Reasons for decision

Joyce Cook,

applicant,

and

Canadian Pacific Railway Company,

respondent.

The panel of the Canada Industrial Relations Board (the Board) was composed of Ms. Ginette Brazeau, Chairperson, and Mesdames Sylvie M.D. Guilbert and Jennifer Webster, Vice‑Chairpersons.

Parties’ Representatives of Record

Ms. Joyce Cook, on her own behalf;

Ms. Trisha Gain, for the Canadian Pacific Railway Company.

These reasons for decision were written by Ms. Ginette Brazeau, Chairperson.

[1] Section 16.1 of the Canada Labour Code (the Code) provides that the Board may decide any matter before it without holding an oral hearing. Having reviewed all of the material on file, the Board is satisfied that the documentation before it is sufficient for it to determine this matter without an oral hearing.

[2] The Board notes that Part III of the Code (Standard Hours, Wages, Vacations and Holidays) was amended on January 1, 2021, substituting the Head of Compliance and Enforcement (the Head) for the Minister of Labour (the Minister). In this decision, the Board will refer to the Minister where appropriate, in particular, when describing events that occurred prior to January 1, 2021.

I. Nature of the Matter Before the Board

[3] This matter involves a request for review of a decision issued by an inspector (the inspector) of the Labour Program of Employment and Social Development Canada (ESDC) regarding a wage complaint made by Ms. Joyce Cook (the applicant) under section 251.01 of the Code. The Minister declined to conduct a review and, pursuant to section 251.101(7) of the Code, referred the request for review to the Board to be treated as an appeal.

[4] The Canadian Pacific Railway Company (CP Rail or the employer) raised an objection to the Board’s ability to deal with the matter. It argues that the Board is without jurisdiction since Ms. Cook alleges that she was constructively dismissed and should have filed a complaint of unjust dismissal pursuant to section 240 of the Code. She has no right, in the employer’s view, to seek compensation for termination and severance under the wage recovery provisions of the Code given that she was eligible to file a complaint of unjust dismissal.

[5] This raises a threshold issue for the Board with respect to its ability to entertain the appeal. The Board requested and obtained detailed submissions from the parties on the employer’s objection. For the reasons that follow, the Board concludes that Ms. Cook is not entitled to claim severance and termination pay under sections 230 and 235 of the Code as she had recourse available to her under the unjust dismissal provisions of the Code.

II. Background

[6] Ms. Cook was an employee of CP Rail for 33 years. She commenced employment on July 6, 1986. Her last position with the employer was Assistant Director Safety & Environment Systems.

[7] Ms. Cook offered her letter of resignation on April 24, 2019, indicating that she would be leaving her employment on May 8, 2019.

[8] Ms. Cook filed a wage complaint with the ESDC on October 22, 2019, seeking severance pay as well as other amounts for benefits, pension and shares.

[9] In her complaint, Ms. Cook alleges that for a decade, she was subjected to unjustified demotions, bullying and abusive behaviour. She provides a chronology of events and decisions made by the employer dating back to 2012. She also states that the employer ultimately removed a number of staff members from her supervision despite her objection to the organizational changes. She indicates that it was necessary for her to resign due to the deteriorating work environment that impacted her health.

[10] CP Rail raised an objection with the inspector on March 20, 2020, taking the position that the inspector had no jurisdiction to determine the complaint due to the fact that Ms. Cook could and should have used the unjust dismissal process to deal with her alleged constructive dismissal.

[11] In her investigation, the inspector did not address this preliminary objection raised by the employer. The inspector issued a notice of unfounded complaint on July 24, 2020, indicating that there was insufficient evidence to conclude that Ms. Cook’s resignation amounted to a constructive dismissal.

[12] Ms. Cook filed a request for review of that decision with the Minister on August 6, 2020. The Minister declined to conduct her own review and, on October 13, 2020, referred the matter to the Board to be dealt with as an appeal.

[13] The employer raised a preliminary objection with respect to the Board’s ability to deal with the matter. It argues that the applicant is not eligible to claim termination and severance pay through a wage recovery complaint since she could and should have filed a complaint of unjust dismissal pursuant to section 240 of the Code.

[14] Given this objection, the Board invited the parties, including the Head, to make submissions on this preliminary issue. The Board has reviewed and considered these submissions in making its decision.

III. Positions of the Parties

A. The Employer

[15] The employer takes the position that the applicant is not eligible to claim termination or severance pay under the Code and that the Board has no jurisdiction to entertain the appeal.

[16] The employer relies on the decision of the Supreme Court of Canada (SCC) in Wilson v. Atomic Energy of Canada Ltd., 2016 SCC 29; [2016] 1 S.C.R. 770 (Wilson), to assert that an employee cannot bring a complaint seeking termination and severance pay where that employee has recourse under the unjust dismissal provisions in the Code. It submits that in Wilson, the SCC explained that termination and severance pay are only available to employees who cannot avail themselves of the unjust dismissal complaint process because they are either a manager, were laid off due to lack of work or the discontinuance of a function or have worked for less than 12 months.

