Federal court clarifies that reinstatement is not the 'standard' remedy in all unjust dismissal case

As many of our readers are aware, adjudicators have an array of options under the Canada Labour Code (CLC) to remedy an unjust dismissal. Of these available remedies, adjudicators have often ordered the reinstatement of the dismissed employee.   However, the Federal Court’s recent decision in Kouridakis v. Canadian Imperial Bank of Commerce, 2019 FC 1226  illuminates that reinstatement is a possible, but not a required, solution to every unjust dismissal case.

Facts
The employee was employed by CIBC for 16 years. The employer had issues with the employee, including his conduct and how he was spending his time in the workplace. In 2015, the employee’s manager issued him a final disciplinary warning letter. In the final years of his employment, there was an acrimonious relationship between the employee and his manager. In April 2016, the employee disagreed with his manager’s suggestions during a team meeting. After the meeting, the employee met with his manager to discuss the issues he had with her suggestions. The discussion between the employee and manager became heated and the manager left in tears. As she walked away, the employee touched her arm to apologize, and the manger loudly responded “Don’t touch me.” The employee went on sick leave after this occurred. 

The employee subsequently made a bullying and harassment complaint against his manager, alleging that he was “reprimanded, yelled at, humiliated, made to feel inadequate, accused of tampering with corporate records and lying” (para 11). While he was on sick leave, CIBC scheduled a meeting with the employee. The employee was informed at this meeting that his employment was being terminated. Although he was not provided with a reason for his termination at the time, he was later informed that he was terminated for his behaviour towards his manager in April 2016 and his past episodes of unprofessional and inappropriate conduct in the workplace

Arbitral Award
Although the arbitrator ruled that the employee was unjustly dismissed, he declined to reinstate the employee. The arbitrator determined that the employee should be removed from the workplace environment and awarded the employee with severance compensation.

Federal Court’s Decision
The Federal Court dismissed the employee’s application for review and upheld the arbitrator’s decision. The Court found that the arbitrator’s decision not to reinstate the employee was reasonable given the evidence presented in the case. Although the manager was the only person who testified against reinstating the employee, the Court found that it was reasonable to give her opinion more weight since she would have to deal with the consequences of reinstating the employee on a day-to-day basis.

Notably, in addressing the remedy of reinstatement, the Court wrote:

45  The fact that reinstatement may have been determined to be the appropriate remedy more often than not does not mean that it becomes the norm or somehow becomes the standard to be deviated from only in exceptional circumstances. I do not accept that, as a matter of law, reinstatement is the default position which should be ordered unless the employer shows, on the balance of probabilities, that such reinstatement is inappropriate. Reinstatement is but one of a number of remedies which, like any other, is open to the arbitrator to order either on its own, in conjunction with other monetary compensation, or not at all, even where the dismissal is found to be unjust.

Employer Takeaways
Although this is a welcome decision, federally-regulated employers should still be aware that making a dismissal stick is an uphill battle. Federally regulated employers are only permitted to terminate employment when just cause can be established, and the availability of reinstatement with full backpay still poses a serious risk to federally-regulated employers in terminating employees.

If you are a federally regulated employer who requires assistance in navigating an employee claim of unjust dismissal the lawyers at CCPartners are well versed in navigating terminations for federal employees and can assist employers throughout the process.