Working Notice — You're Fired in 8 Weeks, Starting Now

What Working Notice Actually Is

Working notice is exactly what it sounds like: the employer tells the employee their job is ending on a specific future date, and the employee continues to work until that date arrives. Instead of handing over a cheque and saying "don't come back," the employer says "keep working for the next eight weeks, and then you're done."

Under both the Employment Standards Act, 2000 and the common law, working notice is a perfectly legitimate way to satisfy termination obligations. The ESA explicitly contemplates it — an employer can provide written notice of termination, termination pay in lieu of notice, or a combination of the two. Working notice is the "written notice" option.

For employers, working notice has obvious advantages: they get continued productivity from the employee during the notice period, they avoid the cash outlay of a lump-sum termination payment, and they maintain business continuity during the transition. For employees, working notice means continued income, benefits, and — critically — the ability to job search while still employed, which is almost always better for their career prospects.

But working notice is not as simple as it appears. The law imposes real conditions on how it must be provided, and employers who get the details wrong can end up owing the full notice period over again.

The ESA Requirements During Working Notice

The ESA is specific about what must happen during the statutory notice period. Section 60 of the ESA provides that during the notice period, the employer must:

- **Not reduce the employee's wage rate** or alter any other term or condition of employment

- **Continue to make benefit plan contributions** to maintain the employee's benefits

- **Pay the employee their regular wages for a regular work week** each week during the notice period

These requirements are non-negotiable. An employer cannot put an employee on working notice and simultaneously cut their hours, reduce their pay, reassign them to a demeaning position, or strip their benefits. If the employer does any of these things, the working notice is defective and does not count.

In Kwas v. Mullen-Foran Ltd., 2000 CanLII 22621 (ON LRB), the Ontario Labour Relations Board considered a situation where an employer provided working notice but fundamentally changed the employee's role during the notice period. The Board held that the notice was ineffective because the employer had breached the ESA requirement to maintain terms and conditions of employment.

The Common Law Overlay: "Reasonable" Working Conditions

The common law imposes additional requirements that go beyond the ESA's statutory minimums. At common law, working notice is only effective if the working conditions during the notice period are reasonable.

In Rusinek v. Dominion of Canada General Insurance Company, 2009 CanLII 55366 (ON SC), the Ontario Superior Court addressed the issue directly. The court held that for working notice to be effective at common law, the employer must maintain the employee in a position that is reasonably comparable to the employee's pre-notice position. If the employer strips the employee of meaningful duties, marginalizes them within the organization, or creates conditions that make continued employment humiliating or untenable, the working notice is not valid.

This principle was reinforced in Gristey v. Emke Schaab Chicken Ltd., 2014 ONSC 4520, where the court found that an employer's failure to provide the employee with meaningful work during the notice period rendered the working notice ineffective. The employee was entitled to pay in lieu as if no notice had been given.

What counts as "reasonable" working conditions during notice? Courts look at several factors:

- **Maintenance of duties:** The employee should continue to perform work substantially similar to their pre-notice duties.

- **Maintenance of reporting structure:** Dramatic demotions during the notice period undermine the effectiveness of the notice.

- **Professional dignity:** If the employer announces the termination in a way that humiliates the employee or signals to colleagues that the employee is being pushed out, the working conditions may be unreasonable.

- **Access to resources:** Cutting off the employee's access to files, systems, or clients during the notice period may render the notice defective.

Can the Employee Refuse to Work the Notice Period?

Yes — but the consequences depend on the circumstances.

An employee who receives working notice can choose to resign before the notice period expires. Under the ESA's mass termination provisions, there are specific rules: an employee who has received notice under the mass termination rules and wants to resign early must give at least one week's written notice if employed less than two years, or two weeks' notice if employed two years or more.

Outside the mass termination context, the situation is more nuanced. If the employee simply stops showing up during the working notice period, they may forfeit the remaining notice entitlement. The employer's obligation to provide notice is satisfied by the notice actually served — if the employee voluntarily leaves before the notice period expires, the employer's obligation is typically reduced accordingly.

However, if the employee leaves because the working conditions have become intolerable — for example, because the employer has constructively dismissed them during the notice period — the employee may be entitled to the full notice period as if no working notice had been given. In Farber v. Royal Trust Co., [1997] 1 SCR 846, the Supreme Court of Canada held that a constructive dismissal occurs when the employer unilaterally makes a substantial change to a fundamental term of the employment contract.

