Unjust dismissal under the Canada Labour Code – Adjudicator states “default remedy must be reinstatement”

Download Télécharger

In the recent decision of Maninderpal Randhawa and The Bank of Nova Scotia (February, 2017) under Part III of the Canada Labour Code (the “Code”), Adjudicator Slotnick determined that reinstatement was the proper remedy after finding that the employee’s dismissal was unjust.  The decision follows the principles set out by the Supreme Court of Canada in Wilson v. Atomic Energy of Canada Ltd. (2016).

Readers of Focus may recall the Wilson decision as the Supreme Court made it clear that the unjust dismissal provisions of Part III of the Code afford non-unionized non-management employees the same protection against without cause termination as that enjoyed by unionized employees.  This means that, subject to the specified exemptions in the Code, federally-regulated employers must show “just cause” for termination.

In Randhawa, the employee was a Customer Service Supervisor at the time of her dismissal in October of 2014.  She began working for the Bank in 1998 and had no disciplinary record and positive performance appraisals until a few months prior to her termination.  Following an audit of her branch in the summer of 2014, Ms. Randhawa’s manager identified a number of issues related to Ms. Randhawa’s supervision of Customer Representatives (tellers).  A number of meetings and e-mail exchanges transpired between the branch managers and Ms. Randhawa and eventually the Bank terminated the employment relationship on the basis of Ms. Randhawa’s performance, and her dishonesty in refusing to acknowledge her performance failures.  Ms. Randhawa commenced a complaint under the Code alleging that she was unjustly dismissed and sought reinstatement.

The Adjudicator noted that at the time of the termination of the employment relationship, Ms. Randhawa was discipline free and had consistently achieved “quality” ratings on her performance reviews since being promoted to the position of Customer Service Supervisor. In addition, she had never been put on a performance management plan.  The Adjudicator applied the Federal Court of Appeal decision in Payne v. Bank of Montreal (2014), stating:

Termination where there is no prior discipline, especially for an employee with significant service such as Ms. Randhawa, must be reserved for those egregious situations where a single incident has ruptured the employment relationship to a point where it cannot be salvaged.

The Adjudicator concluded that while there may have been performance issues justifying some disciplinary action by the Bank, “the escalation by the bank to termination…was unwarranted. The Adjudicator noted that it was significant that there was no indication that Ms. Randhawa was ever told her job was in jeopardy, “Even though there had been plenty of discussions, there had been no actual prior discipline and no warning that Ms. Randhawa could face termination unless improvements were shown.”

Having found that Ms. Randhawa was unjustly dismissed, Adjudicator Slotnick then considered the appropriate remedy. He stated:

In my view, where a complaint of unjust dismissal under the Canada Labour Code is upheld, the default remedy must be reinstatement, as it is for unionized employees covered by a collective agreement.  This is the clear implication of the Supreme Court’s analysis in the Wilson v Atomic Energy case, in which the court agreed that the unjust dismissal provisions were meant to give non-unionized non-management employees in federally regulated workplaces “expansive protections much like those available to employees covered by a collective agreement.

The Adjudicator went on to order the Bank to reinstate Ms. Randhawa to the position of Customer Representative (the position of Customer Service Supervisor was phased out by the Bank), and to pay Ms. Randhawa the full value of wages and benefits she would have earned as a Customer Service Supervisor from the time of termination until her reinstatement, subject to a one-week unpaid suspension. The Adjudicator also ordered the Bank to pay legal costs to Ms. Randhawa on a substantial indemnity basis.

 

In our view

This decision is important for federally-regulated employers. It makes it clear that non-unionized non-management employees, with twelve months or more of service, cannot be dismissed without cause.  If they are, the proper remedy will likely be reinstatement, unless the employment relationship is seen to be no longer viable.  Furthermore, where there are performance issues with employees, employers must performance-manage the employees and apply progressive discipline prior to terminating the relationship.

For further information please contact Steven Williams at 613-940-2737 or Sébastien Huard at 613-940-2744.