What is an Employee’s Wrongful Resignation?
Sometimes, an employee is so upset or disinterested in their job that they decide to quickly up and leave. At other times, leaving a job is a momentous decision, often fueled by a desire for something better. But what happens when you resign and later realize it was not the right move? More importantly, what if there legal consequences that could arise where as an employee, you could you be facing a claim by your employer called “wrongful resignation”? In this employment law blog, we delve into the rarely discussed realm of employee obligations after quitting.
Defining a Wrongful Resignation
In common language, it is easy to assume that “resigning” simply means quitting your job or walking away. However, under certain circumstances, an employee’s departure might be deemed “wrongful,” meaning you violated your employment contract or legal obligations. Potential, this could result in financial repercussions for you as the employee. In some ways, it is the opposite of a wrongful dismissal by an employer who terminates an employee’s job without just cause or prior reasonable notice of termination, which the employee can then sue to negotiate or obtain a financial severance package.
So, When is a Resignation “Wrongful”?
This typically happens when an employee resigns without providing reasonable notice of resignation as outlined in your employment contract or implied by common law. Generally under Ontario employment law, there are two main scenarios where an employee could be held legally responsible for damages arising from a wrongful resignation:
- Breach of Contract: Did your employment contract stipulate a specific notice period before resigning? Failing to provide that contractual amount of resignation notice without a valid reason that an employer accepts (such as health issues or workplace harassment) can be considered a breach of your employment contract, potentially resulting in an employer bringing a claim of wrongful dismissal seeking damages for their inconvenience and expenses incurred due to your abrupt departure.
- Fiduciary Duty: While often associated with high-ranking executives, such as a Chief Executive Officer, a “fiduciary duty” to the company can exist depending on an employee’s specific position and responsibilities. This essentially means acting in the employer’s best interests. In that context, some employers may be able to claim that an employee who resigns without reasonable notice, especially amidst ongoing critical projects or confidential information, might be deemed a breach of this duty, leading to potential legal action.
That said, the legal concept of wrongful resignation is relatively uncharted and will vary based on specific circumstances, such as the employee’s job title and responsibilities, employment contract, and nature and operations of the company. Therefore, if you are an employee or employer concerned about the potential consequences of departure or end of the employment relationship, it is important to seek specific legal advice to understand your rights and options.
What is an Employee’s Reasonable Notice of Resignation?
If the employer and employee have not previously agreed upon the proper amount of an employee’s resignation period in an employment contract, the amount is determined under common law. As a result, there is no hard-and-fast rule (such as 2-week resignation period that most employees commonly believe), but the answer is based on calculation consider the following factors:
- Length of service: Longer tenure usually translates to longer notice periods (as in months, not weeks).
- Position and job responsibilities: Managerial roles typically require more extended notice periods due to the potential disruption caused by their absence.
- Industry standards: Certain industries might have established norms for notice periods.
What Happens if I Resign Without Proper Notice?
While not a common occurrence, employers can sue you for damages incurred due to your abrupt departure. These damages might include:
- Recruitment costs: Finding and hiring your replacement can be expensive, and the employer might seek to recoup those costs from you.
- Lost productivity: The gap between your departure and finding a new employee can lead to lost revenue or productivity, which the employer might try to recover.
- Training costs: If you were working on a critical project requiring specialized skills, the employer might seek compensation for the cost of training your replacement.
Strategies to Minimize Risk of Employee’s Wrongful Resignation
Here are some key considerations to avoid legal trouble when leaving a job:
- Know Your Employee Contract: Read your employment contract thoroughly to understand any notice periods, confidentiality clauses, or other obligations related to an employee’s resignation.
- Communicate Properly: It is generally best for employees not to simply disappear or walk away from their jobs without explanation. If possible, employees should speak with their manager or boss, and better yet, to provide written notice of the intention to resign well within the stipulated timeframe (or a reasonable period if none is specified in the employment contract). In these situations, employees have the option to provide reasons for the departure and offer to assist the company to ensure a smooth and professional transition.
- Respect Your Employee Duties: If you hold a position with fiduciary responsibility, ensure your departure does not cause undue harm to the company’s operations. Assist with ongoing projects, share knowledge with colleagues, and ensure confidential information is properly handled.
- Seek Legal Guidance: Unsure about your obligations or potential consequences? Consulting a top employment lawyer can provide clarity and protect your interests.
If you are an employee who believes you have a good reason to resign from your job but want to ensure a smooth and proper transition to avoid a wrongful resignation claim from your employer due to workplace harassment or hostility, or if you are an employer who believes your employee abruptly left in a wrongful resignation, or are experiencing other workplace, please call an experienced Ontario employment lawyer to discuss your options and next steps on how to deal with a wrongful dismissal. As an employment law firm in Toronto, Bune Law has reviewed and negotiated improvements to many severance packages. You will review and get guidance on your severance package before you agree to sign any termination documents, and help ensure that your severance package is fair and reasonable.