In other words, a Federally regulated employer, for example a bank or cable company, cannot simply dismiss an employee on a “without cause” basis and provide severance arrangements.  Dismissed employees in these circumstances can file unjust dismissal complaints and seek reinstatement.

The Wilson v. Atomic Energy decision considered the circumstances of a four and a half year employee with a clean disciplinary record.  The employee was dismissed on a “without cause” basis and provided with a severance package.  He challenged the decision and filed an unjust dismissal complaint.  Although successful at adjudication, the decision was overturned at the Federal Court and Federal Court of Appeal levels and worked its way up to the Supreme Court of Canada.

Writing for herself and five other Supreme Court justices, Abella J reviewed the history of the Canada Labour Code’s unjust dismissal provisions, which were enacted in 1978.  She concluded that the purpose of these enactments was to ensure that non-unionized Federally regulated employees would be entitled to protection from dismissal without cause.  Federally regulated employees, she concluded, enjoy “fundamental protection from arbitrary dismissal” even with pay.

Although there are certain exceptions including situations involving the “discontinuance of a function” or a “lack of work,” this Supreme Court decision makes it abundantly clear that employers in the Federally regulated sector cannot simply terminate the employment of most employees.

This decision could greatly increase the number of unjust dismissal complaints in Federally regulated workplaces.  For example, any non-managerial employee, with one year or more of service, working for a Canadian bank can seek reinstatement if the employee is dismissed on a “without cause” basis, even if a severance package is provided.  This would, of course, invalidate the minimum type severance provisions that some Canadian banks have tried to use in their employment contracts with employees.

Employees who have been dismissed by a Federally regulated employer must file the unjust dismissal complaint within 90 days of the dismissal.  If not, it appears from the decision that the employee loses the right to this statutory framework and is left with common law remedies alone.

Three of the Supreme Court justices endorsed a vigorous dissent in which they would have held that the Canada Labour Code is, essentially, procedural and does not override Canadian common law.  The minority interpretation would have gutted the Code of any real meaning for Federal employees.

The dissenting justices correctly highlighted the fact that a Federally regulated employee can lose his or her protection if the employee misses the 90 day timeline.  Perhaps a future court decision will enable employees to use the civil courts, if necessary, to enforce the unjust dismissal provisions if the deadline has been missed.  However, for now, dismissed employees and their counsel should ensure that they file an unjust dismissal complaint within the 90 day time period.

It is interesting that the Supreme Court, in both the minority and majority reasons, chose to comment on the common law standards of dismissal by way of obiter.  The court noted that, at common law, employers can dismiss employees “for whatever reason they want so long as they give reasonable notice or pay in lieu of notice.”  This suggests that, for the time being, the court is not about to add in a “good faith” obligation as a requirement for dismissing a non-federally regulated employee.

This decision reinforces the wide gap between employees in the Federal sector and employees in most other provincial jurisdictions.  An employee dismissed on a without cause basis in Ontario can file a wrongful dismissal complaint and sue for dismissal damages in the court system.  In some cases, the employee may also have a valid claim for other damages or remedies.  But reinstatement is not an option, nor is the court required to consider why the employee was dismissed, if the dismissal was on a “without cause” basis.

But in the federal sector, it is now clear that the vast majority of dismissed employees enjoy “union-like” protection.  They can file unjust dismissal complaints and seek reinstatement or significantly increased damages.  Non-managerial employees with more than one year of service who have been dismissed from Canadian banks, telephone and cable companies, radio stations and other industries have significant negotiating leverage and may demand reinstatement or negotiate significantly higher severance packages.

Damages under the Canada Labour Code can be exponentially higher since employees can be awarded reinstatement and compensated for the time that they were out work.  Overall, this is an extremely helpful decision for federally regulated employees.

At the same time, other rights are no less important.  Equality rights, whether based on gender, racial background, sexual orientation or other grounds are equally important for the very same reason. A free and democratic society must recognize the intrinsic value of each member to participate irrespective of any of these different personal characteristics.

Inevitably, these rights are bound to clash.  At that point our courts are called upon to balance competing rights and to devise judicial solutions that consider all of the different rights and freedoms at issue.  These are not easy cases.  Every decision in this area is likely to create controversy since the courts wind up siding with one side or the other in these disputes.  There are likely to be winners and losers but we must address these issues and make these difficult decisions.

Some recent court decisions at the highest level illustrate the difference in approaches in Canada and the United States.  The Supreme Courts in both of these countries have recently issued rulings involving the clash between religious freedom and same sex rights.  The cases were decided quite differently and are based on very different and specific facts.  Yet they are illustrative of two different approaches to analyzing these types of cases.

In the Masterpiece Cakeshop decision, decided in June 2018, the United States Supreme Court overturned a decision of the Colorado Court of Appeals and a lower decision of the Colorado Civil Rights Commission (“CCRC”).  By a 7-2 majority, the Supreme Court held that a religious Christian bakery owner and cake maker could not be forced to make a wedding cake for a same sex couple.  The Supreme Court highlighted certain unique facts in this case.  The refusal to make the case occurred before same sex marriage was legal in Colorado.  Certain members of the CCRC made disparaging comments about the baker’s religious beliefs in the course of the hearing.  The Court also accepted that the baker was prepared to provide other baked goods to the couple, just not a wedding cake.  The Court concluded that the baker could not be compelled to make a wedding cake for a same sex couple since that would likely violate his freedom of religion rights as well as his rights of freedom of expression.

