Resignation from Employment – Wrongful Resignation

While there is no requirement in Ontario for employees to provide notice of resignation to their employer, the parties can contract for a reasonable notice of resignation period. The purpose of any such notice is to enable the employer to find a replacement for the resigning employee. The courts will determine what a reasonable notice period is based on the length of time that it should take for the employer to find a comparable substitute employee. Should an employee contract to provide a certain notice period for resignation and provide the employer with less notice than agreed, the employer may sue for damages suffered provided it can prove them.

Damages awarded by the court to an employer can include such items as costs of advertising for the new employee, fees to a placement agency, and cost of overtime worked by other employees. In situations where an employee was indispensable to the operation and as a result of the employee’s leaving on short notice the operation had to shut down, or become significantly less productive, the employer may be able to sue the employee for all damages incurred during the notice period. However, costs saved in not having to pay the employee’s salary during the period of notice will be deducted from any damages awarded. The employer has a duty to mitigate its damages by providing a replacement.

When an employee resigns without giving the full notice of resignation agreed to in the employment contract, the employer can sue for lack of notice or may waive it and accept the employee’s conduct and breach of contract. The employer and employee can agree to extend a resignation notice period but it is then likely that the extension period would be considered a fixed term contract of employment.

If the employer terminates the employee during any resignation notice period or any extension of the resignation notice period, the employer will have to provide reasonable notice, or pay in lieu thereof, in accordance with the contract or common law. If any employee resigns but the employer asks the employee to leave immediately, the employer will have to provide reasonable notice, or pay in lieu thereof, up to the point that the employee had decided to leave anyway.

 

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Christina J. Wallis is a Partner, practising civil litigation with a focus in Employment Law at Dale & Lessmann LLP. To speak to Christina please call 416-369-7832 or send an email to her at cwallis@dalelessmann.com