Canada: While There May Be Damages For Employee's Lack Of Resignation Notice, There Is No Reliable Substitute For An Enforceable Restrictive Covenant…

A 2016 decision of the BC Court of Appeal is a good reminder to BC employers of the purpose of an employee's obligation to provide reasonable notice of resignation and, if breached, what an employer can expect to recover. It also underscores the value of an enforceable restrictive covenant.


In 1997, Peter Walker began working as a manager for his aunt and uncle's business, Consbec Inc., which was based in Ontario and provided blasting and drilling services to the mining, road building, and construction industries. Consbec's business was based on submitting winning bids for public and private sector clients and did not involve guarantees of repeat business. Following Consbec's expansion into western Canada in 1999, Mr. Walker took a position as manager at Consbec's office in Kamloops, BC. Mr. Walker never signed any employment agreement or restrictive covenants with Consbec.

In 2002, Mr. Walker unexpectedly resigned from Consbec, without providing any advance notice. Consbec dispatched two employees to respond to Mr. Walker's resignation, and discovered evidence that Mr. Walker had been planning to establish a competing business. In the four years following his resignation, Mr. Walker did in fact establish a competing business and obtained a number of blasting and drilling contracts with entities that Consbec considered its clients.

Consbec's Lawsuit

Consbec sued Mr. Walker, claiming he breached his employment contract, as well as his fiduciary and common law obligations, when he resigned without notice and then established a competing business. In the trial decision, the court found that Mr. Walker was not a fiduciary, as, among other things:

[182] Peter made no corporate decisions, nor was he asked to participate in corporate meetings. Peter was not party to corporate decisions or policy making policy for Consbec, hiring and firing employees of Consbec, determining salaries or bonuses, or determining non-union wages in his division. He received no company financial records or financial statements, and he was not entitled to do so. On behalf of Consbec, Peter could not sign cheques. He could not direct the payment of accounts electronically, or move and transfer Consbec's money from its bank accounts. Peter could not influence the payment of accounts or the transfer of funds. Nor could he direct Consbec employees, such as Mr. Sawdon, to make payments or transfer funds. Peter had no corporate credit card.

Rather, the trial judge found that Mr. Walker could best be described as an "estimator", even though Consbec described him as a manager. The trial judge also found that there was no evidence that Mr. Walker had competed unfairly during his employment or made any improper use of Consbec's confidential information following his employment. As he was not a fiduciary, did not breach his common law duties of loyalty or confidence and was not subject to any restrictive covenant agreements, the court found there was no limitation on Mr. Walker's right to quit his employment and immediately compete with Consbec.

The court did find that Mr. Walker breached his notice obligations, noting the "purpose of notice is to provide time for the employer to make arrangements to have the work that the departing employee performed looked after by others, or to find another employee." The court held the length of resignation notice is to be determined considering the employee's "responsibilities, length of service, salary, and the time it would reasonably take the employer to replace the employee" or otherwise address the vacancy. However, the court declined to determine Mr. Walker's notice period, finding it was too speculative. Instead, the court concluded that Mr. Walker should pay damages based on Consbec's lost opportunity to make a smooth transition, and awarded Consbec $56,116.11 – the total costs it had incurred in sending its two employees to Kamloops to deal with the fallout of Mr. Walker's departure. Both parties appealed the court's decision.

The Court of Appeal's Decision

In the BC Court of Appeal's decision, the court found the judge's failure to assess the period of notice that Mr. Walker should have provided Consbec to be an error. Without undertaking this fundamental step, the trial judge was unable to properly undertake the second step of assessing what damages Consbec suffered during the notice period. Agreeing with the trial judge that Mr. Walker was a "manager" in name only, the Court of Appeal found that he should have provided one month of notice of resignation to Consbec.

On the second question, the Court of Appeal noted "the measure of damages is not the cost to Consbec as a result of Peter leaving the company, but the cost to Consbec as a result of Peter's failure to give notice." The court found that a number of expenses underlying the trial judge's damage award would have been incurred regardless of whether Mr. Walker provided proper notice and that the trial judge had not accounted for money Consbec saved in not having to pay Mr. Walker's salary during the notice period. After undertaking further analysis of Consbec's losses during the notice period, the Court of Appeal determined that Consbec had not, in fact, sustained any measure of damages, and set aside the damage award in its entirety.


This case is a good reminder for BC employers regarding employee status, resignation and post-employment competition:

  1. A "manager" in name only will not suffice to establish heightened duties, including fiduciary duties, if the substance of the employee's role does not support a heightened or fiduciary relationship;
  2. Although there is no statutory obligation in BC for employees to provide a minimum amount of notice of resignation, employees are nonetheless under a common law obligation to provide their employer sufficient notice to adjust to or mitigate their departure. For employees in key or more senior positions, the notice period will be longer;
  3. When an employee breaches the obligation to provide reasonable notice of resignation, an employer must prove the damages it suffered as a result of the failure to provide notice, not as a result of the employee's resignation;
  4. Even if an employee is a fiduciary, reasonable notice of resignation and a fiduciary duty may not be sufficient to adequately protect your business, so restrictive covenants should be considered (with appropriate advice to ensure enforceability); and
  5. Restrictive covenants should be considered for any employees who could relatively easily compete with and potentially harm your business' interests, whether or not the employee is a fiduciary or manager.

To view the original article please click here.

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

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
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).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.