By now, we all know what a wrongful termination is in the
employment context. But how many have heard of a wrongful
resignation? The Superior Court of Ontario recently
reminded us that employers are within their rights to bring a
wrongful resignation claim against an employee who fails to provide
her or his employer with reasonable notice of resignation.
In this case, Gagnon &
Associates Inc. ("GA") hired Barry Jesso
("Jesso") in 1996 for the shipping/receiving department.
Within a year, Jesso had worked his way into a sales role. By 2006,
Jesso was one of GA's top sales associates, himself accounting
for approximately 30 per cent of GA's total sales - earning him
$180,000 in salary. Jesso, however, felt he was underpaid and
secured replacement employment with a competitor while still with
Jesso gave GA notice of his resignation on July 14, 2006. His
resignation was effective that same day and Jesso never worked at
In the months that followed, some of GA's clients gave
notice that they were taking their business to Jesso's new
employer. GA also had some difficulty finding an experienced
salesperson to replace Jesso.
At trial, GA took the position that Jesso's failure to
provide adequate notice of his resignation prevented GA from
implementing an appropriate transition plan, costing the company
significant sales. Jesso took the position that he was not a
managerial or fiduciary employee and was therefore not required to
provide any additional notice of his resignation.
The Court agreed with GA, finding that the reasonable
resignation period ought to have been two months and that
Jesso's departure resulted in lost sales:
39. The notice required of
an employee will be a function of that employee's position with
the employer and the time it would reasonably take the employer to
replace the employee or otherwise take steps to adjust to the
40. Although Jesso was a salesperson with no
managerial responsibilities, he was a senior employee with ten
years' experience and was responsible for a significant
percentage of GA's sales. The evidence at trial
established that the market for experienced HVAC salespersons was
limited and that a replacement hire could not be made until
September of 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 been appropriate.
The Court awarded GA $35,164 representing the loss in sales
suffered by GA over the two month period following Jesso's
Take home for employers
According to the Court, a reasonable resignation period is based
on the employee's position, length of service and the time it
would reasonably take the employer to replace the employee or
otherwise take steps to adjust to the loss.
While the right to bring a wrongful resignation claim against a
former employee serves as a strong protection for employers who
have suffered a loss resulting from the departure of an employee on
inadequate notice, employers are better off protecting against
these types of resignations by including language in employment
agreements that sets out the precise amount of notice an employee
must provide when resigning.
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).