[17] The employer refers to three decisions of referees that expressly considered and addressed the jurisdiction issue based on the rationale in Wilson: Scamp Transport Ltd. v. Marcille, 2017 CanLII 85802 (CA LA) (Scamp); Zora Holdings Ltd. v. Mahal, [2019] C.L.A.D. No. 196 (QL); and Total Oilfield Rentals Ltd. v. Watson (Payment Order Grievance), [2021] C.L.A.D. No. 28 (QL). In discussing Scamp, the employer states that Referee Bartel correctly applied the SCC majority’s reasoning in Wilson that the severance and termination provisions in the Code only apply to circumstances that fall outside of the unjust dismissal provisions and are not an alternative to the unjust dismissal provisions.

[18] The employer suggests that adjudicators or referees who have dealt with a wage complaint for severance and termination pay where the employee had recourse available to them under the unjust dismissal provisions of the Code may have decided the matter wrongly. It further suggests that the fact that employees have been permitted to claim termination and severance pay through a wage recovery complaint has led to confusion for federally regulated employers given the direction given by the SCC in Wilson.

[19] The employer explains that in Wilson, the SCC clarified that an employer cannot terminate an employee without just cause under the Code. This means that an employer cannot terminate an employee by simply providing the statutory minimum payments for termination and severance prescribed at sections 230 and 235 of the Code. In a case where an employee is terminated without cause, that employee has a claim for unjust dismissal and can be made whole through reinstatement and the other remedies available through this process. In the employer’s view, it logically follows that the employee cannot claim termination and severance pay through a monetary complaint when the employer is prohibited from offering these payments in the first place. The employer submits that the interpretation given to the eligibility for termination and severance pay in Wilson did not diminish an employee’s rights under the Code. Rather, it clarified that the unjust dismissal process is the recourse that must be pursued when an eligible employee has been terminated, in order to be made whole.

[20] The employer submits that the legislative amendments that were made to the Code in 2019 by adding section 251.01(3.1) and modifying section 251.01(4) were procedural in nature and did not alter substantive rights or the interpretation found in Wilson. It argues that section 251.01(3.1) confirms that an employee should not make a complaint under the wage recovery provisions of the Code if they have filed a complaint of unjust dismissal based on substantially the same facts. Similarly, it argues that the amendments made to section 251.01(4) of the Code confirm that an employee can only bring a claim for wages in addition to an unjust dismissal complaint if the wage complaint relates to an amount to which they are entitled. This section allows an employee to preserve their potential right to severance and termination pay while a determination is made under the unjust dismissal process. As such, the employer takes the position that, contrary to the Head’s view, an employee’s entitlement to termination or severance pay is still determined by the existing provisions found at sections 230 and 235 of the Code and their interplay with the unjust dismissal provisions, as enunciated in Wilson.

[21] The employer disagrees with the Head’s view that the Head’s authority to make a determination as to whether an employee was dismissed for just cause pursuant to section 251(1.1) of the Code somehow expands or otherwise impacts an employee’s entitlement to termination and severance pay. It simply allows the Head to make a determination on the threshold issue of eligibility and does not overrule or otherwise affect the requirements articulated in Wilson.

[22] The employer further submits that the difference between the time limits for filing a wage recovery claim (6 months) and a complaint of unjust dismissal (90 days) is irrelevant to whether the Board has jurisdiction to deal with the wage recovery claim. The length of time that the unjust dismissal process may take is also irrelevant. In its view, these are matters for Parliament to resolve through legislative changes if it wishes to do so.

B. The Head

[23] The Head is of the view that the Board has jurisdiction to hear the appeal.

[24] The Head points to recent amendments to the Code that came into force in April and July 2019. The Head states that these amendments were made after the SCC’s decision in Wilson and the referee’s decision in Scamp and that they make it clear that a federally regulated employee is entitled to pay in lieu of notice (termination pay) and severance pay under the wage recovery provisions of the Code even if they could have filed a complaint of unjust dismissal.

[25] The Head submits that in Wilson, the SCC confirmed that the unjust dismissal provisions in the Code eliminated the right of an employer to terminate an employee without just cause. The Head states that Wilson confirmed that the unjust dismissal provisions were intended to protect employees from wrongful dismissal and made it clear that employers cannot dismiss an employee without just cause by simply providing pay in lieu of notice and severance pay. The Head takes the position that the excerpt of Wilson relied upon by the employer (see paragraph 47) is obiter only and left “the door open” as to employees’ eligibility for termination and severance pay where they have not filed a complaint of unjust dismissal.

