An employer who receives notice from an employee that they are resigning from their employment may not immediately terminate the services of the employee without running the risk of being required to provide the employee with reasonable notice of termination.

The Facts

Mr. Daniel Guay worked as a project manager for Asphalte Desjardins Inc. ("Asphalte Desjardins") from 1994 to 2008. Mr. Guay announced his resignation to Asphalte Desjardins on February 15, 2008, and notified the company that his last day of work would be on March 7, 2008. Asphalte Desjardins, however, terminated his employment on February 19, 2008.

The Labour Standards Commission / Commission des normes du travail ("C.N.T.") instituted proceedings before the Court of Québec on Mr. Guay's behalf, claiming an indemnity in lieu of prior notice of termination equivalent to three (3) weeks of his salary, i.e. the period running from February 19 to March 7, 2008 (the termination date that had been initially announced by Mr. Guay).

The Decisions of the Lower Courts

The Court of Québec allowed the claim and held that the employee was entitled to the payment of an indemnity in lieu of notice, pursuant to section 82 of An Act respecting Labour Standards ("L.S.A.").

The Court of Appeal overturned the decision of the lower court. Writing for the majority, Justice Bich concluded that an employer could freely renounce to notice that the resigning employee had provided pursuant to article 2091 of the Civil Code of Québec ("C.C.Q."). By so doing, the employer would not be terminating the contract of employment within the meaning of section 82 of the L.S.A. Justice Bich explained that this section did not govern the resignation of an employee, but rather applied to a situation where an employer initiated the termination of the employee's employment.

The Supreme Court of Canada's Decision

The Supreme Court of Canada overturned the decision of the Court of Appeal, holding that an employer who receives notice of termination from an employee may not unilaterally terminate the employee’s employment before the effective date of the resignation, without being required to provide the employee with reasonable notice of termination or an indemnity in lieu of such notice.

The Honourable Justice Wagner, writing for the Supreme Court of Canada, stated that the obligation to provide notice of termination under article 2091 of the C.C.Q. applied to both parties. The notice of termination that is provided is not for the sole benefit of the party receiving the notice. Contrary to what had been decided by the Court of Appeal, the Supreme Court ruled that as long as the employment relationship is not officially terminated, each party to the contract of employment must comply with its obligations. Accordingly, an employer who terminates the contract before the effective date of the employee's resignation is terminating the contract within the meaning of section 82 of the L.S.A., and thus exposes itself to a claim based on sections 82 and 83 of the L.S.A.

Conclusion

We believe that this is an important decision that puts an end to what was a lengthy debate in the Québec case law. Although Québec employers welcomed the decision that had been rendered by the Court of Appeal and welcomed the management rights that had been recognized, it is now clear that the Supreme Court was of a different view. In this regard, the Supreme Court has removed the employer’s discretion to set aside a notice of resignation provided by a departing employee.

Québec employers may no longer renounce to a notice of resignation received from a departing employee without running the risk of being required to indemnify the employee for his or her lost wages during the entire notice period.

That having been said, it would have been desirable for the Supreme Court to have qualified its judgment with certain nuances, so as to permit employers to protect their legitimate interests, particularly in cases where an employee leaves an employer to join the ranks of a competitor. In such a case, it would have been useful to consider the possibility of allowing an employer to terminate the contract of employment immediately, without being obliged to pay any amounts whatsoever to the departing employee.

Author

Alexandre W. Buswell 
ABuswell@blg.com
514.954.2541

Expertise

Labour and Employment
Labour and Employment Law