Legal saga on the notice of resignation: Understanding your obligations

Many of us have seen employees leave their jobs to go work for the competition. But what if the employer wants the departure to take place immediately, so as to keep confidential information from being shared?

To provide a better understanding of the legal obligations of both parties, today we are discussing a six-year-long legal saga that concluded with a ruling by the Supreme Court of Canada.

February 2008

This marks the beginning of a dispute that would set a legal precedent. An employee of Asphalt Desjardins inc. submitted a resignation letter to inform his employer that he would be leaving in three weeks to work for a competitor. He planned on wrapping up his ongoing files to ease the transition for his successor. Following a failed attempt to get him to stay, the employer terminated his employment contract a few days later, before the notice period had run out.

On behalf of the employee, the Commission des normes du travail claimed compensation equivalent to the three weeks’ notice, in accordance with the Act Respecting Labour Standards, under which the employer must give the employee written notice before terminating a contract of employment, or pay equivalent compensation.

The Civil Code of Québec also provides that each party may terminate an open-ended contract of employment by giving reasonable notice to the other party.

July 2010

The Court of Quebec confirmed that an employer must give notice or pay compensation when terminating a contract before the effective date of the employee’s resignation. By offering his employer a reasonable amount of time, the employee met his obligation under the Civil Code of Québec and the employer could not renounce that obligation without compensating him.

March 2013

The employer appealed, and the Court of Appeal overturned the Court of Quebec’s decision and determined that an employer can renounce the notice given by a resigning employee. This happened because all the judges (except one) considered that by renouncing the notice period, the employer was not terminating employment, but rather, rejecting a benefit that is exclusive to it. That means that the company would have no obligation to give notice of termination or pay compensation; it can either take advantage of the notice provided by the employee or renounce it.

July 2014

On July 25, 2014, the Supreme Court of Canada reversed the decision of the Court of Appeal. It determined that an employer that ends the contract of an employee prematurely when given a notice of resignation is not “renouncing” the notice, but actually “terminating” the contract of employment, since it is refusing to let him work and be paid.  The Court stated that the notice period does not benefit only the person receiving it, since it can be advantageous for both parties.

To conclude, in order to comply with its obligations under the Civil Code of Québec and the Act Respecting Labour Standards, an employer who receives a notice of resignation in reasonable time from an employee may not terminate the employment contract before the effective date of his resignation, unless it gives him notice of termination or compensation.