[26] The Head points to decisions of arbitrators and referees that have been inconsistent with respect to the interpretation of the SCC’s decision in Wilson. The Head argues that those decisions that adopted a narrow interpretation of Wilson (and in particular, paragraph 47) are not consistent with the spirit and intent of Part III of the Code and deprive employees of the right to claim their minimum entitlements under the Code.

[27] In any event, the Head also takes the position that the legislative amendments made in 2019 clarified the intent of Parliament that no restrictions apply to an employee’s choice of recourse when that employee is terminated. In particular, it points to amendments made to section 251.01(4) of the Code and cites excerpts of the departmental clause-by-clause analysis that supported the parliamentary process to indicate the intention behind the initial proposed amendments. The Head argues that the amendments removed any ambiguity that existed as a result of the SCC’s decision in Wilson and allow an employee to pursue a wage recovery claim even if they could have filed a complaint of unjust dismissal.

[28] The Head also points to the addition of section 251(1.1) to the Code, which gives the Head the authority to determine whether an employee was dismissed for just cause for the purpose of establishing that employee’s entitlement to wages or other amounts owed under Part III of the Code. In the Head’s view, the addition of this new provision provides clear authority for the Head to determine whether the employee was dismissed for just cause in the context of determining entitlements to termination and severance pay. It therefore follows that the employee can claim these amounts despite being eligible for alternative redress under the unjust dismissal complaint process.

[29] Finally, the Head argues that the Board should interpret the Code in a manner that does not deprive employees of amounts they are entitled to under sections 230 and 235 of the Code. The Board should not require employees to file unjust dismissal complaints as some may not be interested in reinstatement. The Head also submits that the unjust dismissal complaints may take longer to address, which may lead some employees to abandon their claim, and points to the different time limits for filing a complaint of unjust dismissal (90 days) compared to a wage recovery complaint (6 months). The Head argues that if the employee did not make a timely complaint of unjust dismissal, they would be without recourse, even if they filed the wage recovery complaint within the prescribed time limit. The Head indicates that this could encourage employers to not provide proper compensation on termination, anticipating that employees may not file a timely unjust dismissal complaint.

C. The Applicant

[30] The applicant states that the ESDC form that she used to file her initial complaint stipulates that the investigation is not limited to the provisions identified on the form and that it may include investigation into any provision of the Code.

[31] In her view, this means that “just cause” for her termination can be considered under the unjust dismissal provisions of the Code as well as under the wage recovery provisions.

[32] The applicant also submits that her complaint is materially different from the complaints considered in Scamp and Wilson. She indicates that the employer should not be allowed to escape the scrutiny of an adjudicator when an employee challenges the lawfulness of their dismissal.

[33] Ms. Cook reiterates the chronology of events surrounding her performance appraisal of 2017 and her return to work in February 2019. She takes the position that she had no choice but to resign from her employment in light of the ongoing humiliation tactics and toxic work environment.

IV. Analysis

[34] In July 2019, certain amendments were made to Part III of the Code through Bill C-44 (see Budget Implementation Act, 2017, No. 1). Through these amendments, responsibility for the adjudication of wage recovery appeals and unjust dismissal complaints was transferred to the Board. This contrasts with the previous regime in which these complaints or appeals were determined by ad hoc adjudicators or referees appointed by the Minister.

[35] The Board first noted the potential issue with respect to an employee’s entitlement to termination and severance pay in cases where there is a potential claim for an unjust dismissal in M and C Commodities Inc., 2020 CIRB 955. The Board described the issue as follows:

[4] Before delving into the analysis of the just cause issue, the Board would like to note that there is some question as to the respondent’s eligibility to file a wage recovery complaint in light of the comments of the Supreme Court of Canada (SCC) in Wilson v. Atomic Energy Canada Limited, 2016 SCC 29; [2016] 1 S.C.R. 770. In that decision, the SCC addressed whether an employer could dismiss a non-unionized employee on a without-cause basis under the Code. In doing so, it commented on the interplay between an employee’s rights under the unjust dismissal regime and entitlements under the wage recovery framework. The majority’s comments appear to suggest that if an employee is able to file a complaint under the unjust dismissal regime, they may not also be eligible to file a wage recovery complaint for termination pay and severance pay (see paragraph 47 of that decision). However, this issue was not raised by or with the inspector, nor was it raised by the parties during these proceedings. Considering the circumstances and the ultimate outcome on the just cause issue, the Board will only address the issue of just cause in this decision.

[36] The present case is the first in which the issue was raised directly by one of the parties as a challenge to the inspector’s and the Board’s authority to deal with the matter.

[37] As we assess the Board’s ability to take jurisdiction and adjudicate Ms. Cook’s appeal relating to her wage complaint seeking termination and severance pay, it is important to review the relevant sections of the Code.

