The Supreme Court of Canada has ruled that an employer who receives notice of resignation from an employee cannot terminate the contract of employment before the notice period expires without providing notice of termination or pay in lieu thereof.
In a prior edition of EMPLAWYERS’ UPDATE, we informed our readers of the Quebec Court of Appeal’s decision in Quebec (Commission des normes du travail) v. Asphalte Desjardins Inc. This is the case of Daniel Guay, who on February 15, 2008, advised his employer, Asphalte Desjardins Inc., that he would be leaving its employ and moving to a competitor on March 7, 2008. Failing to dissuade him from resigning, the company terminated his employment on February 19, 2008.
The Quebec Labour Standards Commission successfully brought an action, on Mr. Guay’s behalf, claiming three weeks’ pay in lieu of notice of termination and vacation pay, pursuant to Quebec’s An Act Respecting Labour Standards (the “Act”), which corresponded to his notice of resignation. Shortly thereafter, the decision was overturned by the Quebec Court of Appeal.
On appeal to the Supreme Court of Canada, the Court allowed the appeal, restoring the prevailing jurisprudence which generally requires an employer to provide notice of termination when ending the employment relationship in advance of an employee’s declared resignation date, pursuant to section 82 of the Act. Also pursuant to the Civil Code of Québec (“the Code”), both the employer and employee must provide notice of termination. The Court’s decision was founded on the interplay between the Code and the Act, and the harmonious interpretation of both laws.
Asphalte Desjardins had argued that its termination of the employment relationship in advance of the resignation date was simply a renunciation of its right to notice of resignation. Justice Wagner, writing for the majority, rejected this argument on the basis that although, renunciation of contractual rights by one party relieves the other party from performance of its obligations, it would be unequivocally “inappropriate” and an “unacceptable fiction” to apply this construct in the present context.
The Court further noted that while the Code does not provide an employer with the right to obtain pay in lieu instead of working notice of resignation, in the manner that an employee may, it also does not provide the employer with the right to waive or renounce notice of resignation. If the employer no longer wishes to have the employee in the workplace subsequent to the employee’s provision of notice of resignation, the employer must provide pay in lieu of notice.
In addition, however, the Court noted that the provisions of the Act and the Code would not apply to instances where termination of contract flows from an agreement between the parties.
Employers in Quebec should take note that the Supreme Court of Canada has ruled that an employer is prohibited from terminating a departing employee during the notice of resignation period without providing notice of termination or pay in lieu thereof. In other words, an employer who terminates an existing employment contract is liable for notice of termination, regardless of whether the employee has announced a resignation date. The same law applies in Ontario.