Can an employer waive notice of resignation without pay? In Quebec, the answer is yes, at least for now.
Daniel Guay worked for Asphalte Desjardins Inc., but then secured preferable employment with a competitor. He provided his employer with three weeks’ written notice of resignation, but the employer decided to immediately terminate his employment.
The Quebec Labour Standards Commission sought three weeks’ pay for Mr. Guay pursuant to An Act Respecting Labour Standards (the “Act”). While the Court initially found in favour of Mr. Guay, on appeal, the Quebec Court of Appeal overturned the decision.
Prior to this decision, the case law in Quebec generally held that an employer had to provide pay during a notice period if it waived an employee’s notice of resignation, pursuant to section 82 of the Act.
The Court of Appeal’s decision is founded on provisions of the Civil Code of Québec (the “Code”), which provides that an employee may not renounce his right to compensation where insufficient notice of termination is given. The Court stated that it therefore flows from the Code that, if the obligation to give notice has been placed on the employee, not the employer, then the employer may choose to renounce its right to notice of resignation.
The Court also considered another section of the Code, which states that a party for whose exclusive benefit a term has been provided may renounce it without consent of the other party. In this case, the Court noted, Mr. Guay had not provided notice of resignation in order to assist him in a transition from one employer to another. Rather, he provided notice of resignation because he was required to do so and, when his current employer waived the notice period, he started his new position without delay.
The Court further explained that the end of the contract of employment is fixed from the moment the employee announces his resignation. The contract ends on the last day of the notice period because of the unilateral decision made by the employee. Waiver by the employer of the notice period does not change the legal consequences of the notice. The Court thus confirmed that a resignation does not become a termination of employment by virtue of the fact that the employer chooses to waive the notice period that the employee is required to provide. As stated in the previous case law, where an employer discharges an employee and the employee waives the reasonable notice which the employer must provide to him, the Court would not find that the discharge has transformed into a resignation. Therefore, where the employer waives the notice period, this similarly does not trigger the application of section 82 of the Act.
The Court acknowledged that the legislature may need to address the issue because providing adequate notice to an employer thus presents a risk to the employee (i.e., that the employer could waive the notice period and leave the employee without employment or compensation for the remainder of the notice period). However, the Court noted that an employer would be putting itself at risk if it conducted itself in such a manner, and would be abusing its rights, an act for which it could be held accountable.
From an employer’s perspective, this decision is a welcome one. Employers in Quebec may validly waive an employee’s notice of resignation when, for example, an employee is no longer dedicated to her work prior to her resignation, or where an employee is leaving to
work for a competitor and his work during the notice period could constitute a conflict of interest.
However, employers should be aware that, while similar reasoning could eventually be applied by Ontario courts, this decision does not reflect the current state of the law in Ontario, where different legislation applies, and which requires employers to pay out the greater of either the statutory minimum for termination of employment or the notice period, should the employer waive notice of resignation.
Employers with employees working in Ontario and Quebec should be informed of the Quebec Court of Appeal’s decision and this recent change in Quebec employment law. At this point in time, however, it is unclear whether this change in Quebec’s law will be a lasting one. An application for leave to appeal to the Supreme Court of Canada has been made with respect to this decision and, should the Supreme Court decide to hear the appeal, a decision by Canada’s highest court will offer employers, both in Quebec and Ontario, more certainty on this change to the law in Quebec, and what implications this might have in other provinces.
We will keep readers apprised of developments in this case.