Court Confirms That Under the Unjust Dismissal Section of the Canada Labour Code the Arbitrator Can Order Reinstatement or Compensation in Lieu:

In Hussey v Bell Mobility ( 2022 FCA 95) Justice Pelletier was reviewing the decision of a Unjust Dismissal Adjudicator who, having found that the employee was unjustly dismissed, refused to reinstate her as he was not satisfied that given the employee’s past actions and her lack of remorse and self reflection, that there existed the grounds for a viable continuing employment relationship.

In lieu of reinstatement, he ordered compensation of 8 months notice ( she had 7 years employment ) plus another 4 months compensation for losing the protection of secure employment.

The Federal Court of Appeal upheld the decision of the adjudicator in spite of the employee’s argument that she should have been reinstated as set out by the SCC in Wilson v Atomic Energy.

My Comments:

As a labour arbitrator ( I am not just a mediator) this approach has been around forever in the unionized context. Reinstatement is the default remedy but there are situations where although the employer did not have just cause, the evidence is clear that to put the grievor back into the workplace would be a disaster because of issues relating to the grievor. If the difficulty of returning the employee is the fault of the employer or other employees, then that is not a reason to deny reinstatement as otherwise you would be rewarding the wrongdoer.

The other interesting part of this decision is the math on how the adjudicator calculated the compensation. The adjudicator found that reasonable notice was 8 months and then added 4 more months for the loss of job security.

So it seems that the formula for compensation in lieu of reinstatement could be expressed as follows:

Reasonable Notice X 1.5 = Compensation in Lieu of Reinstatement.

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