On July 25, 2014, the Supreme Court of Canada released its highly anticipated decision in Québec (Commission des normes du travail) v. Asphalte Desjardins inc. (“Asphalte Desjardins”) clarifying the obligations of Québec employers in the context of employee resignations.1 The Supreme Court has affirmed that, in cases where an employer receives a notice of termination from an employee, the employer cannot unilaterally terminate the contract without, in turn, providing the employee with notice or pay in lieu of notice.
Background of Asphalte Desjardins Case
Daniel Guay worked as a project manager for Asphalte Desjardins inc., a paving company. His position involved access to the company’s confidential information such as the content of the company’s tenders for municipal and provincial government contracts. Guay worked intermittently for Asphalte Desjardins from 1994 until 2008.
On Friday, February 15, 2008, Guay provided the employer with his letter of resignation. It stated that he intended to terminate his contract in three weeks’ time as he had been offered a higher salary by a competitor. He planned to remain with Asphalte Desjardins inc. until March 7, 2008 in order to finalize his work in certain files and to assist during this transitional period.
The following Monday, management attempted to persuade Guay to remain with the company as project manager. These efforts were not successful and the company chose to terminate Guay’s contract of employment the following day rather than waiting until March 7, 2008, the date of departure originally announced by Guay.
On Guay’s behalf, the Commission des normes du travail (the “Commission”) claimed an indemnity equivalent to the remainder of the three weeks’ notice stipulated by Guay in his letter of resignation.
Can a Québec Employer Renounce an Employee’s Notice of Resignation?
The Court of Québec’s decision followed the dominant jurisprudence on the subject. It held that the employer could not “renounce” the notice period provided by the employee.
Judge Massol distinguished between situations where an employee announces an intention to resign on a specific date, as Guay did, and one who resigns immediately and merely offers to continue working for a period of time. Therefore, the Court granted the indemnity sought by the Commission.
In the instant case, Guay had clearly stated that his resignation would take effect in three weeks’ time. The Court of Québec emphasized that in such cases the employer who wishes to terminate the contract prior to the employee’s stated departure date is required to provide notice or pay in lieu thereof.
The Court of Appeal disagreed. It held that the party that receives notice pursuant to article 2091 of the Civil Code of Québec (C.C.Q.), in this case the employer, may renounce it and that this renunciation does not engage the statutory indemnity set out in the Act respecting labour standards. The Court of Appeal based its reasoning on its understanding that the statutory notice periods set out in the Act respecting labour standards are not intended to protect an employee who has chosen to resign, but rather are designed to apply in situations where employment is terminated by the employer. The employer was therefore not required to pay an indemnity to Guay.
Supreme Court of Canada Upholds Prevailing Jurisprudence Regarding Notices of Resignation
The Supreme Court allowed the appeal and affirmed that the Commission was entitled to claim, on behalf of Guay, an indemnity in lieu of notice of termination equivalent to three weeks’ salary.
It held that a contract of employment for an indeterminate term does not immediately terminate when notice is given pursuant to article 2091 C.C.Q. The contractual relationship and the obligations of the parties thereto persist from the time at which notice is given to the date of termination set out in said notice. The employer is not entitled to “renounce” the notice period. Renunciation would, in effect, constitute a unilateral resiliation of the contract giving rise to the obligation to provide an indemnity in lieu of notice.
The Supreme Court also upheld the distinction made by the Court of Québec regarding an employee who resigns effective immediately and simply offers to work during the transition period. In such a case, if the employer agrees with the immediate termination of the contract of employment, the contract is terminated by agreement of the parties and notice is not required.
In Asphalte Desjardins, Guay had clearly informed his employer that he intended to terminate their contractual relationship at a certain date. In asking him to leave prior to that date, the employer terminated the contract unilaterally and therefore did not fulfill its notice obligations at law.
However, Justice Wagner emphasized that:
“the notice period chosen unilaterally by the employee cannot be “imposed” on the employer. An employer can deny an employee access to the workplace during the notice period, but must nonetheless pay his or her wages for that period, provided that the employee’s notice of termination was given in reasonable time. The employer can also choose to terminate the contract by giving notice of termination in reasonable time or by paying the corresponding indemnity in accordance with art. 2091 C.C.Q. and under ss. 82 and 83 of the Act respecting labour standards.”2
The Supreme Court’s decision did not make a distinction or finding regarding the confidential nature of the information that Guay would have access to throughout the notice period. Likewise, the fact that he had accepted a position with a competitor did not factor into the Court’s analysis.
It should be noted that the Court granted the three weeks’ notice claimed by the Commission and not the four weeks set out in article 82 of the Act respecting labour standards for an employee with five to ten years of uninterrupted service. The Court expressed that it was “preferable to leave the question whether the notice period provided for in s. 82…and the equivalent indemnity provided for in s.83 are matters of directive or protective public order for another occasion” given the scope of the Commission’s action in this case and the fact that this issue was not thoroughly debated in the lower courts.3
The Asphalte Desjardins Decision: Insights for Québec Employers
The Supreme Court’s decision has confirmed the leading trend in the jurisprudence in Québec regarding notice periods. Québec employers should take note of the following key insights from the decision:
- Employers are not permitted to renounce the notice period provided by an employee;
- Throughout the notice period, the employee is required to continue to comply with company policies and to perform his or her work-related obligations;
- In cases where the employer does not wish the employee to work during the notice period, it will be required to provide notice of termination or pay in lieu thereof;
- An employer does not need to provide notice where an employee resigns effective immediately and offers to continue working for a certain period; and
- Notice will not be required where an employee is terminated for cause.