[38] Section 230(1) of the Code establishes the minimum statutory entitlement for termination pay, and section 235(1) of the Code does so for severance pay. These sections state the following:

230 (1) Except where subsection (2) applies, an employer who terminates the employment of an employee who has completed three consecutive months of continuous employment by the employer shall, except where the termination is by way of dismissal for just cause, give the employee either

(a) notice in writing, at least two weeks before a date specified in the notice, of the employer’s intention to terminate his employment on that date, or

(b) two weeks wages at his regular rate of wages for his regular hours of work, in lieu of the notice.

…

235 (1) An employer who terminates the employment of an employee who has completed twelve consecutive months of continuous employment by the employer 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.

(emphasis added)

[39] If an employee believes that their employer has contravened a provision under Part III of the Code, such as section 230 or section 235, they may make a complaint to the Head. Complaints of this nature are filed pursuant to section 251.01(1) of the Code, which reads as follows:

251.01 (1) Any employee may make a complaint in writing to the Head if they believe that the employer has contravened

(a) any provision of this Part or of the regulations made under this Part; or

(b) any order.

[40] Where an employee has been dismissed and is of the view that the employer had no cause to dismiss them, they may file a complaint of unjust dismissal pursuant to section 240 of the Code:

240 (1) Subject to subsections (2) and 242(3.1), a person who has been dismissed and considers the dismissal to be unjust may make a complaint in writing to the Head if the employee

(a) has completed 12 consecutive months of continuous employment by an employer; and

(b) is not a member of a group of employees subject to a collective agreement.

(1.1) A person shall not make a complaint under subsection (1) if they have made a complaint that is based on substantially the same facts under either subsection 246.1(1) or 247.99(1), unless that complaint has been withdrawn.

[41] In the case of Wilson, the SCC was considering a complaint of unjust dismissal and confirmed that under the Code, an employer could not terminate an employee without cause by simply providing the statutory payments for termination and severance. The majority of the SCC found that the purpose of the statutory scheme in Part III of the Code was to essentially provide non-unionized employees in the federally regulated sector with rights and protections analogous to those available to employees covered by a collective agreement. It concluded that these employees are entitled to protection from being dismissed without cause and that permitting employers to deprive employees of the full remedial measures available for unjust dismissal by providing termination and severance pay would defeat the statutory purpose and was not a reasonable outcome.

[42] In coming to this conclusion, Justice Abella (writing for the majority of the SCC on the merits) examined the origins of the unjust dismissal provisions in Part III of the Code and made the following observations:

[41] As previously noted, Parliament passed amendments to the Code in 1971 which included provisions setting out the minimum remuneration owed to an employee whose employment had been terminated if that employee worked for a threshold number of consecutive months and was not dismissed for just cause. These provisions are now found in ss. 230(1) and 235(1) of the Code, both in Part III. The enactment of these provisions neither codified nor extinguished the common law; instead, it offered an alternative to going to court by setting out minimum entitlements for dismissed employees who wanted to avoid the expense and uncertainty of civil litigation: Arthurs Report, at pp. 172–74.

[42] In 1978, Parliament further amended the Code and established the Unjust Dismissal scheme, currently found in ss. 240 to 246 in Part III of the Code. The central question in this case is what effect the 1978 amendments had on the rights of non-unionized employees whose employment had been terminated. When the provisions were introduced, the then Minister of Labour, the Hon. John Munro, said:

It is our hope that [the amendments] will give at least to the unorganized workers some of the minimum standards which have been won by the organized workers and which are now embodied in their collective agreements. We are not alleging for one moment that they match the standards set out in collective agreements, but we provide here a minimum standard. [Emphasis added.]

(House of Commons Debates, vol. II, 3rd Sess., 30th Parl., December 13, 1977, at p. 1831)

[43] He explained the purpose of the new “Unjust Dismissal” provisions to the Standing Committee on Labour, Manpower and Immigration in March 1978 as follows:

The intent of this provision is to provide employees not represented by a union, including managers and professionals, with the right to appeal against arbitrary dismissal—protection the government believes to be a fundamental right of workers and already a part of all collective agreements.

(House of Commons, Minutes of Proceedings and Evidence of the Standing Committee on Labour, Manpower and Immigration, Respecting Bill C-8, An Act to amend the Canada Labour Code, No. 11, 3rd Sess., 30th Parl., March 16, 1978, at p. 46)

[44] The references in this statement to the right of employees to “fundamental” protection from arbitrary dismissal and to the fact that such protection was “already a part of all collective agreements”, make it difficult, with respect, to draw any inference other than that Parliament intended to expand the dismissal rights of non-unionized federal employees in a way that, if not identically, then certainly analogously matched those held by unionized employees.

[45] Parliament’s intentions were also on display when, the previous August, the Minister acknowledged that while the terminology of “just” and “unjust” was, on its face, ambiguous, the extensive arbitral jurisprudence from organized labour would illuminate the way forward for non-unionized federal employees who were dismissed:

I realize that the terms “just” or “unjust” are sometimes difficult to define. However, we have a vast body of arbitral jurisprudence on dismissals in the organized sector. They contain precedents that will enable arbitrators to determine whether a firing is warranted or not. Each case has to be decided according to its circumstances, but the application of the principles of fairness and common sense have established pretty clearly what constitutes just or unjust dismissal.

