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Difference between revisions of "Employment Law Issues (9:V)"
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Employment Law Issues (9:V) (view source)
Revision as of 23:43, 29 December 2020
, 23:43, 29 December 2020→When an employer can sue an employee
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The duties listed below are generally implied in employment contracts. This list of duties is not exhaustive. | The duties listed below are generally implied in employment contracts. This list of duties is not exhaustive. | ||
=== | === 35. Duty to perform employment functions in good faith === | ||
Employees owe a duty of good faith to the employer; this is an implied term of employment contracts. An employee might breach this by actively working against one of their employment duties; for example, a supervisor who is supposed to retain employees could breach this duty by inducing the employees they supervise to resign in order to complete against the employer. See ''RBC Dominion Securities Inc v Merrill Lynch Canada Inc'', 2008 SCC 54, and ''Consbec Inc. v Walker'', 2016 BCCA 114, for further details. | Employees owe a duty of good faith to the employer; this is an implied term of employment contracts. An employee might breach this by actively working against one of their employment duties; for example, a supervisor who is supposed to retain employees could breach this duty by inducing the employees they supervise to resign in order to complete against the employer. See ''RBC Dominion Securities Inc v Merrill Lynch Canada Inc'', 2008 SCC 54, and ''Consbec Inc. v Walker'', 2016 BCCA 114, for further details. | ||
=== | === 36. Duty to give reasonable notice of resignation (wrongful resignation) === | ||
An employee must give their employer reasonable notice if they are resigning. “Reasonable notice”, in the case of resignations, is much shorter than the notice that employers must give to employees who are being dismissed. Although giving two weeks’ notice is the usual practice, the courts may require more or less than that amount, depending on the employee’s responsibilities | An employee must give their employer reasonable notice if they are resigning. “Reasonable notice”, in the case of resignations, is much shorter than the notice that employers must give to employees who are being dismissed. Although giving two weeks’ notice is the usual practice, the courts may require more or less than that amount, depending on the employee’s responsibilities. | ||
=== | If an employee breaches this duty, they may be held liable for the profits that their continued employment would have generated for the employer; this is generally only of concern if the employee generates significant profits for the employer. For further details, see ''RBC Dominion Securities Inc v Merrill Lynch Canada Inc'', 2008 SCC 54. | ||
=== 37. Competition against the employer === | |||
If an employment contract contains a restrictive covenant (such as a non-competition clause or a non-solicitation clause), see [[{{PAGENAME}}#1. Restrictive Covenants | section IV.F.1: Restrictive Covenants]], above. Employees without a valid non-competition clause (and who are not in a fiduciary position – see [[{{PAGENAME}}#5. Fiduciary duties | section V.E.3: Fiduciary duties]], below) may compete against an employer as soon as they are no longer employed by the employer (''Valley First Financial Services Ltd v Trach'', 2004 BCCA 312). However, employees should be careful not to compete unfairly, or compete using confidential information obtained from their former employer. | If an employment contract contains a restrictive covenant (such as a non-competition clause or a non-solicitation clause), see [[{{PAGENAME}}#1. Restrictive Covenants | section IV.F.1: Restrictive Covenants]], above. Employees without a valid non-competition clause (and who are not in a fiduciary position – see [[{{PAGENAME}}#5. Fiduciary duties | section V.E.3: Fiduciary duties]], below) may compete against an employer as soon as they are no longer employed by the employer (''Valley First Financial Services Ltd v Trach'', 2004 BCCA 312). However, employees should be careful not to compete unfairly, or compete using confidential information obtained from their former employer. | ||
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If an employment contract contains a restrictive covenant (such as a non-competition clause or a non-solicitation clause), see Section V.D.1: Restrictive Covenants, above. | If an employment contract contains a restrictive covenant (such as a non-competition clause or a non-solicitation clause), see Section V.D.1: Restrictive Covenants, above. | ||
=== | === 38. Duty not to misuse confidential information === | ||
It is an implied term of an unwritten employment contract that the employee will not misuse the employer’s confidential information. A common example of confidential information is the employer’s list of customers. Employees who take a customer list by printing it out or putting it on a USB key and taking it with them, or by emailing it to themselves, would be in breach of this duty. One notable exception is that an employee may use any part of the customer list that they have simply memorized (per ''Valley First Financial Services Ltd v Trach'', 2004 BCCA 312). Additionally, employees such as financial advisors, who have developed ongoing relationships with clients, may be entitled to take a list of their own clients to inform them that they are departing, and where they will be working in the future (''RBC Dominion Securities Inc v Merrill Lynch Canada Inc et al'', 2007 BCCA 22 at para 81, reversed in part at 2008 SCC 54; ''Edwards Jones v Voldeng'', 2012 BCCA 295). Note however that this may be prevented if the employee is in a fiduciary position, and there may be limits on the permitted contact or other complications if the employee signed a non-solicitation agreement. | It is an implied term of an unwritten employment contract that the employee will not misuse the employer’s confidential information. A common example of confidential information is the employer’s list of customers. Employees who take a customer list by printing it out or putting it on a USB key and taking it with them, or by emailing it to themselves, would be in breach of this duty. One notable exception is that an employee may use any part of the customer list that they have simply memorized (per ''Valley First Financial Services Ltd v Trach'', 2004 BCCA 312). Additionally, employees such as financial advisors, who have developed ongoing relationships with clients, may be entitled to take a list of their own clients to inform them that they are departing, and where they will be working in the future (''RBC Dominion Securities Inc v Merrill Lynch Canada Inc et al'', 2007 BCCA 22 at para 81, reversed in part at 2008 SCC 54; ''Edwards Jones v Voldeng'', 2012 BCCA 295). Note however that this may be prevented if the employee is in a fiduciary position, and there may be limits on the permitted contact or other complications if the employee signed a non-solicitation agreement. | ||
=== | === 39. Fiduciary duties === | ||
Only a small fraction of employees are in a fiduciary position. They may have fiduciary duties if they are directors of the company, or if they are senior officers in a top management position (per ''Canadian Aero Service Ltd v O’Malley'', [1974] SCR 592). A fiduciary position is generally one where the fiduciary (the employee) has some discretion or power that affects the beneficiary (the employer), and the beneficiary is peculiarly vulnerable to the use of that power (per ''Frame v Smith'', [1987] 2 SCR 99). | Only a small fraction of employees are in a fiduciary position. They may have fiduciary duties if they are directors of the company, or if they are senior officers in a top management position (per ''Canadian Aero Service Ltd v O’Malley'', [1974] SCR 592). A fiduciary position is generally one where the fiduciary (the employee) has some discretion or power that affects the beneficiary (the employer), and the beneficiary is peculiarly vulnerable to the use of that power (per ''Frame v Smith'', [1987] 2 SCR 99). | ||
