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Date:
2012.02.09

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Employment Litigation
Wrongful Dismissal

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THE EMPLOYERS' EDGE

Employees Cannot Quit in the Face of Inadequate Working Notice says BC Court of Appeal

In the absence of legal just cause for dismissal, or a written employment agreement with a specific termination provision, implied in every contract of employment is a term that the employment relationship can only be terminated with reasonable notice.  The failure to provide reasonable notice is a breach of contract, resulting in a cause of action for wrongful dismissal.

A recent decision of the BC Court of Appeal, in Giza v. Sechelt School Bus Service Ltd, dealt with two (2) interesting issues where an employer provides working notice to an employee that is inadequate in terms of lawful reasonable notice, and the employee quits in response.  Specifically, the BC Court of Appeal addressed the following questions:

  1. If an employer provides inadequate working notice of termination, does that automatically give rise to an action for “constructive dismissal”  - a unilateral and fundamental change to the employment relationship - where the employee is entitled to resign and then sues for wrongful dismissal; and
  2. If employees are required to work during an inadequate notice period provided by the employer, does the employee lose the right to sue for wrongful dismissal if he quits before the notice period expires?
  3.  

    According to the BC Court of Appeal, the answer is “no” to both questions.

    The key facts of the Giza case were that Mr. Giza’s employer elected to dismiss him, after five (5) years of service, by providing him with five (5) weeks of working notice.  Upon receiving his termination notice, Mr. Giza left work permanently.

    There was no dispute that the amount of notice given to Mr. Giza was inadequate given his age (62) and 5 years of service.

    The BC Court of Appeal found that the provision of inadequate notice, though a breach of contract, did not, in its own right, give rise to a constructive dismissal entitling Giza to quit his employment and sue for wrongful dismissal.  The failure to provide reasonable notice was not a fundamental change that terminated the contract of employment.  Other changes to the employment relationship, or serious misconduct, would have been required to constitute a constructive dismissal. As such, Giza was still obliged to work during the notice period provided to him and, if he desired, sue for wrongful dismissal at the end of the notice period once the employment relationship in fact ended.  In the circumstances, Giza simply quit his employment.

    Despite the resignation, Giza did not lose his right to sue for wrongful dismissal.  The court held that his cause of action for wrongful dismissal arose before he resigned and the instant the employer provided inadequate notice to him.  Nevertheless, there were consequences tied to his refusal to working during the five (5) week notice period.

    What the Court did was award Giza six (6) months of pay in lieu of notice due to his wrongful dismissal, but deducted five (5) weeks from the award because he could have and should have worked during this period, but for his resignation, without cause.

    The Giza decision is an interesting one that should prove helpful to employers in Ontario that prefer to terminate employment by providing working notice, however, it is important for employers to understand their legal obligations when providing working notice to employees in order to maximize value and reduce liability.  Working notice should be provided in writing, with a specific termination date and should be structured so that there are no changes to the employee’s terms and conditions of employment during the working notice period.  Additionally, if employees are provided a reasonable opportunity to search for new employment during the notice period this increases the employee’s chances of obtaining a new position before the working notice period expires which can significantly reduce or eliminate any further obligations owed by the employer, even where the working notice was inadequate.

    The lawyers at CCP can assist employers in assessing whether working notice is appropriate and in creating flexible termination arrangements to reduce employer liability.

    Please Note: This blog has been prepared as an informational service for our clients and other interested parties. It is not intended to constitute legal advice, a complete statement of the law or opinion on any subject. Although we endeavour to ensure the accuracy of the content, no one should act upon the information provided without a thorough examination of the law after the facts of a specific situation are fully considered.

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