Canadian Employment Law Today

January 29, 2020

Focuses on human resources law from a business perspective, featuring news and cases from the courts, in-depth articles on legal trends and insights from top employment lawyers across Canada.

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with Colin G. M. Gibson Ask an Expert HARRIS AND COMPANY VANCOUVER 2 | January 29 , 2020 Canadian HR Reporter, 2020 Have a question for our experts? Email jeffrey.smith@keymedia.com Answer: At common law is an implied term of the employment relationship (in the ab- sence of an enforceable contractual termi- nation clause) that an employee who is dis- missed without cause is entitled to receive reasonable notice of termination. Similarly, an employee also has an implied common law obligation to provide the employer with reasonable notice of resignation. The amount of resignation notice that will be considered reasonable depends on the circumstances of the case and is usually less than the notice the employer would need to give. The factors that are typically given the most weight in determining the resignation notice period are the employee's responsi- bilities, length of service, salary and the time it would reasonably take the employer to re- place the employee or adjust to its loss. Where an employee quits without giv- ing reasonable notice (or without giving the amount of notice that is required by an express clause in the parties' employment contract), the employee will be considered to have wrongfully resigned. In this situation, the employer will not be entitled to obtain an order requiring the employee to return to work, but it may be able to pursue an action for damages for wrongful resignation. Damages for wrongful resignation are assessed using the normal breach of con- tract standard; i.e., the employer is entitled to be put in the financial position it would have been in if the employee had given the required amount of resignation notice. It is important to understand, however, that an employer will only be able to collect dam- ages for wrongful resignation if it is able to show that it has suffered measurable losses arising from the fact that the employee did not give enough resignation notice. Expens- es or losses that arose from the resignation itself — and which the employer would have incurred even if reasonable notice had been given — will not be compensable. Because of this, wrongful resignation actions are rela- tively rare. The duty to mitigate applies in wrongful resignation claims, meaning that the em- ployer has an obligation to take reasonable steps to reduce its losses by replacing the de- parted employee. If the employer is able to replace the employee, it should be able to re- cover the amount it was required to pay the replacement over the period of reasonable notice, less the salary and other costs it saved by not having to pay the employee during the same period If the employee who resigned wrongfully was in a senior executive or specialized posi- tion, the resignation notice period is likely to be longer, and the employer may be able to establish damages based on lost profits aris- ing from the employee's failure to give prop- er notice. Also, if the employee resigned to join a competitor, the employer may be able to recover damages based on the losses it has suffered, or the profits the employee and/or the competitor has gained, as a result of the employee's unfair competitive activities dur- ing the resignation notice period. Colin Gibson is a partner with Harris and Company in Vancouver. He can be reached at (604) 891-2212 or cgibson@harrisco.com. Do employees need to give reasonable notice of resignation? Question: Is there common law reasonable notice for resignation? If an employee in an important role doesn't give much notice, can the employer pursue damages? Dismissal of probationary employees: What are the rules? Question: Can an employer truly terminate a probationary employee with no notice? Does it make a difference whether the probationary period is almost over or not? Answer: The short answer to both questions is — it depends. There are certain steps an employer needs to take to ensure that the dismissal of a probationary employee is han- dled properly. A probationary period is designed to give an employer the opportunity to determine whether the employee is suitable for em- ployment in its organization. If the employer reasonably determines that a probationary employee is unsuitable, it should be able to discharge the employee during or at the end of the probationary period, provided the ap- propriate steps have been followed. The law does not imply the existence of a probationary period, so it is important to en- sure that the existence, duration and terms and conditions of the probationary period are clearly spelled out in the applicable em- ployment contract, policy manual or collec- tive agreement. The standards an employer uses to mea- sure a probationer's suitability should be the same as those required of other employ- ees in the same position. Factors that may go into this evaluation include such things as work performance, skill, efficiency, at- titude, behaviour, compatibility with co- workers, attendance, willingness to accept supervision, compliance with the rules of the workplace and dependability. Defer- ence will be given to an employer's evalua- tion of these factors, provided it is done in a manner that is reasonable and is not arbi- trary, discriminatory or in bad faith. The termination of a probationary employ- ee should not come as a surprise. To put itself in the position where it will be able to dismiss a probationer for unsuitability during or at the end of the probationary period, an employer should put the necessary mechanisms in place to ensure its assessment will withstand scru- tiny. This will usually include such steps as: communicating the requirements of the posi- tion and the employer's expectations clearly and unambiguously; providing the necessary orientation and guidance; giving the employ- ee a reasonable opportunity to demonstrate their ability to meet the standards; bringing any difficulties or issues to the employee's at- tention and providing a reasonable chance to correct them; and informing the employee of the consequences if they don't correct the is- sues in a timely way. In most cases — and subject to the re- quirements of the employment contract or collective agreement — a probationary em- ployee may be terminated without notice or severance compensation, provided the steps described above have been taken. For non-union employees, it is impor- tant to keep in mind the requirements of the applicable employment standards leg- islation regarding termination without cause. In British Columbia, for example, s. 63 of the Employment Standards Act re- quires an employer to provide a minimum of one week's notice or compensation for length of service to an employee who is dis- missed without cause after three consecu- tive months of employment. This means that if the employment contract or policy manual contains a probationary period that is longer than three months, it should also specify that if the probationer is terminated without cause after the completion of the first three months of employment, they will receive at least the amount of notice or compensation that is required by the leg- islation. Otherwise, the entire termination clause could be struck down.

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