Non-unionized, non-supervisory employees have access to adjudication under the Canada Labour Code. One of the remedies available to the dismissed employee (“the complainant”) under the Code is reinstatement.
It has been clear for some time that reinstatement for non-unionized employees is not an absolute right under the Code: Atomic Energy of Canada Ltd. v. Sheikholeslami,1998 CanLII 9047 (FCA).
The Federal Court recently examined this remedy in Bank of Montreal v. Sherman, 2012 FC 1513 (CanLII).
The complainant’s employment of 22 years was terminated because of performance issues, including negligent management of money. At termination she was given 68 weeks of salary continuation. At adjudication, the employer conceded that the employee had been terminated without cause. The issue to be determined – over ten days of hearing – was the appropriate remedy.
The adjudicator relied on the seven criteria set out in Yesno v Eabametoong First Nation Education Authority, [2006] CLAD No 352. Those seven criteria are set out at paragraph 11 of the Federal Court decision and the court endorses them. I have condensed them into the following categories:
- The lack of trust or diminished trust in the the relationship (more important the higher up in the hierarchy the employee was).
- The employee’s actions or behaviours that justified some lesser sanction than dismissal.
- The attitude on the part of the employee and a finding that reinstatement would bring no improvement.
- The ability of the employee to start work immediately.
- Organizational change that makes reinstatement impossible (abolition of position, layoffs, bankruptcy, etc.).
Related to organizational change is the impact of reinstatement on other employees. Reinstatement is generally not ordered when to do so would require the layoff of another employee. In Royal Bank of Canada v Cliche, [1985] FCJ No 424 at p 3 , the Federal Court stated:
To carry [the order] out, the employer must either create a new position or free up an existing position by dismissing or transferring the employee already occupying it. The wrongful nature of such a remedy is immediately apparent: either the employer is being required to increase or reorganize its staff, or it will have to infringe the rights of an innocent third party.
The adjudicator found that the relationship with the branch manager had deteriorated but that the other factors were not relevant. He ordered reinstatement to a different bank branch within a specific geographic area.
The adjudicator also considered the failure of the employer to investigate the employee’s harassment complaint in reaching the decision to reinstate: he characterized the evidence on the treatment of her harassment complaint as “pivotal in tilting this Award in her favour”.
The Federal Court found that the adjudicator’s remedy of reinstatement was not reasonable for the following reasons: he did not consider her acts of negligence in managing money; he ordered reinstatement in the face of evidence that someone would have to be laid off in order to reinstate the complainant; and he improperly considered the employer’s conduct relating to the harassment complaint in ordering reinstatement. The remedial power of reinstatement is intended to compensate the employee, not punish the employer, the court noted.
The court remitted the case back to the adjudicator to determine whether further compensation (in addition to the 68 weeks already provided by the employer) was justified.
Up to this point, there is nothing surprising in the court’s decision.
However, the court also ordered the employer to provide the complainant with a letter of recommendation indicating that she performed in her position in a satisfactory manner during her career. If the parties could not agree on the content of the letter, the issue would return to the court for determination.