May 25, 2008

Can an employer waive notice and end the employment immediately without severance if an employee gives less than two weeks’ notice of resignation?

Question: If an employee gives less than two weeks’ notice she’s quitting, can the employer waive the notice and end the employment immediately without severance?  What is required generally when an employee quits?

Answer: An employee has a duty to provide her employer with reasonable notice of resignation.  

To determine the length of notice required, one must first look to any express or implied terms in the contract of employment.  In the absence of any such provisions, courts will determine what a reasonable-notice period would be. It should be noted that this period will not usually be equivalent to the reasonable-notice period an employer is required to provide an employee upon dismissal without cause. The objectives of the two types of notice are different and therefore will, more often than not, result in different amounts.

Reasonable notice of resignation is provided to an employer in order for it to make sufficient provisions for the continuation of the business in light of the employee’s departure. In other words, the period of notice will generally reflect whatever would be a reasonable amount of time for the employer to find someone to replace the former employee.  Reasonable notice of termination provided to an employee is designed to allow the employee a reasonable period of time to find suitable alternate employment.  Usually, it will take an employee longer to land on his or her feet then it will take an employer to find a replacement.  Accordingly the reasonable notice period for a resignation will tend to be much less than an employer needs to provide for a dismissal. Having said that, a lack of skilled employees able to fulfill the particular position in question would result in an increase to the notice period that an employee is obliged to provide to an employer.

For low level employees it is customary to provide two (2) weeks advanced notice of resignation.  For more senior employees, it is customary to provide advanced notice of resignation of not less than one (1) month and usually not more then three (3) months.  Once again, the guiding principle is that it should be a sufficient period of time to allow the employer to find a suitable replacement so no strict rules govern this situation.

Where an employee provides less than two (2) weeks notice of resignation it is likely that the employee is in breach of an implied term of the employment contract that the employee provide advanced reasonable notice of resignation.   However, it is unlikely that such a breach allows the employer to treat the contract immediately as at an end without notice.  If an employer were to do so, it is likely that the employer would be deemed to have terminated the employee without just cause during the notice of resignation period and would have to pay the employee out the balance of the resignation period.  By contrast, where the employer allows the employee to work out her entire notice of resignation period nothing further is owed by the employer to the employee.

Where an employee does not provide an employer with proper advanced notice of resignation the remedy of the employer is likely restricted to damages.  The employer would need to point to some out of pocket expenses or other losses that it has incurred as a result of the employee’s failure to provide proper advanced reasonable notice of resignation.  This could be the costs associated with having to use the services of a recruitment firm on a rush basis or the additional costs of having a temporary employee fill-in for a period of time.  In extreme cases, it is possible that the abrupt departure of an employee could cause economic harm to the business such as lost sales, loss of customers, loss of market share, etc.  However, in most cases, employers do not suffer large tangible losses as a result of an employee leaving without proper advanced notice – often it is more about aggravation and inconvenience as opposed to tangible losses.  Because of this, it is usually not worth it for an employer to pursue a damage claim against a departed employee.

Employers who find themselves in this situation and need the employee to provide a lengthier period of notice of resignation should consider trying to persuade the employee to re-think their position and provide appropriate notice of resignation.  It should be noted to the employee that they are putting the employer in a very difficult position and that the employee should not want to leave on bad terms.  Ultimately, such an action by an employee is going to colour the employer’s view of the employee and will likely affect the type of reference that will be given, disqualify the employee for potential future rehire, etc.

Chris Foulon is a Partner of Israel Foulon LLP, a leading employment and labour law firm in Toronto. Chris can be reached at 416.640.1550 or cf@israelfoulon.com

LEGAL DISCLAIMER: This article is for informational purposes only and is not intended to provide legal advice, which in all circumstances must be tailored to the specific facts of any problem. You should obtain a proper legal consultation in order to determine how this article applies to your specific situation.
Please feel free to contact Israel Foulon LLP to learn more at 416-640-1550.

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