THE QUESTION
I just resigned from a job with two weeks’ notice to start a new job. My boss pointed out that my contract says I was supposed to give six weeks’ notice. Honestly, I didn’t pay enough attention to the contract and thought two weeks was standard, so I know it’s my fault for not reading the contract carefully. But now the company is penalizing me $50 a day for the four weeks in between – a total of $1,000 – that they’re withholding from my paycheque. Is this legal?
THE FIRST ANSWER
Balraj K. Dosanjh, labour and employment lawyer, Cavalluzzo LLP, Toronto
Generally speaking, whether you are required to provide any notice to your employer depends on the applicable employment legislation in your jurisdiction and the terms of your employment contract. In Ontario, for example, there is no legal requirement under the Employment Standards Act for an employee to provide notice to an employer unless it is a mass termination of more than 50 employees. In Nova Scotia, however, the Labour Standards Code requires employees to provide one to two weeks of notice depending on their length of service. In your case, your contract stipulates a notice requirement. This notice period is not necessarily enforceable.
The notice clause may not be enforceable if it appears punitive and intended to undermine an employee’s right to end employment rather than a legitimate attempt by the employer to recover actual damages caused by the employee’s departure. In your case, because you provided two weeks’ notice, it would likely be difficult for your employer to establish damages from the insufficient notice provided by you, especially because the employer appears to be deducting an arbitrary amount from your wages. Ultimately, the employer would need to establish actual damages from your departure, which exceed the cost savings from the salary they would have paid you during that time.
In any event, your employer should not be unilaterally withholding your wages or applying deductions without your prior written authorization. Employers are expected to follow the applicable legal process to enforce their notice clause rather than taking matters into their own hands. I encourage you to reach out to your Ministry of Labour as you may have a valid complaint against your employer.
THE SECOND ANSWER
Jonquille Pak, lawyer and founder, JPAK Employment Lawyers, Toronto
No, this is not legal. It is unlawful for the company to unilaterally withhold your pay without your written consent. Even if the employment contract specifies that you should have given six weeks’ notice, this is not a valid excuse to dock your pay. In Ontario, employment standards legislation prohibits employers from withholding pay or making deductions for amounts the employer claims that the employee owes, unless the employee has provided valid written authorization for the deductions in question, or the deduction is otherwise permitted under statute or by court order. In Ontario, if you are a provincially regulated employee, you can file a complaint with the Ministry of Labour. If the Ministry finds that the deductions were unlawfully made, the employer would be ordered to pay you the $1,000 it withheld.
Regarding the amount of notice you should have provided, two weeks is a common standard for most occupations, particularly for non-management employees. Yes, technically, a failure to comply with the notice provisions in the contract is a breach of the contract and may be considered a ‘wrongful resignation’. The employer has the right to pursue a civil claim for wrongful resignation with the courts. Although a resignation on short notice may cause some business disruption, this does not mean you owe any compensation to the employer. The employer would have to prove that it suffered losses on account of the inadequate notice provided. Even if there are provable losses, they may be entirely offset or exceeded by the cost savings to the employer by not having paid you over the four weeks that you did not work. Practically speaking, in most instances, pursuing a civil claim for wrongful resignation is not worth the employer’s time or money.
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