Under the Canada Labour Code, R.S.C. 1985 c. L-2, a federally regulated employee may challenge their dismissal by filing an unjust dismissal complaint.
One defence to an unjust dismissal complaint is the discontinuance of a function. This is a preliminary objection made to an adjudicator by the employer to oust the adjudicator’s jurisdiction to consider the unjust dismissal complaint.
What is a Discontinuance of a Function?
In Flieger v. New Brunswick,  2 S.C.R. 651, the Supreme Court of Canada stated that a discontinuance of a function occurs “when that set of activities which form an office is no longer carried out as a result of a decision of an employer acting in good faith.”
If the activities or duties are divided among other workers or if the activities are decentralized within the organization, it can still be a discontinuance of a function (Mudarth v. Canada (Ministry of Public Works),  3 F.C. 371, Coulombe v. The Queen, F.C.T.D., No. T-390-84). However, if the activities or duties comprising the office is reconstructed so as to suit another job description, there cannot be a discontinuance of a function (Flieger v. New Brunswick).
Mixed motive terminations or terminations partly made because of a discontinuance of a function and partly made due to disciplinary reasons, have not been found to be a discontinuance of a function by courts (Roe v. Rogers Cablesystems Ltd.,  F.C.J. No. 1457).
What is the Test for Discontinuance of a Function?
To establish a discontinuance of a function, the employer must demonstrate:
i. the “actual operative and dominate reason” for the employee’s termination was discontinuance of a function (Sedpex Inc. v. Canada,  2 F.C. 289);
ii. “economic justification”; and
iii. “establish reasonable explanation for the choice of the employee to be laid off” (Thomas v. Enoch Cree Nation Band,  F.C.J. No. 153).
What are the Implications of a Discontinuance of a Function?
If an employer successfully demonstrates the elements above, the adjudicator cannot consider the employee’s unjust dismissal complaint.
However, this does not prevent the employee from bringing a common law action against the employer.
If you are a federally regulated employee dismissed due to a “discontinuance of a function”, it is important to seek legal advice to learn about your legal options and determine the best course of action.