The Question
I work for a small Canadian division of a California-based company and am planning on retiring soon. Although technically employed by a Canadian company, I report directly to our division head in California. I intend to give six months notice of retirement. I have worked for the company for almost 18 years, am a vice-president and will turn 60 around the time I give notice. Is the company obligated to honour my six months notice, or could they decide to dismiss me sooner? Labour laws are very different in California, but as an employee of a Canadian company, would I be covered by Canadian laws? If the company decided to dismiss me earlier than the six months notice, would I still be entitled to full pay for the period of notice or perhaps even more? I intend to leave on good terms, but also wish to protect my own interests.
The First Answer
Daniel Lublin, partner, Whitten & Lublin, Toronto
The company may be headquartered in California, but employees living and working in Canada fall under Canadian workplace laws. Here, just as an employer must provide you with reasonable notice of termination, you are required to provide fair notice of a retirement or resignation, both of which have the same effect. The notice required depends on your seniority and how long it should reasonably take for your employer to secure a qualified replacement. Keeping in mind your senior role and tenure, providing six months notice is not unreasonable and if your employer refused to allow you to work for part or all of the six-month time frame, then you become entitled to your lost wages and benefits for the remainder of the six-month period you provided, but not more.
There are several possible exceptions. If you have signed an employment agreement or policy handbook (and assuming it is binding, as some are not), these contracts may outline the precise resignation notice period you are required to provide. If so, you can offer more notice than the specified amount, but your employer need not agree to it and would only have to pay you for the contractual time frame.
The other possible but less likely exception is if your employer asserts that six months notice is excessive. It would be hard to demonstrate that six months notice is unwarranted in your situation, but in other cases, where the length of the resignation notice goes well beyond a reasonable amount, the employer could ask you to leave earlier without necessarily being required to pay you for the remaining period of time you sought to work.
The Second Answer
Amiri Dear, lawyer, Hummingbird Lawyers LLP, Toronto
Subject to the terms of your employment agreement, despite reporting to your division head in California, as an employee of a Canadian company you are protected by Canadian employment law.
Regarding your six months notice of retirement, such notice is treated in the same manner as a general resignation. When retiring, an employee must give an employer reasonable notice. What amounts to reasonable notice is based entirely on the facts. Reasonable notice can range from anywhere between two weeks to 12 months. Your years of service, the nature of your responsibilities and how long it will take the company to fill your position will all be taken into account in determining what is reasonable. Owing to your tenure and your role as a vice-president, in my view, a minimum of six months notice should be given.
Unlike California, Canada is not an “at-will” jurisdiction. Therefore, if the company opted to terminate your employment prior to your resignation it would have to provide you with notice of termination in the absence of just cause. If it terminates your employment, the company could also opt to pay you in lieu of providing notice. Employment-standards legislation provides minimums for what is required in terms of notice. However, common law amplifies these provisions and generally awards employees one month’s notice for every year worked for the employer. If your employer sought to terminate you, it would likely have to give you more than six months notice or pay in lieu of notice. As you’ve worked for 18 years, your notice or pay in lieu thereof could equal or potentially exceed 18 months.
The above article is not intended to be legal advice. Individuals should still seek legal counsel.
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