Canada is the only country in the world that knows how to live without an identity.” – Marshall McLuhan
As employment lawyers, one of the first things we do when assisting a new client is to ask whether their employment is provincially or federally regulated. We often need to answer, “what difference does it make?”, and then advise the client that there are differences in the available remedies and the process for obtaining them.
Provincially v Federally Regulated Employment
The Constitution Act divides responsibilities for governing the country between the federal and provincial levels. Federally regulated employers include industries that span the country, such as airlines, banks, and railways. Provincially regulated employers cover the rest, including most businesses, health care, and schools. Most workers in Canada are provincially regulated.
Provincial Remedies
Each province’s employment legislation addresses an employee’s entitlements to notice or pay in lieu of notice upon dismissal. In most provinces this is a week’s pay per year of service, to a maximum of 8 weeks. Some, such as the Ontario Employment Standards Act, 2000, also include Severance Pay – which, for an eligible employee, can be up to 26 weeks. The remedy available under a provincial statute is usually less than at common law.
There is an enforcement process in each province’s employment statute. Except in extremely limited cases (such as reprisal), the statutory remedy is limited to an order for the employer to pay outstanding statutory entitlements, and not things like reinstatement, costs, and damages.
Federal Remedies
Federally, the Canada Labour Code (the “CLC”) addresses an employee’s entitlements on dismissal.
This can be a much smaller amount than under a provincial statute. Under the CLC an employee with greater than three months of service gets two weeks notice or pay in lieu – this does not increase with an employee’s length of service. An employee with more than twelve months of service gets two days of Severance Pay per year worked, with a minimum of five days to be paid.
The CLC is distinct from its provincial equivalents in the process for seeking a remedy and the much broader spectrum of remedies.
This is addressed in section 242(4) of the CLC, which reads:
Unjust dismissal
(4) If the Board decides under subsection (3) that a person has been unjustly dismissed, the Board may, by order, require the employer who dismissed the person to
(a) pay the person compensation not exceeding the amount of money that is equivalent to the remuneration that would, but for the dismissal, have been paid by the employer to the person;
(b) reinstate the person in his employ; and
(c) do any other like thing that it is equitable to require the employer to do in order to remedy or counteract any consequence of the dismissal.
To make a claim under the CLC, the employee must have worked for the same employer for at least twelve months, cannot have been working in a managerial role, and must have been unjustly dismissed. This must be brought within 90 days of the employee’s dismissal.
An employee is unjustly dismissed when their dismissal was for any reason apart from a lack of work/discontinuance of a function or just cause. So, unlike other contexts, employers in this context cannot decide to let someone go without a reason, or for a reason other than the elimination of their role.
Let’s discuss each of these remedies.
4(a): Compensation
The employer may be ordered to pay the employee’s lost wages from the date of dismissal up to the date of the hearing.
4(b): Reinstatement
Reinstatement is the presumptive remedy under the CLC. Except in limited cases, unless the employer can show that the employee’s dismissal was for just cause, the employer will be ordered to reinstate the employee to their previous position. This may be accompanied by an order under 4(a) to pay the employee their lost wages between the date of dismissal and the date of hearing.
An adjudicator may find a dismissal was unjust, but that the circumstances mean that reinstatement is not possible. The employee may be compensated for their lost position, under section 240(4)(c) of the CLC.
4(c): Do Any Other Like Thing
This clause provides an adjudicator with substantial liberty to award a remedy.
Where reinstatement is not possible, an adjudicator may award the employee a sum equivalent to common law reasonable notice. Unlike in court, the adjudicator’s calculation of reasonable notice includes compensation for the employee’s loss of the CLC’s protections.
An adjudicator may also award an employee with damages for the employer’s conduct. Like in a civil matter, this can include punitive and aggravated damages, and are rarely awarded.
Finally, an adjudicator may award costs on the same scale as the court – on either a partial or substantial indemnity basis. This is a recent development in the application of the CLC and has not been frequently applied.
Conclusion
Whether provincially or federally regulated, a wrongfully dismissed employee has several options. They may seek a remedy under the governing employment statute, or through the courts. For a provincially regulated employee whose employment is not governed by a valid employment agreement and gives rise to the potential for a higher remedy, it usually makes more sense to proceed through the courts.
For the federally regulated employee the decision is not as clear. The remedies available under the CLC may be equal to or more than common law – with the potential of getting their job back as well. The brief timeline for filing a complaint under the CLC (90 days) versus under the common law (2 years) means that this is a decision that must be made quickly.
We assist both employers and employees in all aspects of the employment relationship, at the federal and provincial level, and would be happy to assist you whether you are an employee whose employment has been terminated, or an employer who has dismissed or is considering dismissing an employee. Feel free to check out our FAQs and contact us for advice tailored to your situation.