(The Hon. John Munro, “A better deal for Canada’s unorganized workers” (1977), 77 The Labour Gazette 347, at p. 349)

[46] And this, in fact, is how the new provisions have been interpreted by labour law scholars and almost all the adjudicators appointed to apply them, namely, that the purpose of the 1978 provisions in ss. 240 to 246 was to offer a statutory alternative to the common law of dismissals and to conceptually align the protections from unjust dismissals for non-unionized federal employees with those available to unionized employees: Geoffrey England, “Unjust Dismissal in the Federal Jurisdiction: The First Three Years” (1982), 12 Man. L.J. 9, at p. 10; Innis Christie, Employment Law in Canada (2nd ed. 1993), at p. 669; Arthurs Report, at p. 172.

[47] The effect of the 1978 amendments was to limit the applicability of the notice requirements in s. 230(1) and the minimum severance provisions in s. 235(1) to circumstances that fell outside the Unjust Dismissal provisions. The notice and severance pay requirements under ss. 230(1) and 235(1), for example, apply to managers, those who are laid off due to lack of work or discontinuance of a function, and, in the case of s. 230(1), employees who have worked for the employer for more than 3 consecutive months but less than 12 months. In other words, ss. 230(1) and 235(1) are not an alternative to the Unjust Dismissal provisions in ss. 240 to 246, they apply only to those who do not or cannot avail themselves of those provisions: Redlon Agencies, at paras. 38015039; Wolf Lake First Nation v. Young (1997), 130 F.T.R. 115, at para. 50.

…

[63] In fact, the foundational premise of the common law scheme—that there is a right to dismiss on reasonable notice without cause or reasons—has been completely replaced under the Code by a regime requiring reasons for dismissal. In addition, the galaxy of discretionary remedies, including, most notably, reinstatement, as well as the open-ended equitable relief available under s. 242(4)(c), are also utterly inconsistent with the right to dismiss without cause. If an employer can continue to dismiss without cause under the Code simply by providing adequate severance pay, there is virtually no role for the plurality of remedies available to the adjudicator under ss. 240 to 245.

(Wilson)

[43] There is little doubt from the SCC majority’s reasoning in Wilson that the scheme developed in Part III of the Code was meant to provide non-unionized employees with protection from unjust dismissal comparable to that afforded to employees covered by a collective agreement. Further, the SCC indicated that the 1978 amendments not only offered an alternative to the common law approach to termination but also displaced the applicability of minimum termination and severance payments in cases where employees have access to broader remedial measures under the unjust dismissal provisions of the Code.

[44] The Board notes that its understanding of the SCC majority’s statement of the law was adopted and applied by a referee in the context of a wage recovery appeal in Scamp. In that case, Mr. Mark Marcille had filed a monetary complaint claiming unpaid wages, termination pay and severance pay relating to his dismissal. Following an investigation, the inspector determined that Mr. Marcille had been dismissed without just cause and, as such, issued a payment order for termination and severance pay. The employer filed a request for review, which resulted in the Minister confirming the payment order. The employer then appealed this decision pursuant to section 251.11(1) of the Code, arguing that it had just cause to terminate Mr. Marcille as he had engaged in serious and willful misconduct. As a result, the matter was referred to a wage recovery referee pursuant to section 251.12(1) of the Code.

[45] Mr. Marcille had been employed for more than 12 months at the time of his dismissal and was not subject to a collective agreement. He was also not a manager and had not been terminated for administrative reasons. Based on these circumstances, Referee Bartel determined that Mr. Marcille could have filed an unjust dismissal complaint under section 240 of the Code but had chosen not to do so.

[46] More importantly, in light of the comments made by the SCC in Wilson and by the Federal Court in Wolf Lake First Nation v. Young, 1997 CanLII 5057 (CF), Referee Bartel found that Mr. Marcille was not entitled to claim termination and severance pay through the wage recovery provisions of the Code. This was because the notice requirements in section 230(1) of the Code and the minimum severance requirements in section 235(1) of the Code only applied to circumstances that fell outside the scope of the unjust dismissal provisions and were not an alternative to them (see paragraph 30).

[47] Referee Bartel reasoned that if an employer cannot unilaterally terminate an employee by providing statutory termination and severance pay, it follows that an employee should not be able to claim termination and severance pay through a complaint under the Code. She made this point as follows:

29. Third, this result is consistent conceptually with the Wilson decision. If it is the case that an employer cannot arbitrarily terminate an employee “without cause” by providing termination and severance pay, as the judgment in Wilson confirmed, it is difficult conceptually to understand how an employee could make that choice—and access those same payments for a “without cause” dismissal—by making a Wage Recovery Complaint instead of an Unjust Dismissal Complaint. An employee cannot seek via the back door what an employer cannot do via the front.

