When I teach the common law of dismissal and quitting, I always talk about the implied term in employment contracts that both the employer and the employee provide “reasonable notice” of termination of the contract. I point out that the duty to give notice applies to both parties, but that employers rarely sue their employees for quitting without notice, since employers usually don’t suffer any or much damage as a result of the employee quitting without notice.
But sometimes employers due seek to recover damages flowing from the lack of notice of a quit. An example was the recent Supreme Court of Canada decision in RBC Dominion Securities v. Merrill Lynch, where some RBC investment bankers quit without notice. The Court found that as a result of the sudden quit, RBC lost $40,000 per employee in lost profits that would have been earned had the employees given proper notice of 2.5 weeks. Note that the period of notice owed by an employee is often much less than that required by an employer.
In a recent case from Ontario called Gill v. A&D Precision, an employee quit without notice, but then sued the employer for wrongful dismissal, alleging he was in fact fired. The employer cross-claimed against the employee for quitting without notice. The Court ruled that in fact the employee had quit without notice. However, the Court rejected the employer’s claim for damages arising from that breach of contract by the employee. The employer had argued that the sudden quit has imposed costs on the employer in terms of “lost profit” due to delay in completing a project and recruitment costs to replace the employee.
The Court ruled that the employer would have suffered those costs even if the employee had given notice, since it was already behind in the project and it would have to incur the recruitment costs in any event:
I am unable to find, however, that A & D incurred the losses it contends because of Mr. Gill quitting as he did. Even if Mr. Gill had given notice, the company would have incurred these losses.
Therefore, the employer must prove that the damages are a result of the failure to give notice, and not a result of the employee quitting, or some other unrelated reason.
[Thanks to Daniel Lubin for letting me know about the A&D Precision case, who described the case in his own newspaper column]
