It is generally well understood that an employer ordinarily cannot fire you without providing you with either reasonable notice or severance pay. But, did you know the law applies a similar obligation on employees? As it turns out, there is a right way for an employee to resign from their job, and there is a wrong way.
In this blog post, we will discuss wrongful resignations – what they are, and what risk employees assume by making such wrongful resignations.
What are Wrongful Resignations?
Employees are required at common law, and often through their employment contracts, to give their employers reasonable notice of their intention to terminate employment. The rationale for this requirement is to provide the employer with a reasonable opportunity to find a replacement. In determining what makes notice of resignation “reasonable”, the courts will look to the responsibilities of the employee, their length of service, their salary, and the amount of time it could be expected for an employer to find a replacement or otherwise adapt to its loss. Where an employee does not provide their employer with this reasonable notice, the resignation is said to be “wrongful”.
However, employees do not have to give notice where they resign for cause. This is analogous to how employers can dismiss employees summarily for cause. Cause for resignation would include situations that would give rise to a constructive dismissal, such as a demotion or some other substantial and unilateral change to the terms of employment. An employment contract itself may contain a provision setting out what amounts to cause for resignation.
Employer Remedy for Wrongful Resignation
If there has been a wrongful resignation, the employer may sue their former employee. An action for wrongful resignation must have the following four components:
- The employee has resigned voluntarily (i.e., the employer did not give them an ultimatum along the lines of “quit or be fired”);
- No cause exists for the resignation;
- The employee did not provide their employer with reasonable notice of their resignation; and
- The employer suffered damages as a consequence of the wrongful resignation.
Employers suing for wrongful resignation will only be awarded damages which they can actually show they suffered as a consequence of the employee leaving the company. The employer is required to show they suffered costs, expenses or damages in excess of what they saved by no longer having to pay the employee’s salary. Simply being inconvenienced by the employee’s departure is not enough – there must have been an actual loss. The employer cannot seek an order from the courts compelling the employee to return to work. In the jurisprudence, wrongful resignation damages have included the profits the employer would have received had the employee worked during the required notice period.
Takeaway for Departing Employees
If you are an employee who is considering resigning from your job, you likely will find it difficult to give notice. It can be awkward and uncomfortable. But, it is important. You do not want to find yourself on the wrong end of a wrongful resignation lawsuit. Always review your employment contract to see if it provides a specific reasonable notice period. Otherwise, play it safe. Give your employer notice of your resignation and you can be sure you will be protected from such lawsuits later on.