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THE QUESTION

I recently started a new job and the employment contract says we need to give one month’s notice. Right away I knew it wasn’t a good work environment and I wanted to leave. I recently got a new offer but they need me to start in two weeks. What happens if I leave with less than one month’s notice, as stated in my contract? Can the old company sue me?

THE FIRST ANSWER

Shibil Siddiqi, employment and human-rights lawyer, Progressive Barristers, Toronto

Quitting your job without giving proper notice is considered “wrongful resignation.” Employers can potentially sue employees who wrongfully resign. Whether they are likely to do so depends on several factors.

It is a common misconception that employees are only required to provide two weeks’ notice. Longer notice periods can be specified in the employment contract. Where notice is not specified, courts imply reasonable notice by an employee based on their specialization, responsibilities and how long it might reasonably take an employer to replace them.

A breach of the employment contract is not a windfall for the employer. In wrongful resignation cases, an employer must show that the employee’s departure resulted in unavoidable business losses. This can include lost sales, cancelled projects or overtime paid to other employees. The wrongfully resigned employee’s salary is typically deducted from these damages to reflect the employer’s lower payroll costs. The employee is generally not liable for business losses sustained beyond the notice period. Keeping this in mind, often it will not be worth an employer’s while to pursue wrongful resignation.

However, there have been several cases where employers have obtained wrongful resignation damages. In many of these cases, the employees worked in sales or in professional or executive positions, and their unexpected departure resulted in a loss of revenue, clients and business opportunities for the employer.

In your situation, you should assess whether your early departure will lead to your employer sustaining business losses and whether there are ways to reduce these losses. Even if you can’t provide the full contractual notice, provide as much notice as you can. Finally, seek timely legal advice; it can be critical in situations involving potential legal liability.

THE SECOND ANSWER

Cynthia Lazar, lawyer and workplace investigator, Taylor McCaffrey LLP, Winnipeg

Both your employment contract and the employment standards legislation in your province or territory should be considered in answering the question.

Many employment contracts provide for a trial or probationary period in which you and your employer decide if you are a good fit for the job. If your contract provides probation, and you are within the probationary period, you can usually leave without notice, unless your contract specifically states otherwise.

If your contract does not provide for a probationary period, or it does but that period is over, your employer may sue you for costs incurred as a result of you failing to provide proper notice (”wrongful resignation”). This does not include the cost of your replacement. A lawsuit is unlikely to happen unless you are a valued senior executive, top salesperson or your position can only be filled through an expensive recruitment process, as these lawsuits can be very costly.

Employment standards legislation also provides for the amount of notice of resignation an employee has to give an employer. Depending on the jurisdiction and the length of employment, this usually ranges from zero in the first short while (often 30 days) to two weeks. At present, it is a little unclear as to whether a contract requiring more notice of termination than the statutory requirement is valid, as the case law is developing in this area.

If there is a union at your workplace, other rules may apply, and you should consult with your union representative.

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