Canada: Canada Labour Code Adjudicator Awards Costs In Unjust Dismissal Case

In P.D. and The Bank of Nova Scotia, Re, 2020 CarswellNat 640, Adjudicator Kaufman considered the issue of whether the Canada Labour Code (the "Code") authorized adjudicators to award costs in unjust dismissal cases.

The complainant P.D. worked as a customer service representative at the Bank of Nova Scotia (the "employer"). She was dismissed due to allegations that she misappropriated $1,000.00 of the Bank's funds and attempted to cover up the theft while serving customer Mr. X.

Counsel for the employer argued that there were no grounds under the Code for a costs award in an unjust dismissal claim, citing Canadian Human Rights Commission and Mowat v. Canada (Attorney General), 2011 S.C.C. 53 (CanLII) ("Mowat"). Employer's counsel argued since "costs" is a legal term of art, if Parliament intended to confer the authority to award costs then it would have been explicitly stated in the legislation.

However, Adjudicator Kaufman found that Mowat was decided specifically in the context of the Canadian Human Rights Act and the absence of a specific authority to award costs should not be generalized to other administrative bodies.

Adjudicator Kaufman reviewed the post-Mowat decision of Wilson v. Atomic Energy of Canada Ltd., 2016 SCC 29 (CanLII) and found that the Justices of the Supreme Court confirmed that as part of the remedial scheme set out in section 242(4) of the Code, adjudicators have the authority to award costs. The applicable provision being:

"Unjust dismissal

(4) If the Board decides under subsection (3) that a person has been unjustly dismissed, the Board may, by order, require the employer who dismissed the person to

(a) pay the person compensation not exceeding the amount of money that is equivalent to the remuneration that would, but for the dismissal, have been paid by the employer to the person;

(b) reinstate the person in his employ; and

(c) do any other like thing that it is equitable to require the employer to do in order to remedy or counteract any consequence of the dismissal."

Adjudicator Kaufman concluded that the wording "do any like thing that is equitable." conferred a broad discretion for adjudicators to award costs as is appropriate. As such she applied the factors set out in Rule 400 of the Federal Court Rules, to determine a costs award.

The appropriate scale of costs was also canvassed, based on the following factors: adjudication is a fact-finding process, the onus is on the employer to establish just cause for dismissal on a balance of probabilities if just cause is not proven the employer is at risk of compensating the complainant for their legal costs, and the purpose of costs is not to punish the employer but to "make whole" the complainant that spent resources to test their unjust dismissal.

Adjudicator Kaufman concluded that partial indemnity costs would be insufficient since P.D. had "done little to contribute to the costs she incurred, other than to have been misjudged by the employer." As a result she awarded substantial indemnity costs in the amount of $90,466.40.

Key Takeaway: Employees under the Code may have an increased chance of being awarded substantial indemnity costs in the adjudication of their matter as compared to commencing a wrongful dismissal claim at the Superior Court where costs awards are typically made at the partial indemnity rate.

If you have more questions about your wrongful dismissal, contact employment lawyer Marty Rabinovitch at 416-446-5826 or at marty.rabinovitch@devrylaw.ca

"This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs."