Resignation regrets: Employee's failure to provide reasonable notice of departure costs him $56,116.11

When employers think of reasonable notice, they tend to be concerned with whether sufficient notice of dismissal is provided by the employer to the employee. However, an important subject that garners far less attention is what notice a departing employee must provide to the employer. 

The duty to provide reasonable notice of resignation is one implied by the common law. It has no equivalent in Ontario employment law legislation, such as the statutory notice employers are obliged to provide (at a minimum) when dismissing an employee. Regardless, whether through popular convention of television and media, or some other social norm, there exists a perception that a departing employee must give their 'two weeks' notice.' The question for employers is whether such notice is sufficient and, if not, what can they do about the problem?

One recent decision to consider wrongful resignation is Consbec Inc. v. Walker. The facts of this case centre on Walker, an individual hired in the late 1990s to grow Consbec's business in Western Canada. The hiring was done in a relatively informal fashion; there was no employment agreement or other written documents governing the relationship between the parties.

In the summer of 2002, Walker resigned from Consbec with immediate effect. No notice was given. At this point, Walker opened his own competing business and won several bids that were in direct competition with his former employer. In response, Consbec commenced legal proceedings against Walker claiming, among other things, breach of fiduciary duty and wrongful resignation. The Court concluded that Walker was not a fiduciary of Consbec and did not provide any remedy as against Walker's new competing venture.

In terms of wrongful resignation, however, relief was provided. The Court began by recalling that the purpose of employee notice is to "provide time for the employer to make arrangements to have the work that the departing employee looked after by others, or to find another employee." As with notice from an employer, employee notice is also variable, dependent upon details such a length of service and the employee's level of responsibility.

The Court had no problem in concluding that by giving no notice, Walker had breached his common law duty to Consbec. Walker attempted to argue that the company suffered no actual loss of earnings from his abrupt departure.

Nevertheless, the Court noted that for wrongful resignation, the test for damages considers loss of opportunity as a result of insufficient notice, not loss of earnings. Examining the facts, Consbec was deprived of the opportunity to retain a replacement employee. As a result of that loss, the Court awarded damages to the employer of roughly $11,000 for the cost of temporarily having an employee put in place to cover Walker's job. Another $44,000 was awarded in recognition of the costs Consbec accrued in relocating a permanent replacement from Ontario to British Columbia.

All told, the cost to Walker for wrongful resignation amounted to $56,116.11: a steep price to pay for simply failing to give proper notice. Consbec Inc. v. Walker is one of a recent spate of wrongful resignation cases. Another useful example, this time related to a contractual resignation provision, was covered in detail by Alison Bird in her summary of BlackBerry Ltd. v Marineau-Mes.

The takeaway from decisions such as Consbec and BlackBerry is that employers should not feel helpless when an employee up and leaves without any prior notice. Depending on the specific circumstances and the loss suffered, there may be legal recourse available to help stem the worst of the damage.

If you are considering resignation and want to ensure a smooth exit, contact us at 613-238-4430 or info@vwlawyers.ca.