The Enforceability of A Resignation – The Basic Concepts [video]

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Can you simply say “I quit” and walk out of your employment? Can your employer refuse to accept your resignation? Can your employer terminate your employment during the resignation notice period? This lecture provides guidance on the fundamental law in Canada relating resignations.

This lecture is taught by Amer Mushtaq, LL.B., M. Engineering , B.Sc. (Hons.), who is the Principal and Founder of Formative LLP.   Through his YouTube channel, YouCounsel, Amer shares practical advice from his years of legal experience to help anyone access justice and achieve their goals.  Subscribe today to learn more.

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Welcome everyone this is Amer Mushtaq ,from You Counsel. Often times we see a scene in the movies that an employee is upset with his boss and in a restaurant and he gets frustrated, he takes off his apron, throws it on the ground and says to his boss, “I quit this restaurant” and he leaves. Now, if that’s the way the employee has resigned in the real world, is that resignation notice acceptable? What is the law about the enforceability of that resignation notice? Because in the real world, that resignation notice may be improper and may not be enforceable. So, today’s lecture is discussing the resignation, the resignation notices, the resignation notice period, when is a resignation notice okay, and when it’s not.

We begin with our disclaimer that this course is not legal advice, so, if you have any specific questions you should contact a lawyer, or a paralegal, or contact The Law Society of Upper Canada for their referral.

We’ll discuss specific questions about resignation notice. First question is that what happens when a resignation is given in the heat of the moment? So, our example of the waiter storming out of the restaurant by saying I quit, is that a correct way to resign and is that acceptable, that’s our first question. Second question is, what if you provide the resignation notice and the employer does not accept it? Is that possible, is that allowed, and how does the law deal with that situation? And the third scenario, we’ll talk about is you provide a resignation notice to your employer, you are still working during the resignation notice period, and within that resignation notice period, the employer terminates your employment and what happens to your resignation notice in that circumstance?

So heat of the moment resignation, one example I gave you was the waiter walking out. I can give you another example, a real example of a client of mine, who was employed as an Executive Chef for a company for a long time and one morning he had this very intense argument with his boss which culminated in the employee, the Executive Chef saying to the boss I quit or I’m resigning, and he puts his office keys on the table and he simply walks out of the office and goes home. And then this happens on Friday, Friday morning, and then Monday morning when he had had some time to reflect upon it, he called his employer and says he’ll be at the office later in the morning and the employer says, “no we have accepted your resignation don’t bother coming into work”. So, what is the law with respect to that situation that a resignation that is given in the heat of the moment … how does the law consider that resignation?

So, the law about a resignation, or any resignation is that the resignation must be clear and unequivocal … it must be unambiguous. So, clear and unequivocal that is the requirement for a resignation to be valid. Now, in order to determine whether a resignation is clear and unequivocal, the court when it looks at it is looking at it objectively and to determine whether the intention to resign was truly there with respect to that employee. And the court is also looking at the conduct of the employee to confirm whether the conduct also indicates the intention to resign. So, let’s go back to my client’s case, in which Friday morning, he says I quit, he leaves the keys on the table, very clearly says that he is quitting and he walks out. So, all of that indicates a very clear intention of resigning. But what happens over the weekend is because he was the Executive Chef and there were some catering orders that need to be looked after and there were other issues at the restaurant that needed to be dealt with, his junior employees at the restaurant were still calling him and he was providing instructions to them in terms of various recipes and dealing with certain service providers. And he was doing that all along on the weekend through text messages and phone calls. And then Monday morning, he sends an e-mail to his boss saying that he is going to the doctor in the morning and will be back at the office later in the afternoon. And, so, all of those actions suggest that even though he had tendered his resignation in the heat of the moment, he never really wanted to follow through and he was actually working on the weekend dealing with employers issues and he indicated to the employer Monday morning that he was coming back to work.

So, in that situation, the law will consider that this was not a real intention on the part of the employee to resign, his conduct indicates that he was upset and his comments that were made were made in the heat of the moment, but did not objectively indicate an intention to resign. So, there are tons of cases like that in the court that have been decided, where the heat of the moment resignations and that’s the word that’s commonly used for those kind of resignations, are not acceptable unless there’s a very clear conduct by the employee indicating that he or she is going to continue with this resignation notice.

So, for instance in my client’s scenario, if he had gone home on Friday did not contact his employer for over a week which is generally considered sufficient time to have your emotions cooled down and objectively consider or rationally consider your actions, and if he still did not show up at work and did not deal with any of the employment issues then that resignation notice may be enforceable. So, heat of the moment resignations are generally not enforceable, as long as they are followed by or they are related to the conduct that also clearly indicates an intention to resign.

Second scenario in which the resignation notice is not acceptable by the employer. I mean, imagine if you are working for a Mafia and you go to your boss and say, “hey I quit”, how would your mafia boss take that resignation notice? We also see the examples of that in the movies. So, in the real world in the employment law situation, the response to your resignation notice may not be similar to the mafia boss, but the option to resign without giving sufficient notice may not be available to the employees in the real world as well.

So a few scenarios in which the employer generally may not accept your resignation notice. One scenario is that the employer may turn around and say that you’re not providing me with sufficient notice and I’m not accepting your resignation. So, going back to our example of the restaurant worker who walks out by throwing in the apron and says, “I quit” and leaves right away, the employer may turn around and say “I have 200 guest who are sitting and they needed to be served, and if you walk out now, I will lose significant business I am not accepting your resignation you need to complete your shift and then I will accept your resignation.” So, insufficient notice may be an acceptable reason where the employer may say that the resignation notice is not acceptable.

