Calculating Damages For Unjustly Dismissed Federally Regulated Employee

• Published date: 18 October 2022
• Subject Matter: Employment and HR, Unfair/ Wrongful Dismissal, Employee Benefits & Compensation, Employment Litigation/ Tribunals
• Law Firm: Roper Greyell LLP ' Employment and Labour Lawyers
• Author: Mr Mike Hamata

This article was prepared with the assistance of articling student Daniel Hsieh.

Previously printed in The Lawyer's Daily, a LexisNexis Canada publication.

The Canada Labour Code is a unique creature. Unlike non-union provincially regulated employees in most Canadian jurisdictions, federally regulated employees who have more than 12 months' service and who are not managers, are protected from without cause termination in most circumstances. How then to calculate an entitlement to damages for an employee who is unjustly dismissed in contravention of the Code, given the breach of that added protection?

The Federal Court of Appeal weighed two competing approaches in Hussy v. Bell Mobility Inc. 2022 FCA 95. Unfortunately, the answer (for now) remains "it depends."

Background

As found by an adjudicator appointed under the Code, R.S.C. 1985 c. L-2, the applicant was unjustly dismissed by the employer. The adjudicator ordered the applicant to be compensated. The applicant applied for judicial review based on the method used in awarding her compensation by the adjudicator and for outstanding back pay she was to receive.

The court found the adjudicator's award of compensation was appropriate and did not justify its intervention. The applicant appealed the court's decision to dismiss her application for judicial review to the court. In addition, the employer applied for cross-appeal on the basis of the costs award.

Federal Court of Appeal

The main issue before the court was the reasonableness of the adjudicator's assessment of compensation for non-reinstatement. Ultimately the court dismissed both appeal and cross-appeal, finding that the adjudicator's award was reasonable.

The court evaluated two competing approaches for compensation of loss upon unjust dismissal under the Code. The first is the "common law approach" which uses the common law measure of damages for wrongful dismissal as a reference point and then adjusts to account for the loss of additional protections offered by the Code to federally regulated employees.

The second is the "fixed term approach" which calculates the amount the employee would have earned with continued employment until...