Should employers be entitled to reasonable notice of resignation?
By Jeffrey R. Smith
“I quit. Consider this my two weeks’ notice.”
This is a line employers can expect to hear when employees decide they want to move on and don’t want to work for the employer anymore. However, it shows a common belief that when an employee resigns from her position, she just needs to give two weeks’ notice before she wants to leave.
However, the reality is that this can really depend on the position from which the employee is resigning. Just as employees are entitled to reasonable notice of termination, employers can sometimes be entitled to reasonable notice of resignation.
Often, two weeks’ notice is fine because the employer can make arrangements to at least start looking for a replacement. But if the job is more important and could leave the employer in a bind, two weeks might not be enough. However, given that courts and arbitrators often compensate for the power imbalance in the employment relationship, it’s often unlikely an employer could successfully sue for reasonable notice of resignation. However, if the lack of notice — and any other actions by the resigning employee — causes damage to the employer, it’s possible the employee could be on the hook for damages.
An Ontario company that produced assessment systems for industrial machinery had four employees resign their positions when the company was close to landing major business opportunities with major clients. All four provided two weeks’ notice, and the employer told two of them to leave immediately. Those two quickly set up their own business and recruited 12 more co-workers away from the company and competed for the business of major clients.
A trial court and later the Ontario Court of Appeal both found the four employees who quit owed a longer period of notice of resignation. A reasonable period was found to be 10 months, due to the timing and importance of their duties. In addition, the courts found the employees had fiduciary duties of loyalty and good faith to not directly compete with the company so soon.
“Generally, reasonable notice is meant to give the employer time to hire and train a replacement,” said the trial court. “In determining the time required to hire and train a new employee, one must look at the nature of the employee’s position and the area of work that the employer was competing in.”
Should reasonable notice of resignation be enforced more frequently, particularly for employees in important positions? If reasonable notice of termination is meant to give an employee time to find new employment, should the employer be entitled to time to hire and train a replacement for a resigning employee?
Jeffrey R. Smith is the editor of Canadian Employment Law Today, a publication that looks at workplace law from a business perspective. He can be reached at [email protected]. For more information, visit www.employmentlawtoday.com.
