Most people will be familiar with the concept of wrongful termination, but fewer will be familiar with its counterpart — wrongful resignation or wrongful quitting as it is sometimes called.
This is not surprising given the relative dearth of law on the subject. This article, therefore, aims to provide some clarity on the issues and an overview of some of the important principles governing this little-known topic.
What Does 'Wrongful Resignation' Mean?
When someone says that they've been wrongfully dismissed, generally speaking, people know what they mean — that they were let go without being provided proper notice by their employer. But did you know that there's a reciprocal obligation on employees who resign to provide due notice of termination as well? Despite having been around for decades, the topic has garnered only modest consideration and attention by the courts.
In those cases where the court has grappled with the issue, it has been made clear that an employee is legally obligated to give reasonable notice of termination, even without a written employment contract. This obligation has been held to flow from an employee's implied contractual duty of good faith, fidelity and loyalty.
The purpose of the notice of resignation is to allow an employer reasonable time to find a comparable replacement. While it is perhaps true that no person is ultimately irreplaceable, from an employment perspective, it is not difficult to understand how the abrupt departure of a key employee with specialized knowledge could disrupt a company's operations. It is for this reason that employees who fail to provide reasonable notice of termination can be found liable for damages their employer may have suffered as a result.
How Much Notice is Reasonable?
As always, the starting point for this consideration is the statutory standard governing notice for employees and employers alike. Under The Employment Standards Code of Manitoba, an employee who resigns from their employment is required to provide at least:
- one (1) weeks' notice, if they have worked for less than a year; or
- two (2) weeks' notice, if they have worked for a year or more,
subject, of course, to certain stipulated exceptions. The law, however, is clear: this statutory notice period is a minimum only, which is to be supplemented by the common law.
At common law, absent some express provision in the employment contract specifying the amount of notice to be given, all that is required of an employee is to provide "reasonable notice." And in determining what is "reasonable" in the circumstances, a court will look at a variety of factors, including:
- the employee's duties and responsibilities;
- the employee's salary;
- the employee's length of service; and
- perhaps most importantly, the time it would reasonably take for the employer to find a comparable internal or external replacement.
While it may be thought that the length of notice an employee is required to give should be commensurate with what an employer would be obligated to provide in the reverse situation, that is not the case. Though perhaps a fair argument, the two concepts of notice have different underlying rationales, so the considerations are typically not interchangeable.
The justification for employer notice is to provide an employee with an income while looking for comparable employment. In contrast, employee notice aims to address any potential inconvenience to the employer.
The Requirement to Prove Damage
None of this is to say that an employer would be well served to sue every time an employee leaves without providing what might otherwise be reasonable notice. On the contrary, for a claim for wrongful resignation to be successful, it requires that an employer prove it sustained damage as a result of the failure of the employee to give notice. Mere inconvenience is not enough, and something more, such as lost profits, is required.
In the circumstances, consideration will have to be given to whether or not it is economically viable against any potential losses and the legal fees associated with recovering those potential losses, balanced against any amounts potentially saved by not having to pay the employee's wage during the notice period.
Takeaway
The takeaway is simple: employers and employees would do well to consider incorporating a notice provision into the employment agreement. Not only does this allow the parties to establish expectations at the outset of the relationship, but it also provides protection for both sides: for employers, it gives peace of mind that they will have sufficient time to find a replacement should a key employee leave; and for employees, to know that so long as they comply with the notice requirements, that they mitigate the risk of an indeterminate amount of liability.
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.
