When it comes to ending an employment contract, not everything goes! The employer as well as the employee must follow certain rules. This article explains the rules that apply to compensation and notices of termination.
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Important! Most of the rules explained below are from a law called the Act respecting labour standards. Most employees in Quebec are covered by this law, but there are certain exceptions. |
Is a written notice necessary?
The Act respecting labour standards says that an employer who terminates your employment must give you written notice, so you have time to prepare for losing your job.
However, there are some situations where your employer doesn’t have to give you advance notice:
- You worked less than three months. For example, the employer realizes after a few weeks that you aren’t doing the job well.
- Your employment contract has an end date. (These employees are often called “contract workers” or “temporary employees.”)
- You were guilty of misconduct. For example, you stole from your employer or committed fraud.
- Your employment was terminated because of an event beyond anyone’s control. For example, a fire completely destroyed the factory you were working in.
Advance notice periods that differ based on your situation
The notice of termination of employment must respect certain minimum periods set out in the Act respecting labour standards. The length of the period depends on how long you’ve been working for your employer:
- less than 3 months of continuous service: no minimum advance notice period
- between 3 months and less than 1 year: 1 week
- between 1 and less than 5 years: 2 weeks
- between 5 and less than 10 years: 4 weeks
- 10 years or more: 8 weeks
Note that these time periods are the minimum required by law.
In certain situations, your employer may need to give you more notice that the minimum required by the Act respecting labour standards. In fact, the Civil Code of Quebec states that an employee is entitled to “reasonable” notice at the end of employment. The minimum notice period found in the Act Respecting Labour Standards is therefore not always considered to be long enough.
There is no specific formula for determining what is “reasonable.” Instead, the courts look at the whole of the circumstances to determine how much time a person would normally need to find a similar position. For example, in some cases, the courts have extended the notice period to six month, nine months, 12 months, 18 months, and even 24 months.
Among the factors that might justify a longer notice period, courts have considered:
- The worker’s age, especially from around age 50,
- Term of employment,
- The job; for example, whether it is highly specialized,
- Job prospects in the area or the person’s field,
- Foreseeable reemployment challenges, notably when the job market is bad or when dismissal occurs at a time when hiring is down,
- The fact that the employer recruited or scouted the individual to take the position.
The behaviour of the employer at the end of employment can also be considered to determine the length of the notice period. For example, courts have sometimes required employers to provide more notice when the employer acted in a manner that made the job search more complicated, for example by refusing to provide a letter of reference or by conducting the termination under circumstances that affected the worker’s reputation.
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Important! Employer financial problems do not affect an employee’s right to reasonable notice. Courts generally consider that the financial condition of the business does not, on its own, justify giving less notice. |
Compensation instead of notice
Instead of letting you know in advance that you’ll be losing your job, your employer can pay you a “compensatory indemnity”. This compensation is equal to the salary you would have received during the period of the notice to which you were entitled.
Example: Luc has been working at the same job for two years. At the end of a workday, Luc’s employer tells him his employment has been terminated, effective immediately. Luc was entitled to a notice of two weeks before losing his job. Luc’s employer must therefore pay him compensation equal to two weeks of salary.
Be careful what you sign
Sometimes an employer offers an employee compensation subject to certain conditions (a “package”).
Before signing the document, make sure the amount offered respects the minimum provided by law. Read the entire document. Sometimes non-competition clauses prevent you from working in your own field. Also, if you receive a large indemnity, you might have to pay unexpected taxes.
Talk to a professional if you’re not sure whether accepting the package is a good idea in your situation.
Employee’s responsibilities
As an employee, you also have certain responsibilities. When you receive an advance notice of termination that respects the rules, you must continue to work until the last day indicated in the notice. If you don’t, your employer doesn’t have to pay you any compensation.
If you decide to leave your job, you must also give reasonable notice to your employer. Here as well, the length of the advance notice depends on the situation. For example, if you hold a strategic position in a company, you’ll probably have to give your employer more than just a few days’ notice, given your importance to the company.
If your employer does not give you reasonable notice
If your employer terminates your employment without giving you reasonable notice or compensation instead of notice, you can claim compensation in court. Generally speaking, you have three years to do so.
If the court decides that notice should have been longer, it can order that you be paid compensation equal to the salary and certain benefits you would have received during this time period. At the same time, you need to make reasonable efforts to find other employment. Income earned during this time period may reduce the amount to which you are entitled.
Under some circumstances, you can also claim damages, for example, if your employer acted in a humiliating manner or in a manner affecting your rights or reputation..