Friday, 22 June 2012

I quit! You sue?

There are several ways to become “suddenly unemployed;” one of the ways not frequently canvassed in the employment law realm is that of voluntarily resignation. Although many are familiar with the concept of “wrongful dismissal,” the concept of “wrongful resignation” is much less frequently considered.

The first thing to observe with respect to resignation is that nowhere within the Ontario Employment Standards Act, 2000 will one find the legal requirement for an employee to provide two weeks’ notice of resignation. In fact, the word “resignation” barley appears within that law. This fact may lead some to believe that there is no duty to provide any notice of resignation; like many assumptions about the law, that belief may be incorrect.

The first thing to appreciate with respect to this issue of resignation is that the extent of one’s responsibility on resignation is a function of a number of factors, not the least of which being whether or not one is a “fiduciary” of the organization from which he is resigning. Whether or not one is a “fiduciary” is a complex question that can only be taken on a thorough analysis of the underlying facts. A discussion of that point is beyond the scope of this blog post.

For the sake of this post, let’s presume that the court finds that the departing employee is a fiduciary, as happened in the case of GasTOPS v. Forsyth.

The trial decision of GasTOPS, reasons for decision at 2009 CanLII 66153 (Ont. S.C.J.), is epic. Few books are as long as Justice Granger’s reasons for decision, which, according to the Court of Appeal for Ontario, whose much shorter reasons for decision can be found at 2012 ONCA 134, measures an astonishing 668 pages!

However, what Justice Granger’s reasons for decision provide is a textbook approach to the issue of a departing fiduciaries duties, one of which is the requirement to resign on appropriate notice.

As Justice Granger observed at paragraph 90 of his reasons for decision:

Failure of an employee to provide adequate notice will entitle the employer to an award of damages. Generally, reasonable notice is meant to give the employer time to hire and train a replacement. In determining the time required to hire and train a new employee, one must look at the nature of the employee’s position and the area of work that the employer was competing in.

In the end Justice Granger found that the four top employees of GasTOPS - who had essentially left their employer without any ability to carry on business - owed their employer between 10 and 12 months of notice of resignation.

In its reasons for decision, the Court of Appeal for Ontario declined to comment on the reasonableness of Justice Granger’s decision, although a reading of same would certainly leave one with the impression that the Court of Appeal found such a finding suspect.

Takeaways for those with Labour Pains

The takeaway for this post however, is that if one is an employee, especially one in the higher ranks of an organization, it is likely prudent to solicit specialized legal advice before resigning.

Contact Me

To reach the author of this blog, Sean Bawden, email sbawden@kellysantini.com or call 613.238.6321 x260.

Sean P. Bawden is a partner in Kelly Santini LLP, located in Ottawa, Ontario, Canada. He practices in the areas of employment law and civil litigation. He has also taught Trial Advocacy for Paralegals and Small Claims Court Practice at Algonquin College in Ottawa.

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As always, everyone’s situation is different. The above is not intended to be legal advice for any particular situation. It is always prudent to seek professional legal advice before making any decisions with respect to your own case.

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