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An Employer's Survival Guide: The Great Resignation
Employee retention is more important now than ever due to the “Great Resignation,” a term used to dub the ongoing trend in the United States whereby employees continue to resign from their jobs.1 While Canadian employers have not experienced the Great Resignation in the same numbers2, it is worthwhile to take a closer look at this trend.
Various factors have been cited for the Great Resignation including low wages, rising costs of living, and health/safety concerns in the workplace due to COVID-19. However, among those repeatedly emphasized are job dissatisfaction and the desire to work for employers who prioritize work-life balance.3
In light of these findings, employers should consider how to retain current employees and familiarize themselves with their rights regarding employee resignation.
Defining Wrongful Resignation
Wrongful resignation is essentially the employer’s counterpart of wrongful dismissal. The latter occurs where an employee claims that their employer failed to provide proper notice of dismissal or pay in lieu thereof. The former is invoked by employers where they claim the employee failed to provide them with reasonable notice of their intention to end their employment.
Establishing Wrongful Resignation
While the Employment Standards Act, 2000 (“ESA”) is silent as to the notice period required by employees to employers upon resignation, it is generally accepted that employees must provide reasonable notice of their intent to leave.4 In the absence of an employment contract specifying a notice period, reasonable notice of resignation will be deemed an implied term of the contract.5 This is meant to give employers time to find a replacement for the employee.
Courts assess the notice period with reference to factors including the employee’s responsibilities, length of service, salary, and the time it would reasonably take the employer to replace the employee or otherwise adapt to its loss.6 For example, in the case of a senior employee, the Court found that the two weeks’ notice provided by the employee was "totally inadequate."7
Assessment of Damages Owed to Employers
Damages may be awarded to employers where the employee has failed to provide reasonable notice of resignation, however the threshold for entitlement is high.
Employers must demonstrate that they have experienced more than an “inconvenience” and that they suffered losses or costs in excess of what was saved by not paying the employee’s salary during the notice period.8 Damages must also be “reasonably related” to the employee’s resignation and are subject to the employer’s duty to mitigate losses by searching for a replacement. The table below summarizes examples of damages awarded to employers in wrongful resignation cases.
Employee Retention Recommendations
Overall, employers may be better served by focusing on how to retain current employees. While there are certain immediate actions that employers can take, others are not tangible and come from changes within a company’s culture, values, and management. The key recommendations are summarized below.
For further information, please contact a member of our growing team: Leslie Dizgun, Paul Schwartzman, or Alyssa Jagt.
This publication is intended only to provide general information. It should not be relied on as legal advice.
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1What is The Great Resignation and what can we learn from it | World Economic Forum (weforum.org)
2The Daily — Labour Force Survey, December 2021 (statcan.gc.ca).
3The Great Resignation: Why workers say they quit jobs in 2021 | Pew Research Center. For example, 33% of survey respondents cited “no opportunities for advancement” as a major reason why they left their job and 35% said it was because they “felt disrespected at work.”
4Sure-Grip Fasteners Ltd v Allgrade Bolt & Chain Inc., 1993 CarswellOnt 931, [1993] OJ No. 193 at para 19.
5Ibid at para 20.
6Ibid at para 21.
7GasTOPS Ltd v Forsyth, 2009 ONSC 66153 (CanLII) at para 459.
8Anderson v Total Instant Lawns Ltd., 2021 ONSC 2933 (CanLII) at para 39.
9Bradley v Carleton Electric Ltd., 1995 CarswellOnt 635, [1995] OJ No. 4030 at para 25. [Bradley]
102016 ONSC 209 (CanLII).
11Bradley, supra note 9.
122005 CarswellOnt 7315, 140 ACWS (3d) 982.