Exceptional Damage Awards

Notice of Resignation – a Contract

It is the law that an employee must provide advance notice of resignation, as reviewed here. The question may arise as to whether the employee may resile from an offer of resignation.

Once an employee has provided a valid notice of resignation, and the employer has accepted it, a new contract has been formed. Neither party can resile from this agreement. This presumes that the resignation was freely given and clearly and unequivocally showed the intent to resign and was not given in a moment of emotion.

This issue was reviewed in a 2018 Ontario decision. 1

The decision reviewed earlier law which had stated that the employee was allowed to resile from the resignation unless the employer had acted to its detriment in reliance upon the notice of resignation. 2

This principle was rejected in the Ontario case. Edwards J. stated that the offer of resignation and its acceptance formed a contract:

[30]      The law in my view has evolved, and is now more a reflection of basic contract law.  If the evidence establishes that there has been an offer in the form of a notice of resignation and an acceptance of that offer by the employer, basic rules of contract dictate that there is a binding contract between the parties which cannot be resiled from.

This was also the view of the Nova Scotia Court of Appeal in 2015. 3 It was also then noted that the employee may well resile from the notice of resignation, where there has been no acceptance and the employer has not acted to its detriment.

The Ontario decision found that there was a contract and the plaintiff could not resile from it.

The Court of Appeal, however, reversed the lower court decision as the employer had failed to show that the initial resignation was unequivocal. However, this decision did not reverse on the foundational argument, which remains obiter as the Court of Appeal did not sustain the factual premise. 4

On a further point, should the employer respond to the notice of resignation and choose to terminate, the employee will then be entitled to the statutory and common law remedies.5

An issue may arise as to whether the employee's common law claim should be limited to the intended notice. An employee, for example, who offered four months advance notice resulting in termination, the submission may follow, should be limited to this notice that they deemed fair. There is no law on this subject and there is no logic behind this submission as the purposes of each notice obligation is not identical.