Wrongful Resignation

Wrongful Resignation – Understanding Wrongful Resignation

That’s enough. I’m walking out that door right now and never coming back.

The above thoughts have likely crossed the minds of many a frustrated employee. Indeed, in the moments when you’ve had it up to here with your job, there’s something very tempting and liberating about the thought of swift and unceremonious departure.

But take it from the experts at KCY at LAW’s employment law firm, you’d be well-advised to take a deep breath in these moments of anger before taking any rash actions.

What is a Wrongful Resignation?

If you haven’t heard of a wrongful resignation, don’t worry, you’re probably familiar with its sister concept: wrongful dismissal. When terminating an employee without cause, employers have a duty to provide reasonable notice or pay in lieu thereof. Failure to provide an employee with either leads to what is called a unlawful wrongful dismissal. A wrongful resignation is essentially the same thing as a wrongful dismissal, except that it is the employee who has failed to provide the employer with reasonable notice of their intention to quit their position.

The issue of wrongful resignation doesn’t come up that often since employers don’t usually suffer much loss, if any, for losing an employee without notice.

What is wrongful Resignation - KCY at LAW

Employee’s Reasonable Notice Obligations

Formally, there is no specific legal requirement under the Employment Standards Act or any other employment legislation for an employee to give two weeks or any other prescribed amount of notice of their intention to resign from their job. However, employees are required to give reasonable notice and it is also possible for them to have a contractual obligation to provide a certain amount of notice of their departure.

Even if an employee does not have a contractual obligation to give reasonable notice of their resignation, they may still be liable for damages should their unexpected departure cause a significant loss to their employer.

Wrongful Resignation or Not?

When deciding whether an employee’s departure was a wrongful resignation, the courts will consider what the reasonable notice should have been based on how long it would take the employer to find a replacement for the resigning employee. The employee’s position, length of service and the amount of time it would take to replace them will all be considered in this decision.

For example, it is much easier for a restaurant owner to find a replacement dishwasher than it would be for a tech company to replace a senior program developer who had been at the company for several years.

Determining Damages for Wrongful Resignation

Damages for Wrongful Resignation - KCY at LAWWhen determining the damages owed to an employer by an employee that has wrongfully resigned, the courts may consider:

  • Advertising costs for the vacant position
  • Placement agency fees
  • Overtime costs to other employees who must cover the resigned employee’s shifts or duties
  • Business losses

These damages would all be offset by the money a business saves by not having to pay the former employee during what would have been the reasonable notice period.

The Cost of Wrongful Resignation – Gagnon & Associates Inc. et. Al. v Jesso et. Al.

The costs to employees who wrongfully resign are well illustrated in the case of Gagnon & Associates Inc. et. Al. v Jesso et. Al..

Gagnon & Associates hired Mr. Jesso in 1996 for their shipping department. However, Mr. Jesso quickly worked his way into a sales role and by 2006 was the company’s top sales associate. Alone, Mr. Jesso accounted for 30% of Gagnon & Associates’ total sales. In 2006, while still employed with Gagnon & Associates, Mr. Jesso found employment with a competitor and tendered his resignation, effective immediately, to begin working for the other business.

Gagnon & Associates subsequently lost clients to this competitor and had a hard time finding an equally experienced sales associate. At trial, Gagnon & Associates argued that Mr. Jesso’s abrupt resignation did not give them adequate time to transition the position and had cost the company significant sales.

Mr. Jesso insisted he wasn’t a manager and didn’t have any fiduciary obligations to the company and therefore hadn’t owed any notice. Agreeing with Gagnon & Associates, the judge determined that reasonable notice would have been two months because of Mr. Jesso’s long tenure with the company and his invaluable sales expertise. Mr. Jesso was ordered to pay Gagnon & Associates $35,164.

Wrongful Resignation Takeaway for Employees

Before resigning without notice, employees – especially those in senior or specialized positions – should first consult with an employment lawyer to determine any obligations, contractual or otherwise, they may owe to their employer. KCY at LAW will make sure that you know your resignation rights and obligations to guarantee you a smooth and successful employment transition. Call us today on 905-639-0999 or contact us online to book your consultation.