challenge this through adjudication issued by the Canada Industrial Relations Board (CIRB). Reinstatement and payment for lost wages will be the remedy imposed for wrongful dismissals. This process is of no cost to the employee.

The CIRB will examine each case similarly to how the courts would, including cases for which employers dismiss an employee for just cause due to a single incident of misconduct. In a case between Royal Bank of Canada (RBC) and a Senior Account Manager (the employee), the employee was dismissed for misappropriating 2 reward cards used to reward well-performing employees; these 2 reward cards were worth $10 which the employee added his to his online rewards account. RBC then fired the employee here for the cause. The adjudicator upheld this decision, stating that “higher standard of trust and integrity required in the banking industry, where dishonesty can result in harsher consequences.” Here the adjudicator agreed with RBC, which held the position that the theft of the reward cards, even though it amounted to a small monetary value, is so incompatible with the relation and expectations of a senior manager at a financial institution that a single incident here amounted to a just cause termination.

A severance cannot be used to avoid the requirement of just cause under The Code. Employers, therefore, need to ensure that single incidents of misconduct of employees are considered carefully before a dismissal for just cause is made. As this is a relatively new development, employers may wish to seek consultative services in order to understand the requirement for termination under The Code. Whitten and Lublin have a team dedicated to ensuring that employers are equipped with the knowledge needed to make correct and cost-effective decisions.