Termination of employment contract: everything to know about notice of termination

Part of the provisions governing labour law are found in Chapter Seven of Title II of the 5th Book of the Civil Code of Quebec. A contract of employment is a contract by which a person, the employee, undertakes for a limited time and for remuneration, to carry out work under the direction or control of another person, the employer (art 2085 CCQ).

In the event of termination of the employment contract, a mechanism, called the notice of termination, is applied between the parties. Find out its details and what it means for the employee and the employer.

A reasonable notice of termination

Each party to a contract for an indefinite duration may terminate the employment contract by giving the other party a reasonable notice of termination. In particular, it must take into account the nature of the job, the particular circumstances in which it is performed and the duration of the work period (article 2091 CCQ). As such, it is sometimes recommended to speak to a labour law professional if you want to be properly advised and supported.

Notice of termination compensation

Case law states that the notice of termination is a period of actual work during which the contract continues to apply in its entirety. This period must be given to the other party and must be reasonable. However, the practice recognizes that an employer who wishes to immediately terminate the employment contract may pay the employee compensation equivalent to the reasonable notice of termination (Ellingsen v. PwC Management Services LP, 2014 QCCS 4199).

The company’s obligations

In 1997, the Supreme Court of Canada had the opportunity, in the Wallace judgment, to reflect upon the extent of the notice of termination. It upheld the principle that all financial benefits that an employee enjoys are included in the definition of salary, wages and other compensation. This means that group insurance, pension plans, bonuses, expense accounts, vacation and other benefits must also be considered as part of the salary in the compensation calculation for the notice of termination.

In the Aksich v. Canadian Pacific Railway judgment of the Quebec Court of Appeal, Madam Justice Bich very clearly recalls the scope of Article 2091 CCQ, stating that the severance pay to which the former employee is entitled is equal to the remuneration that would have been paid to him if the employer had given the appropriate notice of termination and if he had worked all this time and all the financial benefits related to the performance of the work or provided for in the contract of employment .

Moreover, article 2092 of the CCQ provides that an employee may not renounce the right to obtain compensation for the damage he suffers when the notice of termination is insufficient, or the termination is carried out in an abusive manner. Much like section 2091, this is a public policy provision. This means that the contractual provision which determines the duration of the notice of termination in advance is null, since an employee cannot waive the right to obtain compensation.

The cumulation of remedies

The extent of the employer’s obligations for terminating an employee’s contract of employment is not limited to the provisions contained in the Standards Act. In fact, an action may be brought in parallel or exclusively before the civil courts on the basis of Articles 2091 and 2092 CCQ.

Asserting your rights

Notice of termination is a serious element to take into account in the preservation of these rights in light of the criteria set out in the law and jurisprudence. Many judgments have come to allow several months’ notice of termination depending on seniority, position, age, sex and personal situation.

For example, the case of Le Ports v. Ethypharm Inc. granted the employee an 18-month leave allowance for a five-year work period. Another example is Chalifour v. IBM Canada Ltd. which granted a twenty-four-month leave pay for twelve years.

Have you been subject to a termination of employment contract and want to know your rights? Contact our firm now and obtain the advice of Me Julien Bérard, a lawyer practicing in labour law.

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