Should Federally Regulated Employees Claim Common Law Notice or Canada Labour Code Unjust Dismissal?

When a non-unionized employee is terminated, the first question is usually: “How much severance am I owed?”

For many Ontario employees, that question leads to a common law wrongful dismissal analysis: length of service, age, position, compensation, and the availability of comparable work.

But for employees in federally regulated workplaces, the better first question may be different:

Should I claim common law notice, or should I file an unjust dismissal complaint under the Canada Labour Code?

That choice can significantly affect the value, forum, timing, and strategy of the case.

At Vanguard Law, our Ontario employment lawyers help employees assess which legal route best protects their rights after a termination.

What Is a Federally Regulated Employee?

Most Ontario employees are governed by provincial employment laws. But some workplaces fall under federal jurisdiction.

Common examples include:

• banks;

• airlines and airports;

• telecommunications;

• interprovincial trucking and transportation;

• railways;

• ports and shipping;

• certain First Nations employers;

• federal Crown corporations;

• federally regulated contractors in specific industries.

If your employer is federally regulated, your termination rights may include protections under the Canada Labour Code, not just Ontario employment law.

That matters because the Canada Labour Code has a special unjust dismissal regime for many non-unionized federal employees.

The Common Law Route: “How Much Notice Was Owed?”

A common law wrongful dismissal claim usually starts from this premise:

The employer was allowed to end the employment relationship, but it had to provide reasonable notice or pay in lieu of notice.

In other words, the court is not usually asking whether the employee should have been fired at all. It is asking whether the employer gave enough notice.

Common law notice damages can include:

• salary during the reasonable notice period;

• benefits continuation or benefits replacement value;

• bonus, commission, or incentive compensation, where legally owed;

• pension or RRSP contributions;

• other compensation the employee would have earned during the notice period.

This is why common law claims often become a debate about the length of the notice period.

Was the employee owed 4 months?
8 months?
18 months?
24 months?

That analysis can be valuable. But it has a built-in limitation: the remedy is generally tied to the reasonable notice period, not to the idea that the dismissal should be reversed.

The Canada Labour Code Route: “Was the Dismissal Unjust?”

The Canada Labour Code unjust dismissal route asks a different question.

It is not simply:

“How much notice should the employee have received?”

It is:

“Was the dismissal unjust?”

Under section 240 of the Canada Labour Code, an eligible employee may file an unjust dismissal complaint if they have completed at least 12 months of continuous employment and are not covered by a collective agreement. The Canada Industrial Relations Board also explains that employees generally must file within 90 calendar days, must not be managers, and must not be unionized.

This is a different remedial framework.

If the dismissal is found to be unjust, the decision-maker may order remedies such as compensation for lost remuneration, reinstatement, and other equitable relief. The Canada Labour Code specifically allows orders requiring the employer to pay compensation, reinstate the employee, and do other equitable things to remedy or counteract the consequences of dismissal.

That is why the CLC route may be worth more than a common law notice claim in the right case.

Why CLC Unjust Dismissal Can Be More Valuable

The key difference is this:

Common law notice usually compensates the employee for the notice period.
CLC unjust dismissal may compensate the employee for the consequences of an unjust dismissal.

That difference can be enormous.

For example, a common law case may be worth six months of pay. But if a CLC unjust dismissal case takes 18 months to resolve, and the employee is seeking reinstatement with backpay, the potential wage-loss exposure may run far beyond a six-month notice period.

That does not mean every CLC case is automatically worth more. It means the legal theory is different.

Common law asks:

“What reasonable notice period should have been provided?”

CLC unjust dismissal may ask:

“What would have happened if the employee had not been unjustly dismissed?”

That is why reinstatement, backpay, and compensation in lieu of reinstatement can become central issues.

The Supreme Court of Canada’s decision in Wilson v. Atomic Energy of Canada Ltd. confirmed the importance of the unjust dismissal protections for non-unionized federally regulated employees. In practical terms, an employer cannot assume that paying notice or severance will necessarily defeat a CLC unjust dismissal complaint.

But CLC Is Not Always Available

The CLC route can be powerful, but it is technical.

An employee may face eligibility or jurisdictional issues, including:

• whether the employer is truly federally regulated;

• whether the employee had at least 12 months of continuous service;

• whether the employee was a manager;

• whether the employee was unionized;

• whether the complaint was filed within the required deadline;

• whether the termination was actually due to lack of work or discontinuance of a function;

• whether another statutory redress procedure applies.

The CIRB warns that unjust dismissal complaints generally must be filed within 90 calendar days of dismissal, and that managers cannot claim unjust dismissal under the Canada Labour Code.

This is one reason employees should get legal advice quickly. Missing the wrong deadline can change the entire strategy.

Can an Employee Claim Both Common Law Notice and CLC Unjust Dismissal?

Sometimes, an employee may preserve both theories, but they generally cannot recover twice for the same wage loss.

