In an unusual case involving an employer seeking a declaration that a resignation clause in an employment contract is binding, the Ontario Superior Court of Justice in Blackberry Limited v. Marineau-Mes, 2014 ONSC 1790 declared that a senior executive is required to work out his resignation notice period.
A senior executive employee gave his employer, Blackberry, written notice of his resignation and advised that he would be departing in 2 months to join a competitor, Apple. The employee’s contract contained a resignation clause requiring at least 6 months of written notice upon resignation. As a result, the employer took the position that the clause in the contract was binding and the employee is required to provide the full length of notice. In response, the employee made a number of arguments in support of his position that he was not required to give 6 months’ notice of his resignation.
The employee argued that Blackberry had actually terminated his employment contrary to the Employment Standards Act, 2000 because he was not given adequate vacation pay and he was not in active service for the resignation notice period. The court disagreed as the employee continued to be paid even though his services were not active, and he was still required to be available, should his services be needed, during the notice period.
The court also rejected the argument that the 6 month notice requirement was tantamount to a non-compete clause. Even if the resignation clause could be considered a non-compete clause, non-compete clauses are valid and enforceable as long as they are not unreasonable. In this case, the court found that having the employee available for that length of time was necessary for the purposes of transition.
For employers, this is welcome news that a court will enforce a valid clause requiring an employee to give proper notice upon resignation. Moreover, an employer is not limited to damages if an employee breaches the notice requirements, but can have an employee work out that period. In certain cases, recovering damages from an employee’s failure to meet the obligations upon resignation may be sufficient. However, in situations involving skilled employees who are in high demand in the labour market, the resignation notice period is an important time for the employer to have departing employees assist with the transition.
This decision also supports the case for carefully drafted employment agreements. Employers should take the time to tailor the resignation clause to each individual employee as certain employees should be required to give more notice of resignation in order to ensure a smooth transition. Furthermore, employers are well-advised to consider what is reasonable in light of the circumstances and industry standards when determining the proper resignation notice period.
This blog is provided as information and a summary of workplace legal issues.
This information is not intended as legal advice.