Tuesday, August 5, 2014

"Waiving" the Notice Period: The Supreme Court Weighs In

There are some interesting questions surrounding 'waived' notice of resignation, mostly theoretical, but sometimes of great import to an employee's entitlements.  If I give notice of resignation, what impact does it have if my employer sends me home right away?

It's a very common practice, sending home employees with pay, and the theoretical implications are seldom explored, but there's a recent case from the Supreme Court of Canada involving a Quebec employer sending home a resigning employee without pay.

The Facts and Judicial History

Daniel Guay worked for Asphalte Desjardins since 1994, and on Friday February 15, 2008, he gave notice that he would resign effective March 7, 2008, explaining that a competitor had offered him a position at a higher salary.

On the following Monday, February 18, 2008, Asphalte Desjardins attempted to persuade Guay to stay, but were unsuccessful, so they terminated his employment effective February 19, 2008.

The Commission des normes du travail (roughly the Quebec equivalent of the Director of Employment Standards) sought three weeks' pay for Mr. Guay.

Understand that Quebec has a different legal framework from the rest of the country - whereas an Ontario employee's obligation to give notice of termination is a function of contract (and often of common law), Quebec has a more-or-less comprehensive civil code.  There is no 'common law' in Quebec, and the employee's obligation to give notice is a function of statute.  Mr. Guay's notice of resignation, accordingly, was in compliance with a statutory obligation intended for the employer's protection.

The employer argued that it was entitled to waive that protection - i.e. that by not holding Mr. Guay to the three weeks' notice of resignation, it was relieving Mr. Guay of that obligation.  The trial judge found that Mr. Guay was entitled to choose the end date of the relationship, and the employer wasn't entitled to waive it.

The Quebec Court of Appeal disagreed, allowing the appeal, and concluding that the notice of resignation cannot result "in a synallagmatic obligation that would be binding on the party who receives it".  (Synallagmatic is basically a fancy way of saying 'mutual', in Quebec legalese.)  In other words, giving a notice of resignation doesn't force the employer to continue to employ you.

The decision turns in many ways on statutory interpretation unique to Quebec, but there are clear problems with it, largely illustrated by the dissent at the QCCA and by the decision of the SCC.

The Supreme Court's Decision

In its recent reasons found here, the SCC restored the trial judge's decision.

It's fairly dense, but the SCC essentially agreed with the dissent from the QCCA, concluding that the effect of the notice of resignation is to terminate the relationship as at the effective date of the notice, and that a termination earlier must either be (a) a unilateral act by the employer, triggering obligations to provide notice, or (b) by agreement.

Since there was no agreement, the termination was unilateral, and the employer was obligated to provide pay in lieu of notice.

However, the SCC speculated that the Commission might have been wrong to limit its claim to only the three weeks' of notice the employee had given - there may have been an argument (foreclosed by the pleadings) that the termination entitled the employee to full pay in lieu of notice.


This is an important decision for employment law and statutory interpretation in Quebec.  Its impact in Ontario may be less direct.  The substantive law in issue is different, the language is different, the concepts are different, the underlying theory is different...but ultimately, there are a number of parallels, and it seems very likely that, given the same question arising from a common law jurisdiction, the Supreme Court would come down the same way.

There is room for exceptional fact-patterns, but in general, the waiver of a period of notice of resignation must be characterized along the lines of a paid leave - basically, the individual continues to be an employee, and continues to be paid in full, until the notice of resignation expires, but is working out the notice period at home.  Otherwise, if the employer takes unilateral actions which might be characterized as terminating the employment contract (i.e. refusing to continue paying the individual), then it will probably be on liable to the employee for wrongful dismissal.

Indeed, the theoretical debate about whether or not the Commission should have claimed more than 3 weeks?  Probably less arguable in Ontario.  To the extent of common law or contractual entitlements, it's almost certain that the fact that an employee had given notice of resignation will bar a claim for common law damages.  However, the statutory termination pay and severance would very likely be payable in full, regardless.

One might also imagine a scenario where an employee was sent home with pay, but still argued that this constituted a constructive dismissal, potentially leading to a claim exceeding the value of salary over the resignation notice period.  While there is case law recognizing an employer's legitimate interests in protecting its data from departing employees, 'removal of responsibilities' is typically a strong candidate for constructive dismissal.  Particularly in cases where there are performance-related components of a variable compensation package, an employer would likely have to pay on the basis of a fair evaluation of what the employee would have earned if he continued working.  Even then, if I'm a senior manager, and my contract requires me to give 3 months' notice of resignation, I might have legitimate objections to losing out on three months of performing my job functions.

On the flip side, it's also extremely clear that unreasonably long notices of resignation don't have to be respected by the employer.  Suppose my contract entitles my employer to dismiss me on 12 weeks' notice, and I give something ridiculous like 18 months' notice of resignation.  My employer is free to accept that, and keep me on for 18 months.  On the other hand, my employer also remains free to trigger its own termination entitlements, and dismiss me on 12 weeks' notice or pay in lieu thereof.

At the end of the day, this SCC decision is probably right, and even in common law jurisdictions accords with the wide consensus of the appropriate approach:  There`s really no such thing, at law, as 'waiving notice of resignation'.  But there are possible nuances to be argued about in the future.

And fundamentally, the result in this case just seems right.  For an individual employee, uninterrupted earning can be very important:  The safe way to transition to a new job is always to line up the new job first, if possible, get the start date ironed out and the contract finalized, and then to give the appropriate notice to your old employer - to expire the day before your new job starts.  Sometimes the new employer might be flexible on the start date, but you can't be sure of that.  And if you're living paycheque-to-paycheque, and the old employer cuts off your income through the notice period, that can be very harmful to your financial health.

I've actually seen written contracts drafted with such an effect: You have to give us x notice of resignation, and once you've given us such notice we can send you home at any time without any further obligations to you.

I have serious misgivings about the enforceability of such language, and the SCC's decision merely reinforces those misgivings, but it's an issue I've never seen litigated.


This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.

The author is a lawyer practicing in Newmarket, primarily in the areas of labour and employment law and civil litigation. If you need legal assistance, please contact him for information on available services and billing.

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