This is the conceptual point many employees miss.

A common law claim says:

“The dismissal was allowed, but the employer failed to provide reasonable notice.”

A CLC unjust dismissal claim says:

“The dismissal itself was unjust and should be remedied.”

Those theories can sometimes be advanced in the alternative. But they should not be treated as stackable claims for the same post-termination income loss.

For example, an employee generally should not expect to recover:

• 12 months of CLC backpay; and

• 8 months of common law notice damages;

for the same 8-month post-termination period.

That would usually be double recovery.

A better strategic framing may be:

“My primary remedy is CLC unjust dismissal relief, including reinstatement, backpay, benefits, and other equitable compensation. In the alternative, if that route is unavailable or unsuccessful, I seek common law wrongful dismissal damages.”

The right approach depends on the facts.

When Common Law Notice May Be the Better Route

Common law may be preferable where:

• the employee is likely excluded from CLC unjust dismissal because they were a manager;

• the employer has a strong lack-of-work or discontinuance-of-function argument;

• the CLC deadline has passed;

• the employee does not want reinstatement;

• the employee wants to sue for broader civil claims in court;

• the case involves complex bonus, equity, contract, or benefits issues better suited to litigation;

• the expected common law notice period is strong and the CLC merits are uncertain.

A senior employee with long service and a strong common law notice claim may decide that court litigation or negotiation based on common law damages is the cleaner route.

When CLC Unjust Dismissal May Be the Better Route

CLC unjust dismissal may be preferable where:

• the employee is non-unionized and non-managerial;

• the employee has at least 12 months of service;

• the termination appears unfair, retaliatory, discriminatory, or pretextual;

• the employee wants reinstatement;

• the employee believes the employer’s reason for dismissal is false;

• the common law notice value is modest;

• the employee wants backpay that may run beyond a short notice period;

• the employer dismissed without cause and simply offered a severance package.

In these cases, focusing only on common law notice may undervalue the case.

What About Human Rights Issues?

Some federal termination cases also involve disability, race, sex, age, family status, religion, or another protected ground.

If the dismissal involves discrimination, the employee may also need to consider the federal human rights process. The CIRB itself notes that where an unjust dismissal complaint involves human rights issues, such as disability discrimination, it is important to also file a complaint with the Canadian Human Rights Commission because the Board may not be able to deal with those issues without a referral.

The Canadian Human Rights Act can provide remedies such as lost wages, expenses, pain and suffering, and additional compensation for wilful or reckless discrimination. The Canadian Human Rights Tribunal explains that compensation for pain and suffering can be up to $20,000, with up to another $20,000 for wilful or reckless discrimination.

This is another reason the forum choice matters.

A federal employee may have more than one legal path, but those paths must be coordinated carefully.

The Practical Takeaway

For federally regulated employees, the question is not simply:

“How much severance am I owed?”

The better question is:

“Which legal route gives me the right remedy?”

Common law notice may compensate the lost notice period.

Canada Labour Code unjust dismissal may seek reinstatement, backpay, and broader equitable relief for an unjust dismissal.

Human rights remedies may address discrimination-related harm.

Each route has its own deadlines, tests, risks, and remedies. The best strategy depends on the employee’s role, service length, employer’s jurisdiction, reason for termination, contract language, mitigation prospects, and goals.

Speak With an Ontario Employment Lawyer

If you work for a federally regulated employer and have been terminated, do not assume your case is only about severance.

You may need advice on:

• whether your employer is federally regulated;

• whether you qualify for Canada Labour Code unjust dismissal;

• whether common law notice is the better route;

• whether a human rights complaint should also be filed;

• whether reinstatement, backpay, or compensation in lieu of reinstatement is realistic;

• whether a severance offer should be accepted, negotiated, or rejected.

Vanguard Law helps Ontario employees assess termination packages, wrongful dismissal claims, Canada Labour Code issues, human rights concerns, and strategic forum choices.

Before signing a release or missing a deadline, speak with an employment lawyer.

FAQ Questions

Q: Can federally regulated employees sue for wrongful dismissal?
Yes. Federally regulated employees may have common law wrongful dismissal rights, but eligible non-unionized employees may also have access to the Canada Labour Code unjust dismissal process.

Q: Is Canada Labour Code unjust dismissal better than common law notice?
It depends. CLC unjust dismissal can offer remedies such as reinstatement and backpay, which may exceed common law notice damages. But it is not available to every employee.

Q: What is the deadline to file a CLC unjust dismissal complaint?
The general deadline is 90 calendar days from dismissal, subject to limited extension possibilities.

Q: Can I get both common law notice and CLC backpay?
Usually not for the same period of wage loss. The claims may be preserved in the alternative, but double recovery is generally not available.

Q: Can managers claim CLC unjust dismissal?
Generally, managers cannot claim unjust dismissal under the Canada Labour Code. Whether someone is a manager depends on their actual duties, not just their title.