Canadian Employment Law Today

Canadian HR Reporter, 2019 4 CASE IN POINT: EMPLOYMENT STANDARDS The quandary of quick quits When employees don't provide adequate or reasonable notice of resignation, do employers have any recourse for any negative effects? BY PETER SPIRO I t is conventional wisdom that an em- ployee should give about two to four weeks' notice when resigning, rather than just suddenly walking off the job and not showing up the next day. An em- ployee who acts in an inconsiderate man- ner cannot expect to get a good reference or be re-hired in future by that employer. is clear, practical reason for giving no- tice does not have a direct counterpart in legal obligations. Ontario's Employment Standards Act (ESA), for example, does not impose any obligation on employees to give notice. In contrast, it does impose an obliga - tion on employers to give notice to employ- ees prior to terminating them without cause. In fact, the ESA provides protection to employees when an employer tries to retali- ate because they quit without giving notice. e employer has an easy means of retalia- tion because wages are typically paid a week or two after the work is done. An employer may be tempted to refuse to pay for the last week or two of work to retaliate for the lack of notice, but this is not allowed. No withholding of pay Two recent Ontario Labour Relations Board rulings have held that it is forbidden to withhold pay even when the employee has signed a document agreeing to a de - duction for quitting on short notice. In one case — Rainbow Concrete Indus- tries Limited v. Kavan Cheff-Burns — a per- son was hired to be a cement truck driver. He received some specialized training and his contract stipulated that there would be a $1,500 deduction from his wages to com - pensate for the training if he quit after less than six months on the job. He did quit af- ter a short time and the employer withheld his last pay. e board ruled that this was illegal and ordered that his pay be restored, noting that employees are entitled to leave their employment with notice "at any time." e board found that the money de - ducted from the employee's last pay was intended to be "a disincentive or means of penalizing" the employee for leaving within six months of his hiring. "It is an inappropriate restraint on an employee's right to leave his or her employ - ment and does not gain legitimacy just be- cause an employer attempts to characterize it as a section 13 deduction on the basis of training," said the board. "e board will not give effect to an arrangement whereby an employee must either remain employed for a set amount of time or face economic repercussions." A case this year — Elemental Data Col - lection Inc. v. Promesse Bama — involved an employee of a market research firm. e employee had agreed in writing that there would be a financial penalty if he quit with - out giving two weeks' notice. e board again ruled that the penalty that the employ- er attempted to impose was unenforceable. In Elemental Data Collection, the board found that a "pre-estimate" of damages wasn't enough to support a pay deduction. Actual damages could possibly be recov - ered with a deduction under the ESA, but an advance agreement of such a deduction was essentially a "penalty for failing to give notice" of resignation to the employer. e board found that employees quitting without proper notice was a risk of doing business that couldn't be passed on to employees. e board also found that a deduction from an employee's final paycheque is more likely to be significant for the employee than the potential damages to the employer from a quick resignation. "Employers have control over an em - ployee's wages but should not derive an un- due advantage from [pay deductions]," the board said. As observed in Elemental Data Collec- tion, an employee could in principle be liable for damages at common law to the employer if their resignation without suf- ficient notice has an adverse impact on the employer's business. at is more likely to be the case with management or key re- search employees. It becomes an issue particularly when those employees are also accused of violat- ing their fiduciary duties by taking trade secrets or setting up competing businesses (such as in the Ontario Court of Appeal de- cision of GasTOPS Ltd. v. Forsyth). Unless there are such aggravating factors, it would not be practical for the employer to sue for the small amount of damages attributable to the brief notice period to which it is en - titled at common law. Obligations of independent contractors An increasing number of people now work as independent contractors rather than employees. Sometimes, they have less free- dom than an employee to quit on short notice. Independent contractors have the freedom to turn down new work if they are too busy. However, once having agreed to take on a piece of work, the contractor is liable for breach of contract if they quit without completing the job. A contractor The ESA provides protection to employees when an employer tries to retaliate because they quit without giving notice A CENTRAL element of employment law dealing with termination of employment dictates that employers must provide reasonable notice of dismissal, based on various factors. But what about the flip side? When employees quit their jobs, it's generally considered appropriate to provide two weeks' notice, but quitting workers don't always do that. And if the employee holds an important position and is difficult to replace, short notice could cause significant pain for the employer. BACKGROUND Employment law blog Canadian Employment Law Today invites you to check out its employment law blog, where editor Jeffrey R. Smith discusses recent cases and developments in employment law. The blog features topics such as work refusals, employees who quit and change their mind, and termination agreements. You can view the blog at www.employmentlawtoday.com.

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