Experts say that although recent cases of employers suing departed employees for breaking contracts early have been thrown out by the courts, Canadian employees shouldn’t take this as a go-ahead to resign without giving their bosses a proper heads up. Sunira Chaudhri, founding lawyer at Workly Law, an employment law firm based in Toronto. THE CANADIAN PRESS/HO-*MANDATORY CREDIT*
Quitting without giving proper notice could land you in legal trouble.
That’s what happened in late January, when two B.C. employers attempted to recoup thousands from their recently-departed employees after the workers quit their jobs without proper notice.
Luckily for those employees, neither employer’s lawsuit at the province’s small claims tribunal was successful and both cases were dismissed.
But employmentexperts say workers shouldn’t take this as a go-ahead to resign without giving their bosses a proper heads up.
“Generally speaking, it’s not financially worth it for an employer to pursue damages for breach of contract in the event of an early resignation, given how expensive it is to hire a lawyer and go to court,” said Sunira Chaudhri, founding lawyer at Workly Law, an employment law firm based in Toronto.
“Adding to the costs, it can also be pretty hard to establish a loss (stemming from) someone quitting with no notice … because in contract law, you need to show proof of having suffered damages in order to get compensation.”
The two recent B.C. cases are “perfect examples” of these hurdles for employers, Chaudhri added.
In the first, John Fleming Insurance Agency asked the tribunalfor $3,000 in compensation after Davik Mehta, an insurance broker, quit without notice in 2022. In the second case, a numbered B.C. company claimed $2,400 in damages after employee Wendy Reyes quit with two weeks’ notice instead of the required three, as per her contract.
However, the court ruled both employers didn’t provide enough evidence of the damages caused by the employees’ abrupt departures.
In Mehta’s case, tribunal member Christopher Rivers said the insurance agency could have produced evidence that clients had chosen not to do business with it because of his “sudden departure,” or records of lost revenue the employee would have brought in.
Loss of revenue due to an employee quitting is the most common basis for a wrongful resignation suit, said Mark Tector, a partner in the labour and employment group at Stewart McKelvey Lawyers in Halifax.
Additionally, he noted that evidence of extra onboarding costs – or having to pay other employees overtime – could also constitute a basis for compensation.
“If the employee in question had a very specific skill set that’s difficult to find in a short amount of time and the employer had to incur additional costs – like a recruiter, or paying someone else extra to work longer – that could be something an employer might sue for,” said Tector.
Though Tector agreed the costs of litigation might deter some companies from attempting such lawsuits, legislation in certain provinces provides an easier route through which employers can recoup their losses.
For instance, Section 73 of Nova Scotia’s Labour Standards Code provides that employees must give their employer a certain amount of notice upon resignation, usually between one and two weeks, depending on their length of employment.
“If an employee quits without the notice required by the legislation, they could bring a complaint … to the Labour Standards Division, and if they prove their case, could withhold an employees’ unpaid wages to compensate for any damages they suffered as a result of the early resignation,” he said.
Though employers must still provide proof of damages, Tector noted that the costs of filing a complaint with the province’s Labour Standards Division arecheaper than bringing a suit for breach of an employment contract. This means employers may be more inclined to do so in provinces where a complaint review is a possibility – though not every province with legislation regarding mandatory notice periods regulates complaints.
“My first thought would be … don’t quit without giving the proper notice or resignation under your contract,” said Tector.
“And before quitting, take a look at what your contract says, as well as the legislation in your province – because you could be at a bigger risk of liability depending on the ways employers can hold you accountable.”
Chaudhri echoed this advice, emphasizing that though Canadian courts don’t necessarily want to hamper employees’ job mobility, they want to strike a balance between employees’ work freedom and ensuring those same employees honour their obligations.
She also cautioned employees against relying on a constructive dismissal or “quitting with cause” claim when resigning without notice, where the worker alleges their employer created such a hostile work environment that their resignation wasn’t voluntary.
“It’s certainly tenuous to allege constructive dismissal even in the best of cases because the Supreme Court has laid out a high threshold to meet,” she said, “and will be especially hard to prove where an employee left their original job and immediately started a new one, because that suggests there’s maybe something else at play there.”
In the end, both Chaudhri and Tector recommended employees play it safe when it comes to quitting.
“Especially if you’re in a situation where your departure may have involved some kind of controversy, you really don’t want to leave it open to the employer to test these kinds of claims against you as a form of retaliation,” said Chaudhri.
“So leave with the right amount of notice – and if you can, maybe even offer a bit extra.”
– Pascale Malenfant is a law student and freelance writer based in Montreal.
This report by The Canadian Press was first published Feb. 21, 2024.
