An employee can be required to provide proper notice of resignation. Failure to do so could result in the employee paying damages to the employer.
In a recent decision, BlackBerry Limited v. Marineau-Mes, 2014 ONSC 1790, Blackberry sought a declaration that an Executive Vice-President (EVP) breached his employment agreement when he failed to provide Blackberry with six months’ notice of his resignation in accordance with his employment agreement. The employment agreement provided the following resignation clause:
Termination by You – You may resign from employment with BlackBerry at any time upon providing six (6) months prior written notice. You will continue to provide active service during the notice period, unless the requirement for active employment is expressly waived in whole or in part by BlackBerry.
The EVP made several unsuccessful arguments that the above resignation clause was unenforceable. Notably, the EVP challenged whether Blackberry could bring an application for a declaration that the contract was breached and whether the clause was analogous to a non-competition clause.
The Ontario Superior Court of Justice dismissed these arguments. The Court held that Blackberry was not seeking an injunction to restrict the EVP from working elsewhere. Rather, the Company was simply seeking a declaration that notice to terminate the employment agreement was required by the EVP, setting the grounds for an action in damages.
Further, the Court held that a notice of resignation clause was not analogous to a non-competition clause. But, the Court held, even if the notice of termination clause had some aspects of non-competition clause, it was reasonable and enforceable.
Given this recent decision, an employee should think carefully before walking away without proper notice to the employer. For employers, care should be taken to draft reasonable notice of resignation clauses, especially for senior executives and skilled employees where there is high demand in the labour market but a shortage of those skilled workers. Two weeks’ notice may not be enough to transition, recruit and protect your business from the suddenly departed employee.
Kellogg Company, Devry Smith Frank LLP, Hudson's Bay Company, and in the employment standards, labour and health & safety divisions at the Ontario Ministry of Labour. Read more