COVID-19 has changed the landscape of employment for many industries and has led to an increase in employees choosing to voluntarily leave their jobs. Commonly referred to as “The Great Resignation”, this trend is influenced by a number of factors. The need for social distancing and pandemic-related isolation has given rise to an increase in remote work opportunities. Rather than return to an office setting, some employees choose to resign and pursue jobs that offer more flexible working arrangements.
The pandemic has also led to wage stagnation and an increased cost of living in Ontario. With real estate prices on the rise, employees may choose temporary unemployment in order to freely pursue positions that offer a higher salary or wage scale. These changes have led many to reconsider the employer-employee relationship in the midst of The Great Resignation.
Regardless of COVID-19-related layoffs and the need to reduce staffing in many industries, employees take steps to ensure their resignation does not leave them vulnerable to legal action from their employer. This includes the requirement for employees to provide reasonable notice of their resignation. Unlike terminations by an employer, the minimum amount of reasonable notice is not set out in legislation.
In the case of GasTOPS Ltd. v. Forsyth et al., the Ontario Superior Court of Justice noted that the purpose of requiring an employee to provide reasonable notice is to give the employer time to find and train the employee’s replacement. Some factors that influence the amount of reasonable notice of resignation include:
- The nature of the employee’s work;
- The length of their employment;
- Their responsibilities and level of specialization;
- The employee’s salary;
- The amount of time that may be reasonably expected to be required to find a replacement;
- The terms of the employment contract.
Employees who fail to provide a reasonable amount of notice may be liable for damages for wrongful resignation.
As noted by the court in the GasTOPS case, “all employees owe their employer a general duty of good faith and fidelity”. However, some employees owe additional duties to their employer after resignation and can face substantial damages for failing to act accordingly. Examples of these duties, many of which were present in the GasTOPS case, include:
- An employee’s fiduciary duty, which is an elevated level of trust within the employer-employee obligation and may be found where the employee has some level of power or discretion over their employer’s business. Fiduciaries may also take care to avoid usurping a business opportunity from their previous employer.
- The duty of non-solicitation, which prevents employees from soliciting their former employer’s customers or clients and may be governed by a non-solicitation clause in the employment contract.
- The duty to refrain from the misappropriation of trade secrets or use of confidential business information gained by the employee through their previous employment, to their previous employer’s detriment.
Whether these duties apply depends on the nature and circumstances of the particular employee and position in each case. Employees who are found to have owed and breached these duties can face legal action from their employer. They may face substantial monetary damages and injunctions that restrict their post-employment conduct.
It is important to note that in the past, many employees were routinely bound by non-competition clauses that limited their ability to work for a competitor within the same industry for a specific length of time. Employees may also have been subject to geographic restrictions that prevented them from working within a set distance from their previous employer. However, for employees that fall under the Employment Standards Act, most non-competition clauses became prohibited through the passing of the Working for Workers Act in late 2021.
Employers must also ensure that their staffing decisions do not leave them vulnerable to legal action by resigned employees. One such issue, which was discussed in our previous blog, is that of temporary layoffs and constructive dismissal claims.
To date, the case law considering employee resignations after pandemic-related layoffs has led to conflicting findings from the courts. However, it is evident that in some situations, an employer may be found to have constructively dismissed an employee even if the initial layoff was intended to address COVID-19-related business interruptions.
The nature of employment in Canada continues to change rapidly as The Great Resignation gains momentum. Both employees and employers should ensure their rights and obligations are properly understood and reflected in any contractual agreements to mitigate the risk of liability post-resignation.
The experienced employment lawyers at Grosman Gale Fletcher Hopkins LLP advise employers and employees on their rights at any point of the employment relationship, from hiring to termination or resignation. We provide focused legal solutions and guidance in a variety of matters, including wrongful dismissal, severance packages, and workplace conflict. To find out how we can help with your employment matter, conduct us online or by phone at 416-364-9599 to schedule a consultation.
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