(Scamp)

[48] In the present matter, the Head argues that other referees have taken a different approach and have entertained claims for termination and severance pay in cases where the employee could have filed an unjust dismissal complaint. This may be the case, but none of those decisions dealt with the jurisdictional issue as it was not raised by a party in the proceeding. It is also of note that the Minister (now the Head) took jurisdiction and processed these monetary claims as a matter of course.

[49] The Head also argues that the legislative amendments of 2019 addressed the confusion created by the Wilson decision and made it clear that employees could access termination and severance pay through a wage recovery complaint despite having recourse under the unjust dismissal provisions.

[50] The Board disagrees with the Head’s assessment.

[51] First, it is helpful to compare the changes that were made to certain sections of the Code, in both their English and French versions.

Section of the Code	Prior to the 2019 Amendments	After the 2019 Amendments
251.01(3.1)	Did not exist	Limitation   (3.1) An employee shall not make a complaint under subsection (1) if they have made a complaint that is based on substantially the same facts under any of subsections 240(1), 246.1(1) and 247.99(1), unless that complaint has been withdrawn.   Restriction   (3.1) Si l’employé a déposé une plainte en vertu des paragraphes 240(1), 246.1(1) ou 247.99(1) il ne peut déposer, en vertu du paragraphe (1), une plainte fondée essentiellement sur les mêmes faits, à moins de retirer la première.
251.01(4)	Limitation   (4) An employee is not permitted to make a complaint under subsection (1) if the complaint is that the employee has been dismissed and considers the dismissal to be unjust.                     Restriction   (4) Un employé ne peut se prévaloir du paragraphe (1) pour déposer une plainte au motif qu’il se croit injustement congédié.	Exception   (4) Despite subsection (3.1), the employee may file a complaint under subsection (1) if it relates only to the payment of their wages or other amounts to which they are entitled under this Part, including amounts referred to in subsections 230(1) and 235(1), but that complaint is suspended until the day on which the complaint made under subsection 240(1), 246.1(1) or 247.99(1), as the case may be, is withdrawn or resolved.   Exception   (4) Malgré le paragraphe (3.1), l’employé peut déposer une plainte en vertu du paragraphe (1) si elle ne vise qu’à obtenir le versement de tout salaire ou autre indemnité auxquels il a droit sous le régime de la présente partie, notamment aux termes des paragraphes 230(1) et 235(1), auquel cas elle est suspendue jusqu’à ce que la plainte visée aux paragraphes 240(1), 246.1(1) ou 247.99(1) soit retirée ou réglée.

 

[52] The legislative amendments at sections 251.01(3.1) and (4) indicate that an employee cannot pursue claims that are based on the same set of events under two separate provisions of the Code at the same time. The Board sees nothing in these amendments that provide for a different approach than the interpretation and rationale offered by the SCC in Wilson. In fact, the amendments are helpful in that they clarify that an unjust dismissal complaint must proceed first or be dealt with before a complaint for unpaid wages based on substantially the same facts can be addressed by the Head. They also allow an employee to protect their rights in the event that, through the unjust dismissal complaint, it becomes apparent that the employee is not eligible because it is determined, for example, that they are a manager or were terminated due to lack of work.

[53] The Board agrees with the employer’s view that these amendments did not establish new rights but rather clarified the process for filing the claims. The entitlements to termination and severance pay are determined based on the interpretation and application of sections 230, 235 and 240 of the Code, and those sections remain unchanged since Wilson was decided.

[54] Second, it is important to consider the rationale and basis for the decision of the majority of the SCC in Wilson. The SCC reasoned that when Parliament enacted the unjust dismissal provisions in the Code in 1978, it eliminated the employer’s ability to dismiss an employee by providing the minimum payments for termination and severance and provided unrepresented employees with rights and protection comparable to those available to employees covered by a collective agreement. In other words, it displaced the minimum standards at sections 230 and 235 of the Code for greater rights and protections. An eligible employee covered by the Code has a right to continued employment and can only be dismissed where the employer can demonstrate just cause. Where an employee is dismissed without just cause, they are entitled to broader remedies than the minimum entitlements; namely, reinstatement and other equitable remedies. As is evident from the SCC majority’s reasoning in Wilson, it is the legislative amendments of 1978 that established this unique regime for unrepresented employees in federally regulated industries; this represents a key distinction in employment law when compared to various provincial employment standard regimes.

[55] In the Board’s view, the amendments made to the Code in 2019 did not reverse the basis for this interpretation of the majority of the SCC in Wilson. The amendments did not change the substantive rights that the unjust dismissal regime provides for terminated employees.

[56] The Head refers to the departmental clause-by-clause analysis that was prepared in support of the 2019 legislative amendments and submits that the objective of the amendments made to section 251.01 of the Code was to remove any ambiguity regarding an employee’s ability to pursue the remedy that best suits them, whether that is a monetary complaint pursuant to section 251.01 or an unjust dismissal complaint pursuant to section 240.

