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Gone and Back Again: A Remedy of Reinstatement for Federal Employees

Practice Areas: Employment Litigation

Federal employers should be aware of the risks in terminating employees under the Canada Labour Code. Unlike employers governed by provincial legislation, federal employers who terminate the employment of an employee risk the employee being reinstated to the workplace. The reinstatement remedy, combined with the fact that federal employers are only permitted to terminate employment when just cause can be established, as determined by the Supreme Court of Canada last year and blogged on here, means making a dismissal stick is an uphill battle. Provincial employers, in contrast, do not risk employees being reinstated.

A recent decision of Adjudicator Slotnick considered the remedy when unjust dismissal is found under the Canada Labour Code. Adjudicator Slotnick determined that an employee was unjustly dismissed from her employment at the Bank of Nova Scotia. The employee was reinstated with back pay to a position with the bank. The key take away from this decision is that reinstatement is to be the default remedy when a complaint of unjust dismissal is upheld. This means that if federal employers are unsuccessful at defending a complaint of unjust dismissal that the employee will, in all but the most exceptional circumstances, be returned to the workplace.

It is likely that cases where reinstatement is an inappropriate remedy will be rare. If an employer chooses to defend a complaint of unjust dismissal, it should be prepared to also argue that reinstatement is not an appropriate remedy in the specific circumstances of the case. The exception to reinstatement will generally only be applied when the employment relationship is no longer viable. Employers should be aware that is insufficient for the employer to claim, without supporting evidence, that the relationship is no longer viable. In order to successfully win this argument, the employment relationship must not be viable based on objective evidence presented throughout the case. For example, severe misconduct that goes to the trust of the employment relationship may be sufficient.

In the case before Adjudicator Slotnick, the employee was reinstated despite breaching the cash handling policy and incidents of dishonesty with the employer throughout the dispute. Accordingly, employers should be cautious and aware of the risks in terminating the employment of federal employees. In the long run, it may be more effective for federal employers to consider options such as progressive discipline to address employee misconduct.

It is important to determine if the risk or reinstatement applies to your workplace. Generally federal employers are airlines, banks, telecommunications and interprovincial railways. If in doubt of your jurisdictional status, it is highly recommended to check as a result of the different requirements of federally and provincially regulated employers. We have previously blogged on this issue here.  

If you are a federally regulated employer who requires assistance in navigating an employee claim of unjust dismissal the lawyers at CCPartners are well versed in navigating terminations for federal employees and can assist employers throughout the process.



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