We have a very piecemeal approach to the law of dismissal in Canada. Unionized employees can only be dismissed for ‘just cause’, because unions bargain that requirement into collective agreements. Disputes about whether an employer had just cause are dealt with through a grievance procedure and ultimately end up before a labour arbitrator (not a court), who applies labour arbitration principles (and not common law principles).
Nonunion employees in most of Canada have no similar ‘just cause’ protection. Instead, the common law rules apply, and the common law grants employers the right to dismiss employees for any reason, or no reason at all, provided the employee is given the notice required by the contract (if the contract says anything), or “reasonable notice”, which is a judge-made implied term. As I remind my students, under the common law model, it would be perfectly fine for an employer to fire everyone “wearing blue” one day, as long as those people are then cut a cheque for the proper period of notice.
Statutory Just Cause Protection
But there is also a third model in Canada. In a few jurisdictions (Federal, Quebec, and Nova Scotia), the employment standards legislation includes a form of just cause protection for non-union employees. There’s a great discussion of the history of the Federal model, and how it works today, in the Arthurs’ Commission Report Fairness at Work, and in the report of Professor Geoffrey England prepared for that study.
The Federal provisions are found in Section 240 of the Canada Labour Code.
Consider Soplet v. Bank of Nova Scotia. The employee there bought a small amount of pot from a co-worker at work. The Bank dismissed him, and alleged just cause. The employee filed a complaint under Section 240 and won. The adjudicator ruled that the misconduct was not so serious to amount to just cause considering that the employee had over 6 years of high quality service. The adjudicator could have reinstated the employee, but the employee already had another job. So the adjudicator ordered the employer to pay 6 months’ wages at $6050 per month, plus 10% more for lost benefit coverage, plus interest at a rate of 4%. Ultimately, a pretty expensive ding for the bank, which no doubt thought that buying pot at work is a serious breach of the contract.
If this employee was not covered by the Canada Labour Code, then the common law would have applied. The employer would have dismissed the employee and alleged ’cause’, so that it would not have to give ‘reasonable notice’. The employee would then have to sue the employer for wrongful dismissal. The court would then decide if buying a small amount of pot amounted to ’cause’ for summary dismissal.
How do you think a common law court would decide that issue, given what you know about the law of summary dismissal? Do you HR managers out there believe that you can dismiss an employee for cause (without notice) if the employee is caught buying pot at work?