[57] The following excerpt was included in the departmental clause-by-clause document prepared in support of the parliamentary process regarding the Budget Implementation Act, 2017, No. 1 (Bill No. 1), Part 4—Division 17:

41. …

Clause 359

Part III of the Code currently has two distinct complaint mechanisms: one for employees who wish to remedy an unjust dismissal (which has a number of eligibility requirements) and another for those who wish to recover unpaid wages and other amounts, including severance and termination pay.

Subsection 251.01(4) of the Code currently provides that an employee who wishes to file a complaint for unjust dismissal must do so under the appropriate mechanism (subject to applicable eligibility criteria). However, this provision has been interpreted by some referees under the Code as restricting employees’ ability to file a wage complaint to recover severance and termination pay. The proposed amendment in clause 359 clarifies that there is no such restriction: former employees who decide not to file an unjust dismissal complaint may avail themselves of the Code’s wage recovery process to ensure the payment of any wages or other amounts to which they are entitled under Part III.

[58] The Head explains that the amendment that was contained in this bill (Bill No. 1) and described in the above excerpt is not the ultimate version that came into force. The version of the relevant sections that was adopted by Parliament was contained in the Budget Implementation Act, 2018, No. 2 (Bill No. 2). The departmental clause-by-clause analysis developed to explain these provisions during the parliamentary process reads as follows:

44. …

Subsection 251.01(4) currently states that an employee is not permitted to make a monetary or non-monetary complaint under subsection 251.01(1) if the complaint is that the employee has been dismissed and considers the dismissal to be unjust.

This subclause renumbers the existing subsection 251.01(4) as subsection (3.1) and amends it to clarify that an employee is not permitted to file a monetary or non-monetary complaint if they have already made an unjust dismissal compliant [sic], a reprisal complaint or a genetic testing complaint with respect to substantially the same facts, unless it has been withdrawn.

Subsection (4) is then replaced with a new provision, which provides that employees who decide to file an unjust dismissal complaint, a reprisal complaint or a genetic testing complaint can avail themselves of the Code’s wage recovery process if the complaint filed under 251.01(1) relates only to the payment of their wages or other amounts to which they are entitled under Part III (including severance and termination pay). In that case, the complaint is suspended until the day on which the unjust dismissal, reprisal or genetic testing complaint is resolved or withdrawn.

[59] The departmental material prepared for the parliamentary process is of little assistance in this case. It can be assumed that parliamentary committees considered the material in assessing the amendments, but there is no record of this issue being addressed at all in the debates and consideration of the two bills. In any event, the clause-by-clause analysis does not fully canvass the issue analyzed in Wilson, which clearly established that the unjust dismissal regime in the Code displaced the statutory minimum payments for termination and severance for all except those who are barred by statute from making an unjust dismissal complaint. The Board cannot conclude from the relevant excerpts of the clause-by-clause analysis that parliamentarians turned their minds to the central issue of whether or not to change or reverse the fundamental right of employees to the broad and equitable remedies for unjust dismissal.

[60] When considering the legislative history and the rationale in Wilson, the Board is of the view that the addition of the current language at sections 251.01(3.1) and (4) does nothing more than clarify an employee’s ability to file a claim to protect their rights and does not change the intent of, and substantive rights contained in, the unjust dismissal provisions of the Code. In this sense, the Board agrees with the employer’s submissions that these legislative amendments were procedural in nature and were not sufficient to change the substantive rights of employees and the legal obligations of employers. There were no amendments to sections 230, 235 or 240 of the Code, which establish the rights and entitlements of employees in cases of termination.

[61] Third, there exists a key notion in legislative interpretation that the provisions of a statute must be given a logical and coherent interpretation (see Ruth Sullivan, Sullivan on the Construction of Statutes, 6th ed. (Ottawa: LexisNexis, 2014), at paragraphs 10.37 and 11.2). In Wilson, the SCC confirmed that it was the intention of Parliament to prohibit an employer from terminating an employee without just cause by simply providing the statutory payments for termination and severance. As discussed by Referee Bartel in Scamp, it is therefore conceptually difficult to accept an interpretation of Part III of the Code that would allow an employee to claim those same statutory payments on the basis that they were dismissed without cause. Said another way, the Board has great difficulty accepting an interpretation that would allow an employee to claim statutory termination and severance pay when the employer is prohibited from offering such payments to an employee it wishes to terminate. This interpretation is likely causing confusion for employers who, on the one hand, are not allowed to terminate an employee without cause by compensating them with termination and severance pay but, on the other hand, are directed by the Head to pay these statutory entitlements through a wage claim. In the Board’s view, such an interpretation is not coherent, as it leads to an incongruous result.

