Jul 29

Resignation of Employment: Toronto Employment Lawyer

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Don’t Quit . . . without telling somebody first

Ending any type of relationship is generally difficult, but as our employment is often central to our identity ending an employer-employee relationship can cause greater challenges.  In this post, we explore the concepts of the termination of an employment relationship when it is the employee who initiates the breakup. There are several scenarios in which this may occur, including when an employee:

        quits their job;

        retires;

        walks off the job without giving any prior notice to the employer; or,

        submits a formal resignation.

Employees who quit their jobs are typically owed nothing in return for their time and potentially years of service. This holds true even when employees who retire, who often receive nothing more than a handshake as thanks for their hard work.

In some situations, an employee may be required to provide their employer with notice of their departure. If the employee fails to do so, the employee may be liable to the employer and may have to pay damages as a result. Employees generally owe a common law duty to give notice to their employers and that employees should be careful when breaking up an employment relationship – they may have to pay for it if they are not.

 

Common Law Duty to Provide Reasonable Notice and Other Duties Owed at Resignation

                  Although it should be understood that an employee is not chained to his or her position; no employee is forced to stay at his or her job. However, absent a contractual term in the employment agreement, under the common law, an employee must provide “reasonable notice” of his or her departure. 

                  Certainly, there is a commonly held idea that an employee providing two weeks’ notice is  “reasonable notice,” but this is not the law. Amongst other factors, what is ‘reasonable’ in “reasonable notice” varies depending on the position of the employee, the complexity of the position, the number of years the employee has worked, and the duties required of the employee (Carlsen v. Physique Health Club Ltd. (Physique Fitness Store) 1996 ABCA 358 and Sure-Grip Fasteners Ltd. v. Allgrade Bolt & Chain Inc., 46 CPR (3d) 443, CarswellOnt 931)

                  In short, one of the key questions is: how much time will it take to replace said employee?

The courts have provided some guidance to answer that question. In GasTops Ltd. v Forsyath (2012 ONCA 134), four highly trained, specialized employees quit their employment simultaneously to work for competitor. They each provided two weeks’ notice of their departure. This was found, both at trial and on appeal, to constitute highly insufficient notice.

Following their departure, the four employees also solicited other existing employees to leave the business and business of their former employer. The four employees were ordered to pay over $12 million in damages to GasTops Ltd. for breach of their fiduciary duty, breach of their duty of confidentiality, and breach of their contracts including by resigning without reasonable notice. Due to the specialized nature of their jobs, reasonable notice was assessed to be 10 to 12 months.

This is much higher notice and far higher damages than would be assessed in the average case. A large part of the damages were in this case were based on the breach of fiduciary and confidentiality duties and not simply the proper lack of notice.

 

Costs for Lack of Notice versus Regular Replacement Costs

It is important to note that the damages incurred by an employer are not the usual costs associated with replacing an employee, but specific costs incurred because of the lack of reasonable notice of the resignation.

This was a problem for the employer in the case of Consbec Inc. v. Walker, 2016 BCCA 114. In this case, the employee was a manager and was the only employee in the company’s Western office. He resigned in writing and left immediately to go to a competitor.

As a result, the employer simply relocated one of its employees for an interim period. Ultimately, the interim relocation of that employee became permanent. The company had paid for the relocation and had paid for the training and claimed it spent over $56,000 as a result of this wrongful resignation.

The trial judge awarded the Plaintiff Consbec damages in this amount. However,  on appeal, Walker sucessfuly argued that Consbec  had failed to prove it suffered any damages arising from his failure to give notice. All of the damages were those that would have been incurred anyway in the replacement of an employee.

The Appellate court agreed finding that “to award Consbec damages, the judge was required to first determine the notice [the employee] should have given Consbec and then determine what damages, if any, Consbec had proven it suffered due to [the employee]’s failure to give that notice.”

None of the damages claimed were as a result of the failure to give notice as all of the same costs would have been incurred had the employee provided proper notice.  

Conclusion

                  Terminating an employment relationship as an employee is not always as simple as it may appear to be. Many considerations must be taken into account.

Employees have been found to have a duty under common law to provide reasonable notice. This notice may range from 2 weeks to 12 months depending on the nature of one’s position and title. It is important that you talk to an employment lawyer if you are considering leaving your job either without notice or if you want to know how much notice you should provide before doing so. This is particularly important if you are in a senior position or have restrictive covenants in your employment contract, such as non-competition or non-solicitation agreement.

Employers may have a remedy if they feel they have been “left in the lurch” by an employee. However, to be awarded damages, it is necessary to demonstrate that damages have been incurred are based on the lack of notice, not just the resignation.  The calculation of this amount is often complicated by a variety of factors. It is in your best interest to discuss this with an experienced employment lawyer.

The lawyers at Monkhouse Law are available to assist you with any questions you may have on your options when it comes to the termination of employment or any other employment law questions you may have. 

To arrange your free confidential 30 minute phone consultation make sure to contact us today.