Notices of Resignation and Payment of Indemnity

The Supreme Court of Canada is hearing a case today that could represent significant change for employers.

The Supreme Court of Canada is hearing a case today that could represent significant change for employers.

 

The Supreme Court of Canada is scheduled to hear the case of Asphaltes Desjardins c. Commission des norms du travail, 2013 QCCA 484 today, March 28, 2014. This case could representsignificant change for employers in terms of employee resignations and notice period payments.

THE FACTS

This Quebec matter involved a gentleman by the name of Mr. Guay who worked for Ashphalte Desjardins Inc. (“Ashphaltes”) between the years of 1994 and 2008.  Mr. Guay initially worked as a surveyor and then became project manager. His duties included supervising and managing tenders; he had access to information Ashphaltes considered confidential.

On Friday February 15, 2008, Mr. Guay provided his employer with a letter of resignation which stated that he intended that his last day of work would be March 7 of that year.  The three weeks’ notice was, according to Mr. Guay, to help transition his responsibilities to his successor.  Mr. Guay disclosed that he intended to work for one of the respondent’s competitors.

When Asphaltes was unable to convince Mr. Guay to stay, it decided to terminate his employment immediately without providing any pay in lieu of notice.  Proceedings were started against Asphaltes.

THE LEGAL ISSUE

The central question before the court was whether an employer can waive the employee’s notice of resignation without paying any indemnity.

Until this decision, the case law in Ontario and Quebec suggests that when an employer receives a resignation, if they induce the employee to leave before their proposed resignation date, the employee will be considered “dismissed,” and the employer would have to pay severance.

In the present case, two out of the three Quebec Court of Appeal judges concluded that since the termination was initiated by Mr. Guay, the employer did not have a duty to pay severance or any other form of compensation.  In other words, the employer could waive the notice period without paying any indemnity. 

IMPACT ON EMPLOYERS

If the Quebec Court of Appeal decision is confirmed, this will represent a significant change for employers.  It would mean that employers could accept their employee’s resignation and send them home immediately without having to pay the employee during the notice period. For employers in a competitive market and who do not want the soon to be competing employee having continued access to their confidential information during the notice period, this decision may be particularly welcome.

IMPACT ON EMPLOYEES

For employees, this decision could represent a difficult change.  There is a duty on employees to provide reasonable notice of resignation.   An employee who, in good faith, finds a new job and negotiates a later start date may find themselves without work and without income if the employer waives the notice.

UP FOR DISCUSSION

If employees began to feel they may be “penalized” for giving notice, will they cease giving advance notice of their departure?

We will follow up when the Supreme Court renders its decision.

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