Not long ago, we
reported on a recent Supreme Court of Canada decision dealing
with when suspensions with pay can sometimes be considered
On that same theme, it is worth noting the significant problems
that can arise if an employer asks an employee to leave before a
set term is up. This can arise in two cases: when a fixed term
contract is about to end and when the employee has provided notice
of his resignation.
The former situation was reviewed recently by the Alberta Court
of Appeal in a case involving Cardel Homes LP. In that case, a
second fixed term employment contract was about to end. One month
before its end, the employee was advised by letter that his
employer would not be entering into another employment contract
with him. The letter also advised him that he would not be required
to attend work for the remainder of the term of the contract,
although he would be paid to the end of the term. The letter
instructed him to immediately return the keys to his place of
employment, his card key and his computer password. Unfortunately,
the Court of Appeal upheld the decision of the trial judge that
this amounted to "constructive dismissal". That was a
conclusion with major consequences. The employment contract
required the employer to pay a severance payment of 12 months'
salary if the employment was terminated early. That is what the
lucky employee was awarded. In order to avoid the inconvenience of
another month of the employee working out the term, the employer
paid a severe penalty.
The notice of resignation situation has not been addressed in a
recent case but comes from a careful review of the Alberta
Employment Standards Code. The Code, with some
exceptions, requires employees with more than 3 months but less
than 2 years' service to give 1 week notice of their
resignation and employees with more service than that to give 2
weeks' notice. Employers on the other hand may owe up to 8
weeks of statutory notice of termination. If the employee gives the
minimum notice of resignation (1 or 2 weeks depending upon length
of service) and the employer asks him/her to leave early, the
employer only owes the employee the balance of the resignation
notice period. That makes sense. However, many will be surprised to
learn what is stated in the Code (s. 59(2)) if an employee
gives more than the minimum required notice of his/her resignation
and the employer wants to terminate his/her employment earlier than
that. In those cases, the employer must pay what would have been
owing under the statute if it was the employer terminating the
employment. So, taking for example an employee with 10 years of
service: if he gave 3 weeks' notice of resignation but the
employer asked him to leave after 1, the employer would then owe
him not just for the balance of the resignation period (2 weeks)
but for 7 weeks' pay for the balance of the 8 weeks'
termination pay that would have been owing if it had been from the
beginning an employer discharge.
The lesson in all of this is to be very careful before you ask
an employee to leave earlier than he/she planned.
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.
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