The Supreme Court Rules on the Employer’s Obligations When an Employee Gives Notice of Termination

On July 25, 2014, the Supreme Court of Canada overturned the judgment of the Quebec Court of Appeal in Asphalte Desjardins Inc. and Commission des normes du travail (Commission). In this case, the employee in question had been working for his employer since 1994. On Friday, February 15, 2008, he gave his employer a notice of resignation in which he announced that he intended to terminate his contract of employment as of March 7, 2008, that is, three weeks later. On Monday, February 18, the employer decided to terminate the contract of employment the very next day, i.e., on February 19, 2008, rather than on March 7, 2008.

The Commission claimed, on behalf of the employee (who, in accordance with the Act Respecting Labour Standards (ALS) was entitled to 8 weeks' notice considering his years of service), an indemnity equivalent to three weeks' notice, consistent with the notice of termination the employee had given in his letter of resignation, as well as the monetary value of the annual leave, in the same proportion. The Court of Québec found in the Commission's favour, but the Court of Appeal ruled against it.

This appeal raises the issue of the interplay of the provisions of the Civil Code of Québec (C.C.Q.) and the ALS relating to the effect of the notice of termination. The Supreme Court has confirmed that a contract of employment is not automatically terminated upon receipt of a notice of termination; on the contrary, the contractual relationship continues until the date set out in the notice of termination given by the employee or the employer. As a result, an employer who receives from an employee the notice of termination provided for in Article 2091 C.C.Q. cannot unilaterally terminate the contract of employment for an indeterminate term without fulfilling his own obligations regarding termination of employment. If the employer refuses to allow the employee to continue working during the notice period, he is deemed to terminate the contract within the meaning of section 82 ALS and is liable for payment of an indemnity in lieu of notice.

In conclusion, once notified of the date on which an employee wishes to leave his employment, an employer who objects to the employee continuing to work during the notice period may either 1) in turn give notice of termination or pay an indemnity in lieu of notice in accordance with Article 2091 C.C.Q. and sections 82 and 83 ALS, or 2) ask the employee not to return to work, while continuing to pay him during the notice period. The Supreme Court has drawn a distinction between the situation in the case at bar and the case where an employee notifies his employer that he intends to resign immediately, but offers nevertheless to stay on for a certain period of time. In that case, if the employer indeed wants the employee to leave immediately, there is a meeting of minds, and notice of termination is unnecessary, given that a contract for an indeterminate term may be terminated by agreement between the parties.