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A recent Supreme Court of Canada decision on a labour regulation quietly flew under most people’s radar. The 6-3 decision confirmed that under Canada’s Labour Code, employers operating in federally regulated industries (airlines, broadcasting, banking, etc.) cannot dismiss non-union employees without first establishing a clear case for dismissal, even if employers offer a generous severance package.

On first blush, the decision appears to “protect” employees from arbitrary dismissals. In reality, however, it solidifies a regulation that ultimately hinders employment opportunities and overall prosperity, hurting workers in the process.

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In general, when labour regulations are overly restrictive, they impede the ability of employers and workers to adjust to changing economic conditions such as a weakening economy or the introduction of new technologies that improve how products are made or how services are delivered. Yet the mark of a dynamic economy is one where employers and workers can quickly and easily respond to market changes.