Retracted Resignation’s Impact on Termination Notice Period – The Ontario Court of Appeal Rules in Theberge-Lindsay v. 3395022 Canada Inc. (Kutcher Dentistry Professional Corporation)

 

In this decision, the Ontario Court of Appeal considered the effect of an employee’s resignation and re-employment in a wrongful dismissal case.

Jasmine Theberge-Lindsay, the respondent, began working in the appellant Dr. Kutcher’s dental practice as a hygienist in 1993. Dr. Kutcher restructured his practice in various ways in the succeeding years; accordingly, the respondent was required to sign a series of employment agreements starting in 1999, all of which limited her entitlement to wrongful dismissal damages to the minimum required by the Employment Standards Act, 2000.

By correspondence dated March 28, 2005, Theberge-Lindsay tendered her resignation effective July 7, 2005. She was engaged to a man who lived in Guelph and had secured employment there to be commenced after July 7, 2005.

During the notice period and prior to her effective day of resignation, however, the respondent ended her engagement and advised Dr. Kutcher of her intention to remain employed at his office.

On June 30, 2005, the respondent was presented with and signed an employment agreement that limited the appellant’s liability should it terminate her without cause, to notice or payment in lieu of notice in accordance with the ESA.

In December 2012, the appellant terminated the respondent’s employment without cause. She was given one week’s salary as the ESA minimum, since she had signed her most recent employment agreement in 2011.

The trial judge held that the respondent was wrongfully dismissed and assessed common law damages in lieu of reasonable notice at fifteen months.

Chiappetta J.’s conclusion turned on her finding that “[a]t all times between 1993 and December 20, 2012, the plaintiff’s employment as a hygienist for Dr. Kutcher’s practice continued uninterrupted.”

The appellant submitted on appeal that the trial judge erred in failing to take account of the respondent’s resignation from her employment in 2005. The appellant argued that the 2005 resignation broke the chain of Theberge-Lindsay’s employment since 1993. She was required on June 30, 2005 to sign a new employment agreement in order to be re-hired on July 1, 2005. Consequently she was, at best, entitled to the Employment Standards Act, 2000 minimum notice measured from the date that she was re-hired in 2005.

The Court of Appeal agreed.

In a brief decision, the court held that the respondent’s unequivocal resignation and re-hiring in 2005 marked a break in the employment relationship, after which an entirely new contract was reached between her and the appellant. There was consideration for that new employment: the respondent expressed her desire to again be employed by the appellant, and he agreed to employ her.

The court held that on this basis, Theberge-Lindsay was entitled to 7.5 weeks’ salary at $1,204 per week, less $1,200 severance already paid.

Key Takeaway

This decision is interesting with respect to the meaning of a resignation. Although the respondent never actually ceased working for Dr. Kutcher, the Court of Appeal declined to find a continuous period of employment from 1993 to 2012. The court essentially determined that where an employee retracts her resignation, an employer may re-hire her on new terms — even when she is taken back on identical terms to her previous employment – which are valid and binding.

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