Resignation vs. Termination Notice

Recently, a client contacted me with the following question:

“If an employee has provided 2 ½ months notice for resignation but we don’t require (or want) him here for more than two weeks – how do we handle it legally?”

The answer is that it depends on the employee’s service with the company but it is the lesser of the resignation notice or the termination pay that would be owed under the Employment Standards Act, 2000 minimums.  For example, if the employee has 2 years of service, you would owe 2 weeks pay under Employment Standards (rather than 2 ½ months) because in essence you are terminating his employment (see section 56 subsection (1)(a) of the Act).  However, if the employee has 10 years of service, you may be obligated to pay the 2 ½ months (or continue to have the employee work for this period of time).  If severance is applicable, then the employee would be entitled to 8 weeks notice and 10 weeks of severance.  Therefore, the 2 ½ months of resignation notice would be less.  If severance is not applicable, then the employee would be entitled to 8 weeks notice only which would be less than the resignation notice of 2 ½ months.  You would be terminating his employment and paying (or having him work) the 8 weeks of notice.

So, the next time you have an employee submit a resignation letter with a significant notice period, double check his/her service date!

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