As we reported previously, employers in Canada's federal sector have had the right to dismiss employees without cause, provided the dismissal was not "unjust" within the meaning of section 240 of the Canada Labour Code. In Wilson v. Atomic Energy of Canada (PDF), the Federal Court of Appeal determined that a termination without cause was not automatically unjust. The Court, however, refrained from setting out a definition of unjust, instead indicating that it would leave it up to adjudicators appointed under the Canada Labour Code to develop its meaning. 

In a recent decision, Bernier v. Traversiers Bourbonnais Inc. (PDF - available in French only), an adjudicator has now clarified what an "unjust" dismissal is.

The Facts

The employee in this case was employed as a dockhand for a ferry service operating between Quebec and Ontario. As a dockhand, he had to direct cars and passengers on and off the ferry, and collect fees. At the time of hire, the employee was trained on the importance of always remaining polite and courteous to ferry users.

After approximately two years of service, the employee was dismissed following a customer complaint. The employee had been rude to the customer and had blocked and delayed his exit off the ferry. Why? Because the customer had not parked his car in the location indicated by the employee. After blocking his exit, the employee told the customer "Next time sir, listen to me".

The employee filed a complaint for unjust dismissal and the matter was referred to adjudication.

At the hearing, the employee argued that the dismissal was unjust because the decision to terminate had been taken without first having obtained the employee's version of the events. He also argued that progressive discipline had not been followed and that the dismissal was excessive in the circumstances. Contrary to the employee's allegations, the employer had had multiple discussions with the employee about his attitude towards employees and customers.

The Decision

The adjudicator recognized that progressive discipline had not been followed. However, the real issue in the adjudicator's mind was whether the employee's dismissal following his misconduct was unjust within the meaning of the Code. Previous discussions with the employee only provided relevant context.

According to the adjudicator, a dismissal will not be "unjust" if it is based on objective, real and serious reasons related to the proper operations of the business. 

In this case, the employee's conduct towards the customer was unacceptable. This unacceptable behaviour constituted an objective and serious reason that was directly related to operations where customer service and respect were important. The dismissal was therefore not unjust.

Implications for employers

The decision applies the Federal Court of Appeal decision in Wilson v. Atomic Energy of Canada Ltd. However, leave to appeal to the Supreme Court of Canada has been granted in that case. Until the Supreme Court renders its decision, the state of the law with regard to unjust dismissals under the Code remains uncertain.

Nevertheless, the Bernier decision provides some additional guidance for federally regulated employers. To the extent a decision to dismiss is not based on capricious or frivolous grounds, but is based on objective operational reasons, the dismissal should not be considered unjust.