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Wrongful Dismissal for Federal Employees (Canada Labour Code) – What are my rights?


By Erin Moores

If you’re a non-unionized employee working in a federal sector job**, what are your rights if you are dismissed? What are your possible recourses if your dismissal was wrongful? Erin Moores sets out a Wrongful Dismissal 101 for employees covered by the Canada Labour Code.

What is meant by “wrongful dismissal”?

In most cases, your employer must give you notice of termination of your employment. An employer can require you to work through the notice period or it can end your employment immediately and pay you during the notice period instead.

“Wrongful dismissal” means that your employer did not give you the correct notice of termination (either as a period of time or as pay in lieu of notice) required by law.

What is “unjust dismissal”?

Many types of employees in Canada can be terminated without any reason, which is called being terminated without cause or without just cause. In those cases, employers can terminate an employee at any time if they give the correct notice or pay in lieu.

However, an employee who a) has more than 12 months of service; b) is not a manager; and c) works for a federally-regulated employer covered by the Canada Labour Code cannot be dismissed without just cause. If the employer does not have cause for dismissal, it is an “unjust dismissal” and you can seek reinstatement to your job and/or damages.

Just cause means that you engaged in misconduct serious enough to warrant termination or that you had serious performance issues which you did not improve even after being given the opportunity.

How much notice am I owed?

Minimum notice periods for federal sector workers are set out in the Canada Labour Code and are based solely on your years of service with your employer. The Canada Labour Code states that you are entitled to 2 weeks’ notice (or 2 weeks’ pay in lieu of notice) if you have been employed for more than three months.

However, the notice you are owed could be more than the minimum. This depends on whether you have a written employment contract and on what that contract says. It can also depend on whether your employer has a policy about notice.

You also may be entitled to what is called “common law notice”, which can be a longer period than what is set out in the Canada Labour Code. Whether common law notice applies to you also depends on whether you have a written contract and on several other factors.

What is severance and am I owed any?

Severance is an amount of money paid to an employee upon termination in recognition of long service with the same employer.

The Canada Labour Code provides that if you have been employed for more than one year with your employer, you are owed five days’ wages as severance pay, or two days’ wages for each complete year of service, whichever is greater.

You could be entitled to a greater severance amount than this minimum. This depends on whether you have a written employment contract and on what that contract says. It can also depend on whether your employer has a policy about severance.

What if my employer discriminated against me?

Your employer cannot terminate your employment for reasons related to prohibited grounds of discrimination set out in the Canadian Human Rights Act. These currently include:

  • race or ethnic origin
  • colour
  • religion
  • age
  • sex (including pregnancy)
  • sexual orientation
  • gender identity or expression
  • marital status
  • family status
  • genetic characteristics
  • disability (which can include injuries and mental and physical illness)
  • conviction for an offence for which a pardon has been granted or in respect of which a record suspension has been ordered

If you believe that your employer may have terminated you for a reason related to one of the above grounds, you may be able to allege that your employer discriminated against you. If discrimination based on one of the above grounds was a factor in your employer’s decision to terminate your employment, then the termination is unlawful.

What are my recourses and options?

1. Complaints to the Federal Labour Program

You can file a complaint to the Federal Labour Program if you believe your employer did not have just cause to terminate you or if you believe you were not given the correct notice and severance.

An unjust dismissal complaint must be filed within 90 days of your termination.

A complaint for unpaid wages (including notice and severance) must be filed within 6 months of your termination.

The Labour Program will assist you and your employer in trying to reach a settlement agreement. If this fails, an arbitrator will be appointed to hear your case.

If the arbitrator decides that you were dismissed without just cause, they can reinstate you to your position. If your complaint was for unpaid wages, the arbitrator can order the correct wages be paid to you.

2. Complaint to the Canadian Human Rights Commission

You may be able to file a complaint with the Canadian Human Rights Commission if you believe your termination was related to a prohibited ground of discrimination. You should file this type of complaint within 12 months of the last incident of discrimination.

The Commission will review your complaint and assess whether it is admissible. The Commission does not accept all complaints. If it does accept yours, it will assist the parties with mediation. If mediation does not result in a settlement, then the Commission can dismiss your complaint or refer it to the Canadian Human Rights Tribunal. This is a lengthy process and your allegations must have some chance of success in order to be considered by the Commission.

3. Civil action in court

You can file a civil action against your employer (i.e., sue your employer) for wrongful dismissal to try to recover fair compensation in lieu of notice and other amounts you may have lost related to your termination. This is a costly, lengthy and technical process, and is most worthwhile for those who worked many years with their employer and who are likely owed significantly more notice than what their employer gave them.

4. A negotiated settlement

A settlement is an agreement that you and your employer sign, the purpose of which is to forever put an end to any dispute between you and your employer about the termination of your employment. Simply put, the employer usually gives a sum of money and/or other benefits to the employee in exchange for the employee agreeing not to file any complaints and not to start/continue any legal actions against the employer. This means each party gets something it wants, and neither party must go through the expense and uncertainty of a legal proceeding.

Whether a settlement is fair and reasonable for both parties depends on factors like your length of service and your chances of success if you were to pursue a legal proceeding, including whether you can produce good quality evidence to support your allegations.

We recommend to most individual employees to attempt to pursue a settlement agreement if the employer is willing to negotiate. This is by far the most economical and common solution to employment disputes.

Settlements are typically confidential, meaning both you and your employer would agree not to disclose the terms and details of the settlement to others.

The takeaway

These are the bare-bones basics, but wrongful dismissal cases and their chances of success vary greatly from one to the next. Chances of success are highly dependent on many factual elements in addition to the ones we’ve mentioned above, like type of work you did, the circumstances of your employer, and whether you’ve made efforts to find new work, among many more. Conclusions about whether you were wrongfully dismissed and decisions about whether you should pursue legal action if you were should only be made after a thoughtful and careful review of your circumstances.

We welcome inquiries from employees who would like to learn more about getting legal services and representation in relation to their termination.

**Note that the Canada Labour Code’s dismissal rules do not apply to federal public servants, regardless of whether they are unionized. Federal public servants’ rights on dismissal are governed by separate federal legislation including the Financial Administration Act, the Public Service Employment Act, and the Federal Public Sector Labour Relations Act, among others.