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The Toronto Sun CareerConnection

Ending the employment relationship

By Mary Lou H. Brady and Karen M. Sargeant
Special to the Toronto Sun

To state the obvious, not all employment relationships end in retirement. Often, an employee voluntarily resigns to seek better employment opportunities elsewhere. Other times, an employee's departure is not voluntary -- meaning that the employer takes the initiative to terminate that employee's employment either with or without cause.

Legal landmines

Whatever the situation, the end to an employment relationship is full of potential legal landmines for both employees and employers.

This is the first of a two-part series dealing with the end of the employment relationship. It is intended to provide both employees and employers with important information on their respective obligations and entitlements when an employee resigns.

The second part of this series will focus on employee terminations.

As an employee, you have the clear legal right to leave your employment at any time. Your employer does not "own" you and, as such, you generally have the right to offer your services to whomever you want.

However, before making any moves, you should check your employment agreement and/or company policy manual, as they may impose some specific obligations on you when resigning.

That said, there are a number of obligations that exist whether or not they are written in your employment agreement or company policy manual.

For example, you must provide your employer with reasonable advance notice of your resignation date and, for most positions, this translates into a generally accepted practice of two weeks' written notice. This notice requirement may, however, be much higher for people holding specialized and/or senior level positions in an organization -- simply because they cannot be so quickly replaced.

Special rules also apply to Ontario employees of provincially-regulated employers who decide not to return to work after taking pregnancy and/or parental leave. If you fall into this category, you must provide a minimum of four weeks' written notice of your resignation date under Ontario's Employment Standards Act.

Frankly, if you know you are not returning to work, we recommend providing as much notice as possible in order to maintain positive relations with your former employer.

Good terms

Don't underestimate the efforts that your employer has made to hold your position open for your return to work. Rightly or wrongly, an eleventh hour resignation might be perceived in such circumstances as being both irresponsible and unfair to the employer.

You never know when you will need an employment reference and leaving on good terms is always best.

After resignation, you will still have ongoing obligations to your former employer. This includes a general obligation not to disclose or use confidential information obtained in your former employment.

Confidential information

Any such confidential information belongs to your former employer, not to you. If your new employer expects you to disclose and/or use this confidential information, think very carefully before accepting that job. Who will pay your legal fees if you are sued for violating your confidential information obligations -- let alone pay the resulting damages award?

You also have a general ongoing obligation not to take any deliberate actions that are likely to injure your former employer's business. Depending on the position that you held with your former employer, this may include an obligation not to solicit away their customers and/or their employees.

It may also include an obligation not to be involved in a business competing with your former employer's business for a certain period of time after your resignation date.

Your employer also has some limited obligations to you if you resign. For example, your employer must pay your regular wages and vacation pay accrual up to and including your resignation date. Your employer must also continue to make its regular contributions to your employee benefit coverage until that date.

These obligations generally exist, even if your employer decides that it does not want you to continue report to work between the date that you submit your resignation notice and your stated resignation date.

As you can imagine, complete textbooks have been written on both employees' and employers' obligations at the end of an employment relationship.

This brief summary is intended to provide you with a basic overview of some of the more common obligations when an employee resigns and is not a substitute for legal advice.

While this summary may have application in other provinces and/or to federally-regulated workplaces, it has been drafted for provincially-regulated employers in Ontario and their respective employees.

Mary Lou Brady and Karen Sargeant are lawyers with the law firm of McCarthy Tetrault LLP in the firm's London and Toronto, Ont., offices, respectively. Practicing exclusively in the area of labour and employment, both Brady and Sargeant carry on general management-side labour and employment law practices in which they advise employers on a wide spectrum of matters, including employee terminations and resignations.

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