[62] Finally, if the intent of the 1978 amendments was to provide rights to unrepresented employees that are analogous to those available to employees covered by a collective agreement, then the recourse and remedies should be substantially similar.

[63] Employees covered by a collective agreement who have been terminated without cause would normally have recourse through the grievance process to challenge that termination. The arbitral jurisprudence generally provides that those employees have a right to reinstatement or, in cases where that is not appropriate, proper compensation that generally exceeds the statutory minimum standards. These employees do not have alternative options to claim termination and severance pay through another process. They may well negotiate a settlement with the assistance of their bargaining agent or through mediation. However, those settlement discussions would be grounded in their right to not be terminated without cause and a wide range of remedies as established in the arbitral jurisprudence. This can result in significantly different settlements than the statutory minimum entitlements.

[64] Similarly, unrepresented employees who fall under Part III of the Code, who have been terminated and who are eligible to seek redress through the unjust dismissal regime should be able to challenge that termination and have access to the potential remedies that are available to them. This is consistent with the SCC majority’s view expressed in Wilson. It is the strict enforcement of this framework that will provide substantive rights and protection to these employees that parallel those of unionized employees.

[65] Contrary to the Head’s contention, this interpretation does not deprive employees of minimum entitlements. Rather, it emphasizes the fact that the minimum entitlements for those eligible employees are reinstatement in employment, back pay and other appropriate remedial measures. These are greater rights and entitlements than the statutory minimum standards and should be the basis for potential remedies where an employer cannot demonstrate just cause for termination.

[66] It is likely, as indicated by the Head, that certain employees may simply want to obtain termination and severance pay and sever the relationship with the former employer. They may not wish to proceed with an unjust dismissal complaint through the adjudicative process. However, this argument does not convince the Board that its interpretation is wrong. Even if an employee proceeds with a wage claim under section 251.01 of the Code, the employer may raise an objection alleging that the termination was for just cause and challenge the inspector’s payment order. This would also result in an adjudicative process through a statutory appeal before this Board.

[67] The fact that an unjust dismissal complaint involves an adjudicative process is not determinative of the interpretation to be given to the Code. In any event, the typical difficulties experienced by complainants in an adjudicative process may be lessened by the fact that in unjust dismissal complaints, the onus is on the employer to prove that it had just cause for termination. In addition, the unjust dismissal complaint process does not preclude the parties from entering into a settlement to resolve the complaint. However, settlement discussions in that context would be based on the right to reinstatement, lost wages for the full period of unemployment and other equitable remedies. These are greater entitlements than the statutory minimum entitlements for termination and severance pay. Through this complaint process, employees have access to better protection and broader remedies.

[68] Further, the Board does not accept the Head’s contention that such an interpretation may lead employers to dismiss employees without cause as employees will be reluctant to proceed with an unjust dismissal complaint or may miss the time limit for filing the complaint. The Board is not prepared to infer nefarious intentions on the part of employers; most act in good faith. In any case, the fact that the time limits for filing a complaint may differ is not material to the interpretation to be given to the substantive rights of employees. There may be opportunities to better inform employees of their rights and to guide them at the initial stage of their complaint so they are directed to the right recourses in a timely manner. Alternatively, the Head could pursue legislative amendments to align the time limits that are applicable to these different recourses under Part III of the Code.

[69] For these reasons, the Board finds that Ms. Cook is not able to claim termination and severance pay pursuant to sections 230 and 235 of the Code. There were no submissions or arguments presented indicating that Ms. Cook was not eligible to file a complaint of unjust dismissal; therefore, she should have pursued the unjust dismissal process under the Code.

[70] With respect to Ms. Cook’s contention that the ESDC monetary complaint form contains a statement that the investigation may include any provision of Part III of the Code, the Board notes that the Code contains separate regimes for unjust dismissal complaints and wage recovery complaints. The ESDC has separate forms for each type of complaint, and it therefore seems doubtful that the statement on the form is intended to be read the way Ms. Cook asserts. Regardless, a statement on an ESDC form cannot operate to somehow broaden the Board’s jurisdiction. This is because the Board’s jurisdiction is limited to that set out in the Code. The Board has jurisdiction to consider unjust dismissal complaints under section 242(3) and to consider appeals relating to wage recovery complaints under sections 251.101(7) and 251.11(1) of the Code. In the present case, there is no unjust dismissal complaint before the Board.

V. Conclusion

[71] Given the Board’s finding that Ms. Cook was not entitled to claim severance and termination pay under sections 230 and 235 of the Code, the Board does not have the jurisdiction to consider her appeal. The Board will therefore not proceed to consider or determine the correctness of the inspector’s findings with respect to constructive dismissal.

[72] Consequently, the appeal is dismissed.

[73] This is a unanimous decision of the Board.

	____________________ Ginette Brazeau Chairperson
____________________ Sylvie M.D. Guilbert Vice-Chairperson		____________________ Jennifer Webster Vice-Chairperson