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Legal Costs Remedy Available under Canada Labour Code
February 21, 2012

An adjudicator recently confirmed that legal costs may be awarded to a complainant as a remedy for unjust dismissal under the Canada Labour Code.

The employer argued that an adjudicator is without jurisdiction to award costs based on a recent Supreme Court of Canada decision which held that a human rights tribunal had no authority to award legal costs. The complainant disagreed, arguing that the SCC case had no impact on prior decisions under the Code which permitted cost awards.

After reviewing the broad wording of section 242(4)(c) of the Code and prior authorities which interpreted its meaning, the adjudicator concluded that costs may be awarded as a remedy for unjust dismissal and that the Court’s decision did not change this conclusion. The adjudicator held that the SCC’s comments on the wording, history and purpose of the Human Rights Act could not be applied “willy-nilly” to an interpretation of the Code. Of particular relevance was the fact that, unlike the Code, the Human Rights Act does not broadly authorize an adjudicator to do “any other like thing that is equitable…to remedy…any consequence of the dismissal.”

Employers in the federal sphere should bear in mind this potential additional expense when conducting terminations of their non-management employees, since legal fees could be a significant portion of a monetary remedy in a successful unjust dismissal complaint under the Code.

Munsee-Delaware Nation v. Crystal Flewelling, 2012 CanLII 5895