Dealing with unjust dismissal under the <i>Canada Labour Code</i>

Assessing lost wages for a discontinued position

Stuart Rudner
Question: In October 2006 we closed a satellite location and three employees were laid off. One employee filed and won an unjust dismissal complaint under the Canada Labour Code. We have now been asked to reconvene to discuss "lost wages and costs." How do we assess lost wages (the employee of 18 months is asking for 34 weeks’ pay) when the function was discontinued?

Answer: Most of us, human resources practitioners and employment lawyers alike, rarely have to deal with the Canada Labour Code, as it governs such a small percentage of the Canadian workforce. However, those organizations governed by its terms are likely to be well aware of the fact they can be quite different from comparable provincial legislation, particularly with respect to termination. Among other things, the code provides for the remedy of reinstatement. If an employee is found to have been unjustly dismissed, she can be entitled to compensation (damages) for the remuneration she would have received had she not been dismissed, reinstatement or anything else that is equitable in order to remedy the consequence of the dismissal. Clearly, the powers provided by the code are extremely broad.

With respect to the question, it is difficult to answer with specificity without knowing the precise wording of the order. Typically, what happens is that if a dismissal has been found to have been unjust, the employer would be ordered to reinstate the complainant and also pay them for all wages lost during the period commencing from the time of dismissal and ending when they resume their duties. If reinstatement is not awarded, such as if it would be inappropriate in the circumstances, the individual can also be entitled to pay in lieu of notice of termination. The award would make clear the time periods involved; the parties would be left to calculate exactly what the resulting amounts are. It should be apparent the potential damages that can be awarded pursuant to a finding of unjust dismissal under the code can be greater than those typically available at common law. That has been explicitly confirmed by the courts. That said, like cases brought pursuant to common law, an employer can seek to reduce the quantum of damages by showing the employee has failed to properly mitigate her damages. In order to do so, it will likely have to show an absolute failure to seek new employment or there were legitimate opportunities for re-employment the employee failed to pursue. The burden is on the employer to do so.

Stuart Rudner is a partner who practices commercial litigation and employment law with Miller Thomson LLP’s Toronto office. He can be reached at (416) 595-8672.

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