Can an Employer Waive a Prior Notice of Termination of Employment Given by an Employee?

The Court of Appeal has just rendered a decision¹ that changes the ground rules where an employer receives a prior notice of termination of employment from an employee who has decided to resign.

While either party to an employment contract with an indefinite term may terminate the contract at any time, subject to the rights afforded by the Labour Standards Act regarding the contestation of a dismissal without good and sufficient cause or a dismissal constituting a reprisal, no such rights were involved in this case. The case law concerning prior notices allows parties to determine the reasonable amount of time that should be given to the party who receives the notice in order to adequately manage the consequences of the termination of employment.

Facts

The facts in this matter are representative of the classic case where an employee, in this case a project manager, leaves his or her employment in order to work for a competitor offering more money. In submitting his letter of resignation to the employer on February 15, 2008, the employee in question indicated that his last day of work would be March 7, 2008. Without waiting for that date to arrive, the employer put an end to their relationship on February 19, 2008. The labour standards commission then intervened on his behalf to claim the unpaid salary corresponding to the remainder of the prior-notice period.

Decision of the Court of Québec

The judge sided with the labour standards commission and ordered the employer to pay its former employee $6,518.99, which was the amount corresponding to the salary that would otherwise have been owed him had he not been dismissed prior to the end of the prior-notice period.

Decision of the Court of Appeal

Justice Marie-France Bich stated, on behalf of the majority, that an employer can waive the benefit of a prior notice given by an employee. The Court’s reasoning was based on several grounds.

Justice Bich first of all referred to the case law and doctrinal writing, which unanimously conclude that the prior notice is for the sole benefit of the party that receives it, as it allows the employer, the recipient in this case, to mitigate the inconvenience resulting from the resignation of an employee.

Secondly, the Court refused to accept that a prior notice is synallagmatic in nature and binds the receiving party, in this case the employer, as the latter at no time consented to the prior-notice period proffered by the resigning employee. Thirdly, Justice Bich pointed out that the salary paid by the employer in respect of the prior-notice period is merely accessory to the notice period itself. Accordingly, the employment contract terminates when the employer waives the notice period proffered by the employee, and as of the time of that waiver, the employer is no longer bound to remunerate the employee since, as the Court points out, the prior notice in such a situation is a legal mechanism that operates to the sole benefit of the employer who is the beneficiary thereof.

Finally, the Court decided not to expand the social protection afforded by Article 2092 of the Civil Code of Québec. In the Court’s view, the essential purpose of that provision is to protect an employee whose employment has been terminated from pressure that the employer might otherwise exert upon him or her to leave without the benefit of the prior notice period or the compensation in lieu thereof to which he or she is entitled. Article 2092 does not however apply in the reverse situation where the employee resigns and the employer is the beneficiary of the notice. In the latter case, the Court will refuse to perceive the employer as being in a vulnerable position, which is why the employer can waive the benefit of the notice.

Justice Bich went on to state that by acting as it did, the employer was not inversing the parties’ roles to become the one terminating the employment contract. On the one hand, the Court noted that the employee’s fate was sealed when he tendered his resignation and that the period stipulated in the notice merely postponed the effect of his resignation. It is thus false to maintain that waiving the notice period can have any effect whatsoever on the identity of the party that initiated the termination of the employment relationship. On the other hand, the Court ruled that section 82 of the Labour Standards Act only protects the employee where termination is initiated by the employer, not when it is initiated by the employee. Alternatively, if resignations were covered by that section, the resigning employee would be obliged to respect the seniority-dependent notice periods specified in the statute.

In light of the Court’s observations in this case, situations of this kind seem to have been dealt with for good.

However, the Court did open the door to amendments of the governing legislation, and it proposed a recourse based on abuse of right in cases where an employee resigns in order to retire or become an informal caregiver by giving a prior notice of several months that would not be respected by his or her employer. It should also be noted that the dissenting judge, Justice Benoît Pelletier, issued well-documented reasons that run counter to those of the majority.