Continuation of benefits when employee gets hurt with dismissal pending
Question: If an employee gives notice of resignation and then suffers an injury before the resignation date, does the employer have to continue benefits?
Answer: “Giving (two weeks’) notice” is common terminology used when an employee wishes to give notice of her
intention to resign. Naturally this means the employee is providing the employer with a period of advance notice for her impending resignation. Upon receiving notice, an employer has two options: allow the employee to continue working until the expiration of the notice period — “working notice” — or effectively end the employment relationship immediately by providing pay in lieu of the notice period.
In cases of working notice” an employee’s resignation does not become effective until the expiration of the notice period. An employee remains employed and maintains full entitlement to the terms of her employment during the notice period. Any change of those terms, including failure to continue benefits, may be considered a breach of the terms of employment and expose the employer to liability from such a breach. A broad examination of the obligations during notice periods can be found in the Supreme Court of Canada’s decision in Quebec (Commission des norms du travail) v. Asphalte Desjardins inc., a case where an employee provided his employer with three weeks’ notice only to have his employer dismiss him a few days into the notice period. It was observed that both parties must continue to perform their obligations under contract until the notice period expires:
“It is well established that a contract is not automatically resiliated upon receipt of a notice of termination and that, on the contrary, the contractual relationship continues to exist until the date specified in the notice given by the employee to the employer,” said the Supreme Court.
While the case addressed Quebec law, it is consistent with decisions on the issue in other Canadian jurisdictions (see the Ontario case Oxman v Dustbane Enterprises Ltd.).
Further, there is legal authority saying employers are obligated to continue benefits for employees injured prior to a pre-determined end date to their employment (see Egan v. Alcatel Canada Inc., Stelco Inc., Re, and Foothills School Division No. 38 v. A.T.A.). It is important to note that, with typical disability policies, an employee’s entitlement to benefits crystallizes on the date of her injury, so an employee injured during a “working notice” period will likely be entitled to those benefits.
For more information see:
• Quebec (Commission des norms du travail) v Asphalte Desjardins inc., 2014 CarswellQue 7142 (S.C.C.).
• Oxman v Dustbane Enterprises Ltd., 1988 CarswellOnt 903 (Ont. C.A.).
• Egan v. Alcatel Canada Inc. 2006 CarswellOnt 28 (Ont. C.A.).
• Stelco Inc., Re, 2005 CarswellOnt 5177 (Ont. S.C.J. [Commercial List]).
• Foothills School Division No. 38 v. A.T.A., 2005 CarswellAlta 2065 (Alta. Arb.).
