In a recent decision, the Quebec Court of Appeal ruled for the first time that an employer can waive the notice given by an employee who resigns. In so doing, the Court of Appeal overruled the line of authority holding that resigning employees are to be compensated when they give notice of resignation and the employer waives it and terminates their employment before the announced departure date.
The employer, Asphalte Desjardins Inc., is a road paving company in the Basses-Laurentides region of Quebec. On February 15, 2008, a project manager, Daniel Guay, who had been with the company since 1994, tendered his resignation. In the resignation letter, he stated that he planned to leave for a competitor on March 7, 2008. The three-week period between the date of notice and the date of his departure would be used to finish up files and thereby ease the transition for his successor.
However, because Mr. Guay was going to work for a competitor, the employer decided to terminate the contract of employment on February 19, 2008, rather than wait until Mr. Guay's announced departure date.
The Commission des normes du travail (CNT), arguing that Mr. Guay had been dismissed and was therefore entitled to pay in lieu of notice under section 82 of the Act respecting labour standards (ALS), claimed an indemnity on behalf of Mr. Guay corresponding to the time between the date of notice and the effective date of Mr. Guay's resignation, plus annual vacation pay for that period.
The trial judge accepted the CNT's claim and ordered the appellant to pay $6,518.99 with interest.
The question raised by this decision is whether an employer can waive the notice of termination that is provided by a resigning employee pursuant to Article 2091 of the Civil Code of Québec (CCQ) without incurring the obligations arising from sections 82 and following of the ALS.
In a two-to-one decision written by Justice Bich, the Court of Appeal allowed the employer's appeal.
According to the majority decision, the party that receives notice under Article 2091 CCQ may waive such notice if it feels that it is in its interests to do so. In fact, both the employee, under certain, strict conditions, and the employer, without conditions, may forgo the benefit of the notice required for unilateral terminations.
Moreover, Justice Bich explains that an employer who forgoes the benefit of the notice to which it is entitled under Article 2091 CCQ is not obligated to indemnify the resigning employee. The employer's waiver of its right to reasonable notice of termination does not terminate the contract of employment within the meaning of section 82 ALS as section 82 does not apply to resignations. A resignation does not turn into a dismissal when the employer waives such notice.
Finally, Justice Bich notes that the exercise of the employer's right to waive notice could be found to be abusive within the meaning of the CCQ and result in an employee being deprived of compensation that he or she might legitimately rely on. By way of example, she refers to the situation of an employee who announces his retirement a year before the expected retirement date or who notifies his employer in advance that he has to leave to take care of a sick person. Justice Bich states that such situations would not be covered by section 82 ALS, either. According to the judge, legislative action to protect the interests of employees in such circumstances is desirable—a protection that, moreover, underlies the labour laws.
This decision reverses the dominant Court of Québec case law position holding that an employer who waives notice given by an employee, has to pay the employee salary equivalent to the notice period. Employers worried about the possibility that a resigning employee will benefit from the notice period to unduly compete with them, harm their interests or poison the work environment may therefore waive such notice without compensating the employee.
A question may already be asked about the practical consequences of such a decision. Employees usually give their employers relatively long notice. It is possible that the fear of being without salary or employment insurance benefits if notice of resignation is waived will lead employees who cannot afford to go without salary during the notice period to consider giving their employers very short notice. If this happens, will employers choose to exercise the seldom-used, but available, remedy of suing resigning employees for insufficient notice of termination?
However, as the CNT has announced its intention to ask the Supreme Court to review this matter, it will likely be some time before we will know the answer to this question.
Norton Rose Group
Norton Rose Group is a leading international legal practice. We offer a full business law service to many of the world's pre-eminent financial institutions and corporations from offices in Europe, Asia, Australia, Canada, Africa, the Middle East, Latin America and Central Asia.
Knowing how our clients' businesses work and understanding what drives their industries is fundamental to us. Our lawyers share industry knowledge and sector expertise across borders, enabling us to support our clients anywhere in the world. We are strong in financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and pharmaceuticals and life sciences.
We have more than 2900 lawyers operating from 43 offices in Abu Dhabi, Almaty, Amsterdam, Athens, Bahrain, Bangkok, Beijing, Bogotá, Brisbane, Brussels, Calgary, Canberra, Cape Town, Caracas, Casablanca, Dubai, Durban, Frankfurt, Hamburg, Hong Kong, Johannesburg, London, Melbourne, Milan, Montréal, Moscow, Munich, Ottawa, Paris, Perth, Piraeus, Prague, Québec, Rome, Shanghai, Singapore, Sydney, Tokyo, Toronto and Warsaw; and from associate offices in Dar es Salaam, Ho Chi Minh City and Jakarta.
Norton Rose Group comprises Norton Rose LLP, Norton Rose Australia, Norton Rose Canada LLP, Norton Rose South Africa (incorporated as Deneys Reitz Inc), and their respective affiliates.
On January 1, 2012, Macleod Dixon joined Norton Rose Group adding strength and depth in Canada, Latin America and around the world. For more information please visit nortonrose.com.
Norton Rose will join forces with Fulbright & Jaworski L.L.P on June 1, 2013, creating Norton Rose Fulbright a global legal practice with significant depth of expertise across the USA, Europe, Asia, Australia, Canada, Africa, the Middle East, Latin America and Central Asia.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.