The recent decision of Gagnon & Associates Inc. et. al. v.
Jesso et. al., by the Superior Court of Ontario
reminds employers and employees alike that at common law reasonable
notice is a two-way street; not only must an employer provide an
employee with reasonable notice of termination, but an employee
must also provide reasonable notice of resignation.
This decision is in respect of a claim for wrongful
resignation brought by the employer Gagnon &
Associates Inc. (the Company) related to two disgruntled employees;
Barry Jesso (Jesso) and Patrice Comeau (Comeau). Jesso and Comeau
together were responsible for 60% of the Company's sales. Jesso
worked for 10 years for the Company and felt he was underpaid. The
Company maintained the status quo and did not improve Jesso's
In response, Jesso and Comeau approached a competing company
with a proposal to open up a new office in the same region in which
they worked for the Company. The competing company hired them and
in July 2006, both Jesso and Comeau gave the Company their
resignation letters, effective the same day. Jesso offered to work
two additional weeks to complete his existing duties, conditional
upon the Company's acceptance of his calculation of commission
owing to him. The Company refused and Jesso never returned to work.
The Company struggled to find qualified salespersons to take the
place of Jesso and Comeau and in light of losing its two most
senior salespersons, the Company's sales were negatively
The Company led expert evidence that the departure of Jesso
resulted in significant loss of sales for which it claimed it
should be compensated. Specifically, the Company pled that in the
three year period following Jesso's departure the Company made
between $2.782 million and $3.14 million less than it would have
had Jesso and Comeau remained in its employ.
The Court found that Jesso did not give reasonable notice of
resignation and stated:
"[...] he was a senior employee
with 10 years' experience and was responsible for a significant
percentage of [the Company]'s sales. The evidence at trial
established that the market for experienced HVAC sales persons was
limited and that a replacement hire could not be made until
September 2006. In addition, Jesso knew that Comeau, the other
senior salesperson would be leaving GA on the same day thereby
putting GA in a significantly difficult position. In these
particular circumstances, a notice period of two months would have
The Court did not accept the Company's calculation of lost
revenue and Jesso's associated liability. In this regard, the
Court held that Jesso's share of lost revenue to the company
over a two month period amounted to $35,164. In response to the
Company's claim for wrongful resignation, Jesso successfully
countersued for commissions owing to him which the Court found to
be $38,501. These amounts were set off against each other, but the
employer could at least make claim to a moral victory.
As noted in the decision, it is a well-established common law
principle that an employee is obliged to give reasonable notice of
resignation from employment. The notice required of an employee
will be a function of that employee's position, length of
service with the employer and the time it would reasonably take the
employer to replace the employee or otherwise take steps to adjust
to the loss. When an employee, especially a key employee, offers
his or her resignation, absent a contractual agreement, an employer
need not accept a short resignation notice period, especially if it
will leave the employer in a vulnerable position. For employers, it
is always wise to include a term in an employee's employment
agreement that stipulates the notice period an employee must give
in regard to his or her resignation.
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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