Applying this to the working notice context: if the employer provides eight weeks of working notice but at week three dramatically changes the employee's role, the employee can treat the change as a constructive dismissal and claim the full eight weeks (or more, at common law) as damages.

The Interaction with Statutory Notice

Working notice satisfies both ESA statutory notice and common law reasonable notice — but the math requires care.

Suppose an employee is entitled to eight weeks of statutory notice under the ESA and twelve months of common law reasonable notice. The employer provides twelve weeks of working notice. The ESA obligation is satisfied (twelve weeks exceeds eight weeks). But the common law obligation is not — twelve weeks is far short of twelve months. The employee would be entitled to damages equal to the difference: approximately nine months' pay.

The employer can provide the entire common law notice period as working notice. But doing so requires maintaining the employee's full terms and conditions for the entire period — which, for a senior employee entitled to 18 or 24 months of notice, may not be practical.

More commonly, employers provide a combination: some period of working notice, followed by a lump-sum payment for the remainder. This is expressly permitted under the ESA (which allows a combination of notice and pay in lieu) and is the standard approach at common law.

Vacation During Working Notice

The ESA contains a specific rule about vacation during the statutory notice period: an employer is not allowed to schedule an employee's vacation during the statutory notice period unless the employee, after receiving written notice of termination, agrees to take vacation during that period.

This means the employer cannot give an employee twelve weeks of working notice and then say "and by the way, three of those weeks are your vacation." If the employee agrees to take vacation during the notice period after being informed of the termination, that is permissible. But the employer cannot unilaterally impose it.

At common law, vacation time generally does not reduce the notice period unless the employee has agreed to it. In Stolze v. Addario, 2017 ONSC 2532, the court addressed the calculation of damages during the reasonable notice period and confirmed that vacation entitlements continue to accrue during the notice period.

Working Notice and Mitigation

One significant advantage of working notice for employees is its interaction with the duty to mitigate. When an employee receives pay in lieu of notice, they have an obligation to mitigate their damages by seeking alternative employment. If they find a new job during the notice period, the employer may be able to reduce the damages owed.

During working notice, the mitigation issue is different. The employee is still working — they are satisfying their employment obligations. They are not obligated to job search during working notice (although most do). And the employer cannot argue that the employee failed to mitigate by not seeking alternative employment during the working notice period.

This changes the strategic calculation. From the employer's perspective, working notice is cheaper than pay in lieu only if the employee does not find a new job and leave early. If the employee resigns during the working notice period to start a new position, the employer saves the remaining balance. From the employee's perspective, working notice keeps their income flowing and gives them the credibility of being currently employed when applying for new positions.

The Temporary Work Exception

The ESA includes an unusual provision that is often overlooked: after the termination date specified in the notice, the employer can provide temporary work for up to 13 weeks without creating a new employment relationship or triggering new notice obligations. If the temporary work extends beyond 13 weeks, however, the employee is entitled to a fresh notice period as if the original notice had never been given.

This provision gives employers flexibility — for example, keeping a terminated employee on for a few weeks to finish a project or train a replacement — without inadvertently restarting the termination clock.

Common Mistakes Employers Make

Based on the case law, these are the most frequent errors employers make with working notice:

1. **Providing oral notice instead of written notice.** The ESA requires written notice. Oral notice does not start the clock.

2. **Reducing the employee's hours or duties during the notice period.** This violates the ESA and renders the notice defective.

3. **Announcing the termination in a humiliating way.** Walking an employee to their desk with a security escort and announcing "your last day is in six weeks" may make the working conditions unreasonable.

4. **Failing to maintain benefits.** The ESA requires continued benefit contributions during the statutory notice period.

5. **Imposing vacation during the notice period without consent.** This is expressly prohibited by the ESA.

6. **Providing insufficient notice length.** Working notice must meet or exceed the statutory minimums — and, if no enforceable termination clause exists, must address the common law reasonable notice entitlement.

The Bottom Line

Working notice is a legitimate and often sensible way to manage a termination. But it is not a shortcut. The employee must be maintained in their full role, at their full pay, with their full benefits, performing meaningful work, for the duration of the notice period. Any deviation from this standard risks invalidating the notice entirely — leaving the employer back at square one, owing the full notice period as a lump-sum payment.

For employees, working notice is generally preferable to pay in lieu: you stay employed, you keep your benefits, and you job search from a position of strength. But know your rights. If your employer is using the notice period to marginalize you, strip your duties, or make your life miserable, the working notice may not be valid — and you may be entitled to significantly more than what is on the table.