Interestingly, in coming to its decision, the Court’s majority opinion, written by outgoing justice Kennedy, included certain statements that would likely be acceptable in the Supreme Court of other country:

“gay persons and gay couples cannot be treated as social outcasts or as inferior in dignity and worth.”

At the same time, “the religious and philosophical objections to gay marriage are protected views and in some instances protected forms of expression.”

Further, the Court also noted “such objections do not allow business owners and other actors in the economy and in society to deny protected persons equal access to goods and services under a neutral and generally applicable public accommodations law.”

Reading the combination of these statements, one might have thought that Justice Kennedy and one or two other judges would have come down on the side of the two dissenters, Justices Bader-Ginsburg and Sotomayor, who would have upheld the decision of the CCRC.  But the Supreme Court’s decision provides little evidence of any balancing.  The Court comes down, ultimately, on the side of the religious freedom of the bakery owner.  The end result is that the statements made by the Court pronouncing the importance of protecting same sex rights are effectively eviscerated by this decision.  In fact, the Supreme Court, after the Masterpiece decision, has already sent a flower arrangement case, with some similar facts, back to the lower courts to review.  Ultimately, the Masterpiece decision provides little consolation to those who would have looked to the courts to balance religious freedom with other fundamental rights.

The Canadian Supreme Court reach the opposite results in a recent set of twin decisions that it released in the Trinity Western cases involving law societies in B.C. and Ontario.  These are very different facts and a very different issue to be decided.  However, like in the case of the U.S. Supreme Court decision, the Canadian Supreme Court had to balance religious freedom rights against same sex equality rights.  The balancing approach favoured by the Canadian Supreme Court led it to side with same sex equality rights over freedom of religion.

The Canadian Supreme Court addressed the issue of whether Trinity Western law schools in B.C. and Ontario should be licensed by these respective law societies.  Trinity Western is a Christian university that requires its students to sign a mandatory covenant in which they agree to live by Christian principles with respect to sexual relationships.  The effect of this covenant is to render LGBTQ persons effectively unable to attend these universities.  In both cases, in B.C. and Ontario, the law societies refused to accredit Trinity Western because of this mandatory covenant.

In both cases, the Canadian Supreme Court looked at the balance between the different rights at issue.  The majority of the Court held that the members of Trinity Western were able to maintain freedom of religion claims by asserting that attending this type of school would support and assist their religious growth.  Notably, Trinity Western did not assert attending a school with this type of covenant was a required Christian practice or that the state was trying to take away their rights to practice their religion in any particular way.  Rather, they asserted that it would help foster their religious growth and development.

However, in both cases, the Court sided with the law societies and against the university when it balanced these two claims against the assertion of same sex equality rights.

It is worth noting that the Canadian Supreme Court has not been shy in upholding rights to exercise religious freedom.  The Court has, in the past, ruled in favour of Sabbath observers, observant Sikhs who seek to wear turbans and Kirpans, Seventh Day Adventists, and Orthodox Jews who have sought Court assistance to practice certain holiday rituals.  In short, the Court has endorsed a robust vision of freedom of religion in Canada which has fostered and engendered greater religious equality.  Unfortunately, not all of the Court’s decisions have been decided in this spirit.  The Court has refused to address equality concerns when addressing the issue of the funding of Catholic public schools (Catholic elementary and secondary schools are fully funded in Ontario while those of other religious minorities are not).  But for the most part, the Court has generally been sensitive to religious freedom rights.

At the same time, the Supreme Court has also underscored the importance of other rights and freedoms in Canadian society.  It is a fundamental value in Canadian society, as stated by the court, that laws should not be upheld which create the possibility of a “person being treated in substance as less worthy of others.”  The Court continues on to say that it cannot condone a right or practice that has the effect of “injuring [a person’s] neighbour or their parallel right to hold and manifest beliefs and opinions of their own.”

The Court concluded in Trinity Western cases that no evangelical Christian would be prevented from practising his or her religion as and where they choose.  Trinity Western could still run this type of school and it could even suggest or request that those who come to the school agree to follow the code of conduct.  It just could not impose this requirement on others.  Ultimately, the majority concludes that “minor limits on religious freedom are often an unavoidable reality of a decision maker’s pursuit of its statutory mandate in a multi-cultural and democratic society.”

Contrary to the response of some to this decision, the Supreme Court’s Trinity Western decisions are not an attack on religious freedom. Rather they are a balancing between religious freedom and other equally important rights which the Court has taken into account in balancing both sides of the equation.  The Canadian Charter requires this type of balancing and the Supreme Court hears from a wide range of stakeholders in making these decisions.  There were a very large number of intervenors in the Trinity Western case who made all sorts of submissions for and against Trinity Western.  Certainly the Court weighed many different considerations and arguments.

It is hard to predict with certainty the direction that the Canadian Supreme Court might take when confronted with an issue like that raised in the U.S. Masterpiece Cakeshop case.  However, it seems likely that the case would be decided in Canada with an opposite result and an equally robust majority.  Among other things, the Court would be likely to consider the bakery’s general provision of services to the public at large, the impact on same sex persons when denied services that are otherwise available to everyone else, the concern about what other types of services could be denied to which other people and the level of infringement of religious rights.  That is not to say that the Court would necessarily compel a bakery to print a certain message or come up with a certain design.  But if one is in the business of supplying cakes, it seems unlikely that Canadian law would permit a cake supplier to refuse to supply those cakes to certain classes of individuals in a way that violated Provincial human rights legislation.

If we are all to be treated equally in a free and democratic society, there ought to be few, if any occasions in which we can use religious freedom rights to trump the rights of others to enjoy that same equality.