Executive Summary: Key Legal and Evidentiary Issues

• The Federal Court of Appeal reviewed, on the reasonableness standard, the Canada Industrial Relations Board's dismissal of three unjust-dismissal complaints brought under the Canada Labour Code.
• At issue was whether the Board could reasonably uphold dismissals imposed without progressive discipline, given the applicants' senior managerial status.
• Underlying the terminations were inappropriate sexual and racist remarks made between August and November 2020 during weekly virtual meetings the new entity held at the applicants' instigation.
• Applicants contended the Board wrongly treated a breach of the employer's Code of Ethics as serious misconduct warranting dismissal.
• Another ground challenged the Board's decision to assess the three applicants collectively rather than individually.
• Costs followed the court's dismissal of the judicial review application.

Facts of the case

Andrei Uglar, Martin Dagneau, and Jonathan Cayer were hired by the Royal Bank of Canada in May 2019, when the bank acquired a company they had led and in which they were shareholders. Within the new entity, Uglar became senior director, Cayer director of technology, and Dagneau director of operations. Between August and November 2020, the new entity held weekly virtual employee meetings during working hours at the applicants' instigation, and inappropriate remarks of a sexual and racist nature were made during those meetings. After one participant complained, the bank ended the meetings and commissioned an external investigation, which ultimately led to the applicants' dismissal on February 1, 2021. Believing they had been unjustly dismissed, the three filed complaints under subsection 240(1) of the Canada Labour Code. Following a six-day hearing, the Canada Industrial Relations Board dismissed the complaints on April 1, 2025 (2025 CCRI LD 5615), finding that dismissal was a proportional response to the seriousness of their misconduct. The applicants then sought judicial review before the Federal Court of Appeal, asking it to set the Board's decision aside.

Provisions and standards at issue

The complaints were brought under subsection 240(1) of the Canada Labour Code, which permits an employee who considers a dismissal unjust to file a complaint. A related provision, subsection 167(3), excludes managers from the reach of section 240 — a category the Board's own jurisprudence interprets restrictively. Also central was the bank's internal Code of Ethics, on which the applicants had received training shortly after being hired and which the Board found they had breached. Running through the analysis was the principle of progressive discipline — the general expectation that lesser sanctions precede dismissal — which the Board acknowledged is not absolute and can yield where dismissal is proportional to serious misconduct, particularly for managerial employees.

The court's reasoning and analysis

The applicants accepted that the Board's decision was reviewable on the reasonableness standard set out in Vavilov. That standard, the court emphasized, is deferential — especially given the Board's expertise in the practical realities of labour relations — and its role was to confirm the decision was internally coherent and justified rather than to reweigh the evidence or substitute its own view. The applicants advanced three grounds. First, they argued the Board unreasonably set aside progressive discipline without adequately weighing their lack of disciplinary history, positive performance evaluations, their role at the meetings, and the regret they expressed. The court found no error, noting that the law permits dismissal without prior warning where proportional to serious misconduct, and that the Board had reasonably grounded its conclusion in the applicants' managerial status and their Code of Ethics training. Second, they contended the Board wrongly elevated a breach of the Code of Ethics into serious misconduct; read as a whole, the court held, the decision rested on more than the breach alone, being tied to the heightened obligations attaching to their senior roles. Third, they argued each applicant should have been analyzed individually rather than as a group. Reviewing the proceeding's history — including a June 7, 2023 ruling in which the same arbitrator rejected the bank's preliminary objection under subsection 167(3) and examined each applicant's position in detail — the court was satisfied the Board was aware of each man's status and had drawn distinctions where necessary.

Ruling and outcome

Concluding that the applicants were in substance asking it to reassess the evidence and reach its own conclusions, which it was not authorized to do, the Federal Court of Appeal dismissed the application for judicial review. The Royal Bank of Canada was the successful party, and the court awarded it costs, though the reasons do not specify a dollar amount.