Notice of resignation

Requiring employee to give more notice of termination of contract

Colin Gibson

Question: Can an employment contract require an employee to provide more resignation notice than the termination notice the contract requires the employer to give? Is there any reference to notice of resignation in employment standards legislation anywhere?

Answer: Generally, just as an employer must provide an employer with reasonable notice of a dismissal without cause, an employee must give also reasonable notice of her intention to resign from employment, unless the employee has just cause for resigning (constructive dismissal) or the employment contract deals with the matter expressly. As the Ontario General Division court stated in Sure-Grip Fasteners Ltd. v. Allgrade Bolt & Chain Inc.:

“An employee is obligated by law to give reasonable notice of termination to his or her employer, even absent a written contract of employment. If the resignation is voluntary, the notice to which the employer is entitled becomes a matter of law, not merely a matter of conscience or responsibility on the part of the employee.”

Where a contract does not address the issue of the length of notice required by an employee, the common law will govern. Under the common law, notice is determined by a number of factors, including the employee’s responsibilities, length of service, salary, and the time it would reasonably take the employer to replace the employee or otherwise take steps to adapt to its loss.

The notice period required from an employee who resigns will usually be less than the notice period the employer would be required to provide if it dismissed the employee without cause. This is because an employer is typically able to deal with the resignation though training or hiring a replacement, while an employee who has been dismissed will need to search for another job in a potentially difficult market.

Employers often seek to displace the common law reasonable notice requirement by entering into written employment contracts with their employees that specify the amount of notice or severance compensation the employee is entitled to if she is dismissed without cause. Courts will typically enforce provisions of this nature, provided they meet or exceed the employee’s termination entitlement under the relevant employment standards legislation, and provided there is no other sound legal reason why the contract should not be enforced (such as lack of consideration or unconscionability).

Similarly, employment contracts often contain language requiring the employee to provide a designated amount of notice of resignation. Again, such provisions will typically be enforced by a court, although “wrongful resignation” lawsuits are rare because it is often difficult for an employer to prove it has suffered damages as a result of the employee’s failure to give proper notice of resignation as opposed to the resignation itself.

Conceptually, there is nothing in law that would prevent an employer and an employee from entering into an employment agreement that requires the employee to give a longer period of resignation notice than the termination notice the employer is required to provide. Indeed, such a requirement may be justifiable and even necessary in situations where an employee has unique skills and is in exceptionally high demand. Also, it is not uncommon for an employment agreement to require the employee to provide two weeks’ notice of resignation, and the employer to give the amount of termination notice that is required by the relevant employment standards statute, which in many jurisdictions would be up to one week in the employee’s first year of employment.

Having said that, employers should think carefully before drafting employment agreements that require employees to give significantly more resignation notice than the termination notice the employer needs to provide. Lopsided provisions of this nature may adversely affect recruitment and morale, and may increase the risk of a court refusing to enforce the contractual termination provisions in a dismissal.

In answer to the second question, the following Canadian jurisdictions have provisions in their employment standards statutes that require an employee to give a specified amount of resignation notice: Alberta, Nova Scotia, P.E.I., Manitoba, Newfoundland, and the Yukon. Ontario does not have a general employee notice requirement, but it does require employees that have received employer-issued termination notice to provide their own notice if they wish to resign before the end of the termination notice period.

For example, Alberta and Nova Scotia require at least one week’s notice if the employee has worked for more than three months but less than two years, and two weeks’ notice for persons employed for two years or more. Manitoba requires an employee provide notice one week before the termination if the employee's period of employment is less than one year, or two weeks before the termination if the employee's period of employment is one year or more. Prince Edward Island requires one week’s notice for employment of over six months but less than five years, and two weeks’ notice for employment extending beyond that. The Yukon requires a range of notice up to four weeks in length depending on the length of service. Finally, Newfoundland requires the same notice from employees as from employers, ranging from one week for employment of at least three months but less than two years, up to six weeks for employment of 15 years or more.

Only the Yukon and Newfoundland statutes establish enforcement procedures to remedy a breach of the statutory notice obligation. In 2006, Manitoba removed the enforcement provision from its legislation. Newfoundland’s Labour Standards Act permits the employer to deduct, with the employee’s consent, the amount owed over the breached notice period from unpaid wages owed to the employee. Where employee consent is not given, the director can order payment of the amount owed. The Yukon provision is similar.

For more information see:

Sure-Grip Fasteners Ltd. v. Allgrade Bolt & Chain Inc., 1993 CarswellOnt 931 (Ont. Gen. Div.).

Colin G.M. Gibson is a partner with Harris and Company in Vancouver. He can be reached at (604) 891-2212 or cgibson@harrisco.com.

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