When picking a notice period is like a game of chicken
The BC Court of Appeal says: Quit when given inadequate working notice of termination and still sue for wrongful dismissal;
Part time bus driver employed for 5 years is provided written notice of termination of 5 weeks.
Bus driver leaves the day he was provided working notice and refused to work out his notice.
Bus driver sues for wrongful dismissal.
Company says bus driver quit and has no cause of action.
The BC Court of Appeal says:
The bus driver can still sue because the insufficient notice constituted a breach of contract by the employer creating a cause of action for wrongful dismissal. Even though the bus driver’s failure to work the notice itself constituted repudiation bringing employment to an end, the bus driver’s repudiation did not take away his cause of action for damages for being provided insufficient notice. The driver was entitled to damages for the difference between the working notice period that the employer had offered and what the Court determined was his reasonable notice period.
Its noteworthy that the Court’s theory is not based on inadequate notice constituting constructive dismissal. In fact, the Court found that the employer had not constructively dismissed the bus driver by providing inadequate notice. Rather, the Court reasoned: “although [the bus driver's] repudiation ends the ongoing rights and obligations of parties under a contract, it does not affect rights and obligations that have accrued. In the present case, the [bus driver's] right to damages in lieu of reasonable notice had accrued when he was given inadequate notice. His repudiation did not take away that right and it did not take away the right of the [employer] to the [bus driver's] services during the period of notice given.” Consequently, the driver was entitled to damages for the difference between the working notice period that the employer had offered and what the Court determined was his reasonable notice period.
Previous caselaw in B.C. had established that when an employer gives working notice of termination, the employer has the right to the services of the employee, meaning that the employee must remain ready and willing to carry out the contract of services until the end of the notice period. The BC Court of Appeal has departed from that view and said that although the employee’s early departure was improper, it only reduced the amount of damages they could recover rather than depriving them of the right to sue the employer at all.
Determining an employee’s reasonable notice period is not an exact science. Judges exercise discretion in assessing a notice period and their assessment is often influenced by the job market and other factors that an employer cannot predict with any great certainty at the time of termination. The employer knows the range in which the employee’s notice period is likely to fall, but the exact notice period will be determined many months – sometimes years – later by the court. According to the B.C. Court of Appeal’s approach, if an employer is off on notice by a week, the employer can be deprived of the benefits of working notice. It’s a bit of a game of chicken. This places employers in a difficult position in the event that they need the employee to work through all or part of their notice period.
While most employees will choose not to give up the financial benefit of notice, termination is an emotional event and decisions are not always made rationally. This can place an employer in a tough spot. Imagine a situation where an employer terminates the employment of a highly skilled long term employee and provides a combination of one month’s working notice and a lump sum payment in lieu of the remaining notice period. From the employer’s perspective, the month of working notice is critical to structure a transition period prior to the employee’s departure. An angry employee might be all too willing to give up 1 month of a lengthy notice entitlement by quiting immediately out of anger, frustration or embarrassment. The employer, as a result, is deprived of the ability to effectively transition the terminated employee’s work.
I wonder if this case will bring back a discussion of “ball park” notice periods? Certainly the doctrine creates one more incentive to avoid giving working notice.
Read the case at: http://canlii.org/en/bc/bcca/doc/2012/2012bcca18/2012bcca18.html