CLC Adjudicators Can Easlily Order Substantial Indemnity Costs in Unjust Dismissal Cases.

In Amer v Shaw Communications (2023 FCA 237 ) Justice Gleason of the Federal Court of Appeal ruled that it is appropriate for an adjudicator under the Unjust Dismissal section of the Canada Labour Code to order substantial indemnity costs to the winning employee, even where the conduct of the Employer was not exceptionally bad .

This is what the Court said:

[100] In the case at bar, the appellant was of limited means, earning just under $40,000.00 per year when employed by the respondent. In addition, she was a single parent. Given the amount of damages awarded in the instant case, which were limited to out-of-pocket losses for a relatively short period and a modest amount of severance pay, it is entirely possible that the fees charged by the appellant’s counsel might have been close to or perhaps even exceeded the amount of damages awarded. Were this the case, the appellant would have been worse off for pursuing the complaint than she would have been had she not filed a complaint. Such a result would be the antithesis of a remedial order and defeat the purpose of the unjust dismissal provisions in the Code.

[101] On the other side of the ledger, the appellant was faced with a large respondent, with substantial resources and the ability to pay experienced labour counsel, who mounted a lengthy case over several days of hearing and through lengthy written submissions.

[102] In the circumstances, I believe that it was reasonably open to the Adjudicator to have awarded the appellant substantial indemnity costs. Anything less may well have led to a denial of any real remedy. There is ample authority from other adjudicators to support the award, and it is allowable under the jurisprudence from this Court. Moreover, the award is in keeping with the
purpose behind the unjust dismissal provisions in the Code.


My Comments:

Given the rationale of this decision, it would seem that the default position in these types of cases would be to award substantial indemnity in most Unjust Dismissal cases because the scenario that the award would be severely diminished if such costs were not awarded is true in most of these cases. Remember that this remedy is not open to managers so that most of the Complainants are modest wage earners.

The fact that a losing Complainant cannot face an adverse costs award makes this  under utilized remedy in many  ways  superior to a civil action where the usual rule is partial indemnity costs and the plaintiff could be subject to a substantial  adverse costs award.

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