Most Canadian employers know about their obligations to provide notice or payment instead of notice to employees when terminating their employment without cause. But what about employees? Do they also have to provide their employers with reasonable notice of their intention to quit their job? What happens if a key employee leaves suddenly without providing notice? Those issues were explored in the recent decision of Gagnon & Associates Inc. et al. v. Jesso et al., 2016 ONSC 209.
In this case, the employee (BJ) was hired in 1996 by Gagnon & Associates (G&A). G&A was in the heating, ventilation, and air conditioning business. The employee started at G&A in shipping, receiving, and pricing, making less than $22,000 per year. Over time, his responsibilities and salary grew. By 2004, he was a key salesperson making over $180,000 per year, responsible for a very large percentage of the company’s sales.
Feeling that he was underpaid, BJ started looking elsewhere for work. He was approached by a competitor that wanted to open a new office in the same city as G&A. He was offered a new position with this competitor, along with another salesperson at G&A. Both accepted on June 19, 2006.
On July 14, 2006, both employees handed in their letters of resignation. The resignations were effective the same day. BJ offered to continue working for two weeks but only to complete existing projects and only if he was paid the amounts he felt were owing for unpaid commissions. His employer refused the conditions in the resignation letter and BJ left that day.
Notice by employees
The court concluded that BJ had an obligation to give reasonable notice of his departure to his employer. His letter of resignation was inadequate. While he had offered to stay for two weeks, this offer was conditional on receiving certain payments. He had also refused to undertake new projects during that period. As such, G&A was unable to put in place a transition plan as a result of BJ’s sudden departure.
The court stated that BJ should have provided his employer with more notice of his intention to leave his job. The length of the proper notice for an employee depends on many factors, including the position held by the employee and the time required to replace him or her.
In this case, BJ had worked for G&A for over 10 years. He was responsible for a significant percentage of its sales. It was difficult to find a replacement for him. He also knew that another employee would be quitting on the same day. Therefore, the court concluded that BJ should have given two months of notice of his intention to quit to G&A.
After BJ left, G&A’s sales went down significantly. The court looked at this decline in sales to determine what should be awarded to G&A to compensate it for BJ’s sudden departure. The court concluded that G&A lost $35,164 during that two-month period as a result of BJ quitting without giving notice. BJ was required to pay his former employer this sum for his failure to provide adequate notice of his intention to quit.
Lessons for employers
While employers in Canada are required to give notice when employment is terminated without cause, employees also have the obligation to provide notice of their intention to quit their jobs.
The amount of time an employee must give will depend on many factors. If an employee knows that his employer will be particularly vulnerable following his departure, then he will have to provide greater notice of his intention to quit. If an employer incurs significant losses as a result of an employee’s sudden departure, the former employee could be held liable for those losses.