Canadian Government Executive - Volume 25 - Issue 04

20 / Canadian Government Executive // October/November 2019 EMPLOYMENT the adjudicator’s decision to assume juris- diction over the employee’s complaint for unjust dismissal under the Code. It ruled that the employee could still seek relief for unjust dismissal despite the existence of a settlement and release. The Court dismissed the employer’s application, af- firming its decision in National Bank, and stating, “Decisions of arbitrators that have neglected or refused to follow National Bank cannot be considered good law.” In the course of its judgment, the Court rejected the employer’s argument that al- lowing employees to pursue unjust dis- missal complaints following a severance payment and release would create “per- verse incentives.” By this, the employer sug- gested that “federally-regulated employers [would] be motivated to provide only the minimum amount of severance mandated by the Code, at least for the 90 day period within which the employee may pursue a complaint of unjust dismissal.” The Court considered this argument to be grounded only in policy and not in law and dismissed it, stating that this did not provide a basis to depart from National Bank. Bottom Line for Employers As noted above, Bank of Montreal has been appealed to the Federal Court of Appeal where it will be heard on Decem- ber 2, 2019. We will follow these develop- ments as they unfold and report on the outcome. In the meantime, in the wake of the decision of the Federal Court of Canada in Bank of Montreal, federally regulated employers are advised not to disregard the possibility of claims for unjust dis- missal during the permissible 90-day period, even once their employees have signed releases and settlement agree- ments. A settlement agreement and re- lease will not prevent an employee from filing such a claim. The bank’s policy argument, which the Federal Court dismissed in Bank of Mon- treal, suggests a strategy that may allow federally regulated employers to avoid unjust dismissal claims. Employers may provide employees only the minimum amount of severance mandated by the Code for the 90-day limitation period following a dismissal, and offer to pro- vide additional compensation if no un- just dismissal complaint is made within the 90-day period. In this scenario, the employer may disclose to the employee what it proposes to offer in the severance package, but explain that it will not enter into the agreement until after the 90-day period has ended. Finally, employers should keep in mind that in accordance with National Bank and Bank of Montreal, should an adjudica- tor require an employer to compensate an employee for unjust dismissal pursuant to the Code, and the adjudicator would have awarded the employee an amount greater than the amount the employee already received under a settlement agreement, the adjudicator can order the employer to pay the employee the difference between the adjudicator’s award and the amount already received. However, in accordance with section 168, should the adjudicator conclude that the amount received by an employee under a settlement agreement was equal to or exceeded the amount the adjudicator would have awarded, the agreement would govern. Due to section 168 of the Code, it is possible for employees to utilize the unjust dismissal complaint process even when they have signed releases or accepted severance payments.