Under Quebec's Act Respecting Labour Standards ("ALS") and Civil Code of Québec ("CCQ"), an employer who wishes to terminate an indefinite contract of employment without serious reason must provide notice or pay in lieu of notice.  Employees who wish to resign must also give their employer notice of resignation.

In Commission des normes du travail v. Asphalte Desjardins inc. (PDF), the Supreme Court of Canada held that when an employee gives notice of resignation, the employer cannot waive the notice period and terminate the contract of employment without providing notice or pay in lieu of notice.

The Facts

In this case, the employee, had worked for the Company since 1994 as a project manager. On February 15, 2008, the employee announced he was resigning in three weeks.  After unsuccessfully trying to convince the employee to stay, the Company terminated the employee effective February 19, 2008.

The employee filed a complaint with the Commission des normes du travail, claiming pay in lieu of notice equal to the three week notice period he had provided, even though under the ALS an employee with his service would have been entitled to additional notice.

Court of Québec Judgment

The Court of Québec ordered the Company to pay the employee three weeks of pay in lieu of notice,  the notice period he had given the Company.

Quebec Court Of Appeal Judgement

The Court of Appeal set aside the Court of Québec judgment holding that the Company had the right to waive the notice of termination of employment given by the employee and was not obligated to give the resigning employee notice or pay in lieu of notice.

Supreme Court of Canada Judgment

In a unanimous decision, the Supreme Court concluded that the Company could not waive the notice period provided by the employee without  providing the employee reasonable notice.

The Supreme Court stated that a contract of employment creates obligations for both the employer and the employee. As such, the obligation to give reasonable notice of termination, as provided for in the CCQ, applies to both employers and employees.

The Court stated that a contract of employment is not terminated immediately when one party gives notice, but only upon expiry of the notice period.  If an employer prevents an employee from working and refuses to pay him or her during the notice period provided by the employee, the employer is "terminating the contract" within the meaning of the ALS. The employer then has to pay the employee in lieu of notice.

The Supreme Court distinguished this case from one in which an employee resigns effective immediately, but offers to continue working to ease the transition.  In that case, if the employer refuses the employee's offer, the employer is not obligated to give the employee notice of termination because the contract has terminated by agreement between the parties.

Lessons For Employers

Following this case, when an employee gives notice, an employer may accept the employee's notice of resignation, in which case the contract of employment will terminate at the end of the notice period.  In that case, the employer may release the employee from the obligation to continue working, but must continue to  pay the employee.  An employer may also negotiate a new notice period with the employee, which can be longer or shorter, depending on the circumstances.  Lastly, the employer may refuse the employee's notice of termination (especially where the notice period the employee has given is too long in light of the circumstances) and provide a new notice period as long as the period provided complies with the relevant statute.

In this case, the Court noted that the Commission des normes du travail claimed only three weeks of pay in lieu of notice in this case.  As such, the Court limited its judgment to that amount.  The Court left for another day the question of whether the employee would have been entitled to the longer notice period provided by statue.