Another reason why a resignation notice may be declined by the employer, is that if you provide too much notice. So, for instance you go to the employer today and say “six months from now I am resigning and here is my notice but I’ll come and continue to work for the six months” and the employer may believe that six months is too long a time for you to serve for your resignation notice, one week or two weeks, may be sufficient and so, the employer may not accept your resignation notice because it’s too long.

Another scenario could be that your employment contract may have a specific resignation notice that you may have agreed to and it’s not uncommon to have a resignation notice provided in the employment contract … that may indicate a specific time period and if you do not provide a resignation notice for that time period the employer may not accept your resignation.

One example that comes to my mind with respect to this resignation notice and contract, we were negotiating a contract for a client of mine who was being hired as a C.E.O. of a mining company. And the employer put in a resignation notice of six months in that employment contract, and the discussion that my client and I had was, I indicated to him that if he at any point decides to resign his employment with this company and finds another employer based upon his resignation notice clause in the contract, he will have to tell the future employer that even though they are hiring him, he cannot start working for six months because that’s the time period that he has to serve as a resignation for with the existing employer. And our point was that it is unlikely that an employer will wait for you for six months to begin your employment. So, our goal was with respect to negotiating the contract to have a more reasonable resignation notice period in his contract which in his case was about a month, and we considered that to be sufficient for the future employer and for the existing employer. So, contractual resignation notice, you are bound to follow as long as they are not breaching any of the statutory laws.

So, generally, why does an employer need a resignation? Generally speaking, a resignation notice for a specific period. When you provide resignation notice, the employer needs to substitute you, find another employee who can take over your responsibilities. Now, if you are a waiter working in a restaurant, maybe an hour, or maybe a day, or maybe two days, or a few days may be sufficient for the employer to find replacements, if there are other waiters generally available in the market to do your job. But on the other hand, let’s say if you are a specialized astronaut who has the specific skill of landing spaceships on Mars and you walk into one fine morning to your employer and say “I quite, I’m leaving now or I’m giving you one week notice and I’m resigning” now that one week or immediate notice may not be sufficient time for the employer to find a replacement, another astronaut around the world who can land at Mars the way, the kind of skill that you have, right? So, the resignation notice the concept is saying what is the reasonable amount of time that the employer may need to replace you. So, it’s not very dissimilar to reasonable notice of termination … although generally speaking, based upon the market place and based upon the employment laws generally speaking two weeks notice is generally sufficient in the cases, but if there is a very, very, specific reason that your resignation notice should be higher then the court will find a higher resignation notice.

So, what are the remedies if you don’t provide a proper resignation notice? The employer can claim damages against you. So, if you were required to work, let’s say you resign and you walk out of your job and the employer says “you should have given me two weeks notice” but you walk out immediately and the employer now has to hire some someone at twice the rate that the employer was paying you to cover you for the two weeks that the employer believes should have been the resignation notice, then that extra amount that the employer has paid maybe the damages that the employer may come after you for. So, there is a remedy available to the employer, if the resignation notice is improper and the employer is able to demonstrate that to the court, that the resignation notice you have provided was not sufficient.

So, the lesson that you want to keep in mind from this, is that once you resign that resignation needs to be accepted by the employer and once it’s accepted then you’re fine, if it’s not accepted then there is a potential that there maybe a claim for damages against you.

Let’s go to the third scenario in which you provide your resignation notice and you are serving your resignation notice period. So, let’s say you provided a resignation notice period of three months and you show up to work and then within a week the employer decides to terminate you, then what happens to your resignation notice period? So, the answer is quite straightforward, that if you are working through your resignation notice period and the employer terminates your employment then the resignation, effectively, now becomes a termination. And depending upon the scenario that termination could be a with-cause termination or a without cause termination. And as you may know from our other lectures, is that a with-cause termination is when you have done something so bad then the employer needs to terminate you immediately without providing you with the balance of resignation notice money or any money for your reasonable notice. So, in this case, for instance, if you are provided resignation notice and then you stop showing up to work, or you start coming in late and not performing your duties, and starts swearing at other people and things like that, that may be a reason for the employer to claim that you are to be dismissed with cause.

The other scenario could be that the employer does not need you to work the resignation notice period that you provided and that was a reasonable resignation notice, perhaps because an employer found another employee to replace you immediately and then the employer may decide to terminate you and that termination is without cause. But because the resignation notice is now converted into a termination, now, you have all the rights and remedies that you may be entitled to for a without cause termination. So, if you are entitled to reasonable notice on termination, then you will get reasonable notice, or you have a claim for reasonable notice. Or, if there is a contractual right that you have in your employment contract on your terminations then you may be entitled to that. So the important part and this is a real scenario that I have experienced with one of my employees who had resigned from his employment, given three months notice and then during that three months the employer decided to terminate him and walk him out and then they refused to give him the balance of the money for the reason for the resignation notice period and then we had a claim against the employer in which we were able to get that money.

So, this is a scenario that’s possible, the lesson you want to keep in mind is that during the resignation notice period if the employer terminates your employment then that effectively becomes a termination and resignation is out of the door and you are entitled to all the rights and remedies that you may have with respect to that termination.

So, what you want to keep in mind is that in the real world the scenario for resignation is not what you see in the movies, you want to give a clear unambiguous resignation notice. If it’s given in the heat of the moment you still have an opportunity to retract it within a reasonable time, if you regret what you said and come back to work and that may be acceptable. And if the employer does not accept it you may have grounds to seek reasonable notice of termination based on common law. Similarly, you have to provide sufficient notice and a notice that’s reasonable and also if there is a specific notice that is provided in your employment contract, then you need to follow that.

Hopefully that gives you an understanding of resignation and you’re not in a situation where you are involved in any litigation, with respect to the impropriety of your resignation notice period. Thank you for watching.

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