FEDERALLY REGULATED EMPLOYEES AND TERMINATION
PART III of Canada’s Labour Code (the “Code”) governs the Standard Hours, Wages, Vacations and Holidays for federally regulated employees. If you are employed by one of the following businesses and industries, most likely your working in a federally regulated sector:
• Marine shipping, ferry and port services;
• Air transportation, including airports, aerodromes and airlines;
• Railway and road transportation that involves crossing provincial or international borders;
• Canals, pipelines, tunnels and bridges (crossing provincial borders);
• Telephone, telegraph and cable systems;
• Radio and television broadcasting;
• Many First Nation activities; and
• Most federal Crown corporations.
Individual Termination of Employment
Except where otherwise prescribed by regulation an employee is deemed terminated when the employer lays off the employee. An employee who has completed at least three consecutive months of employment must be provided with two weeks notice or two weeks wages if they are dismissed without cause.
Terms or Conditions of Employment
Moreover, §231 of the Code specifies that where notice is given by an employer pursuant to subsection 230(1), the employer (a) shall not thereafter reduce the rate of wages or alter any other term or condition of employment of the employee to whom the notice was given except with the written consent of the employee; and (b) shall, between the time when the notice is given and the date specified therein, pay to the employee his regular rate of wages for his regular hours of work.
Expiration of notice
Where an employee to whom notice is given by his employer pursuant to subsection 230(1) continues to be employed by the employer for more than two weeks after the date specified in the notice, his employment shall not, except with the written consent of the employee, be terminated except by way of dismissal for just cause unless the employer again complies with subsection 230(1) in respect of the employee.
Employees Serving 1 year or more
Under the Canada Labour Code, employees serving 1 year or more with an employer cannot be terminated unless by layoff or for misconduct that warrants an immediate dismissal (known as a ‘summary dismissal’) See, Wilson v. Atomic Energy of Canada Ltd., 2016 SCC 29 (CanLII). Subject to §235 (1) of the Code, an employer who terminates the employment of an employee who has completed twelve consecutive months of continuous employment shall, except where the termination is by way of dismissal for just cause, pay to the employee the greater of:
(a) two days wages at the employee’s regular rate of wages for his regular hours of work in respect of each completed year of employment that is within the term of the employee’s continuous employment by the employer, and
(b) five days wages at the employee’s regular rate of wages for his regular hours of work
Specifically, an employer cannot terminate an employee without there being misconduct that is serious enough to warrant a termination. The only way employment can come to an end is if there is ‘just cause’ (misconduct deserving of a termination) or layoff due to a slowdown in business.
236 The Governor in Council may make regulations for the purposes of this Division prescribing circumstances in which a lay-off of an employee shall not be deemed to be a termination of the employee’s employment by his employer.
Under the Code, employees (except for managers), who have worked for at least 12 continuous months with the same employer and who are not covered by a collective agreement, can make a complaint if they have been dismissed and consider the dismissal unjust. Complaints must be made to the Labour Program within 90 days from the date of dismissal. Unjust dismissal generally refers to situations where the employee believes that there was no legal or valid reason to fire them and they were not given reasonable notice or compensation when they were fired.
Extension of time
The Minister may extend the period to file a complaint beyond 90 days: a) in any circumstances prescribed by regulation or b) if the complaint was timely made to a government official who the complainant erroneously believed had authority to deal with the complaint.
Complaint not settled
If a complaint is not settled within a period deemed reasonable by an Inspector, the complaint shall be referred to the Board on written request of the Complainant. If the complaint is left dormant, the Inspector will advise the Complainant they have the right to refer the matter to the Board. If the Complainant does not request a referral to the Board within 30 days, the inspector may deem the complaint withdrawn. Once the complaint has been referred to the Board they may accept, suspend, or reject the complaint. If the Board determines that the Complainant was unjustly dismissed the Board may order the employer 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.
Every order of the Board is final and shall not be questioned or reviewed in any court.
Unjust dismissal may also include cases of “constructive dismissal” where the employer:
- has not directly fired an employee, but has failed to comply with a material term of the employment contract,
- has unilaterally and substantially changed the terms of employment (which usually means changing the employees’ duties significantly), or
- has expressed an intention to do either or both of these.
Constructive Dismissal often occurs in situations where the employee is offered the alternative of leaving or submitting to a unilateral and substantial alteration of a fundamental term or condition of his/her employment. Whether or not there has been a constructive dismissal is based on an objective view of the employer’s conduct and not merely on the employee’s perception of the situation.
It is the employer’s failure to meet its contractual obligations that distinguishes a constructive dismissal from an ordinary resignation. The seriousness of the employer’s failure as well as the amount of deliberation apparent in its actions are also important factors. Generally, if the employee clearly indicates non-acceptance of the new conditions of employment to the employer, there has been a constructive dismissal only if the employee leaves within a reasonable period of time. By not resigning, the employee indicates his/her acceptance of the new conditions of employment.
For the purposes of determining whether or not a complaint has been filed within the 90-day time period as required by s.240(2), a constructive dismissal takes place at the time the employer changes the terms and conditions of employment. In order to be admissible, the complaint must be filed within 90 days of that time, unless the complainant qualifies for an extension of the time to file under s.240(3).
The unjust dismissal provisions in section 240 of the Canada Labour Code cover unjust constructive dismissals as well as those unjust dismissals made by the open unambiguous action of the employer. See, Srougi v. Lufthansa German Airlines,  F.C.J. Nº 539.
As a federally regulated employee, you are entitled to a recourse mechanism when your employer has retaliated against you for exercising your rights under the Code.
You may file a complaint in writing with the Canada Industrial Relations Board (the “Board”) if you believe that your employer took any of the following reprisals against you:
- laying off or demoting
- imposing a financial or other penalty, or
- discipline for filing a complaint under Part III of the Code
 The phrase “constructive dismissal” describes situations where the employer has not directly fired the employee. Rather the employer has failed to comply with the contract of employment in a major respect, unilaterally changed the terms of employment or expressed a settled intention to do either thus forcing the employee to quit.