Ask a Lawyer: How will the Wilson v Atomic Energy ruling affect my company?

Ask a Lawyer: How will the Wilson v Atomic Energy ruling affect my company?

Ask a Lawyer: How will the Wilson v Atomic Energy ruling affect my company? After Joseph Wilson was terminated from his position at Atomic Energy of Canada in 2009, his case took a surprising turn. After the employer gave the reason for his dismissal as on a “non-cause basis” with “a generous dismissal package”, Wilson filed an unjust dismissal claim.

The case brought with it a flurry of questions from HR leaders, regarding what this could mean for their employment practices going forward. We spoke to Elizabeth Traynor, partner at Siskinds' Labour and Employment Group, who explained everything you need to know about the landmark case.

“Wilson will have either a very significant effect, or no effect at all on your company,” she told us. “The answer depends on whether your company is federally or provincially regulated.

“Wilson was employed by Atomic Energy Canada Limited (AECL), a federally regulated undertaking, for about four years before his employment was terminated, ostensibly without cause. AECL gave him a relatively generous exit package equivalent to six months’ regular wages and took the position that it had fully met its obligation to provide reasonable notice of termination. And in many situations, AECL would have been right.

“However, Wilson argued that the Canada Labour Code, which governs federally-regulated workplaces, does not allow for without cause dismissal. This has been a matter of legal dispute for many years and it was not until Wilson that the Supreme Court of Canada resolved the differing views.

“Madam Justice Abella acknowledged that the common law permits employers to dismiss an employee without cause, as long as the employee receives reasonable notice or pay in lieu of that notice. However, she found that the Unjust Dismissal provisions of the Canada Labour Code are intended to provide ‘expansive protections like those available to employees covered by a collective agreement’. Since legislation trumps the common law, just as unionized employees are protected from termination without cause, non-unionized employees covered by the Canada Labour Code can be dismissed solely for just cause.

“So, if your workplace is provincially-regulated, there’s no change - the employer still has the option of terminating employment without cause. But in federally-regulated workplaces, the standard for dismissal will be just cause, with very few exceptions.

“As we know, just cause is a high standard. One effect of Wilson is therefore that consistent, documented performance management is now even more critical in federally regulated workplaces. With strong performance management of a problematic employee, one of two things will happen: ideally, performance will improve, and the employee will develop into an asset to the organization; if not, the employer will have built the best possible foundation for a successful just cause argument.”

For the complete text of Wilson, click here.


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