In Canada, in the absence of just cause, an employer must give an employee notice or payment in lieu of notice if the employer wishes to terminate the employment relationship.
When an employer gives an employee notice of its intention to terminate the employment relationship, this is typically in the form of “working notice” i.e., the employee is required to work through the notice period.
In this post, I provide a brief overview of the legal requirements relating to working notice.
- The employer should ensure that the working notice is clear and unequivocal and that the notice is in writing. If the notice is not in writing, it would violate Section 63 of the Employment Standards Act (the “ESA“).
- If an employer permits an employee to work beyond the notice period, the notice is ineffective under Section 67(1)(b) of the ESA and the employee would be entitled to a new statutory termination notice period or pay in lieu.
- An employer must not alter the terms and conditions of the employee’s employment during the working notice period as it would amount to a constructive dismissal.
- During the working notice period, an employee must continue to perform all of his/her duties as he/she normally would. However, it is customary for an employer to permit an employee to take a reasonable amount of time off for the purpose of attending job interviews, etc.
- If an employee brings an action for wrongful dismissal during the working notice period he/she will have repudiated the employment agreement.
- If an employee resigns during the working notice period, the employer does not have to pay the employee for the balance remaining period.
- If an employer terminates an employee for just cause during the working notice period, the employee will not be successful in claiming damages for wrongful dismissal.
- Once an employer gives working notice, it cannot unilaterally amend or retract the notice. In Elderfield v. Aetna Life Insurance Co. of Canada [1996] B.C.J. No. 1817, the employer gave the employee notice which suggested that the employer would provide a severance package or provide alternative work. Because this notice was unspecific and equivocal, the employer subsequently tried to give proper, specific and unequivocal working notice. The employee refused to accept the subsequent notice and brought an action. The court held that the employee was entitled to bring a claim for damages and that an employer could not unilaterally re-elect to provide additional working notice.
- If the employer gives insufficient working notice, this would amount to a breach of the employment contract and the employee is entitled to sue for wrongful dismissal. The damages in this situation will be the reasonable notice period minus the working notice given: Giza v. Sechelt School Bus Services Ltd., 2012 BCCA 18.
- An employer can offer a terminated employee another position in mitigation of his/her damages: Evans v. Teamster Local Union No. 31, [2008] S.C.J. No. 20. If an employee refuses to accept the alternative position, the court could reduce the amount of damages that the employee would otherwise have received on the basis that the employee failed to mitigate his/her losses. In these kinds of situations, the question is whether, viewing the matter objectively, a reasonable person would have accepted the opportunity to mitigate his/her damages by accepting the job offered by the employer.
In a future post, I will discuss the concept of “garden leave” i.e., the employer gives the employee notice that his/her employment will be terminated but tells the employee to stay at home even though the employee is provided with full pay for the duration of the notice period.
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