Repudiation of an Employment Contract: When an Employee Refuses to Work the Notice Period (Adrain v. Agricom International Inc.)

Introduction

When used right, working notice is a mutually beneficial and effective way to end the employment relationship. On the one hand, it gives the employee time to find a new job while receiving their salary and benefits. On the other hand, it gives the employer time to find a replacement and transition responsibilities.

But what happens if an employee refuses to work their notice period? The Supreme Court of British Columbia (the “Court”) in Adrain v. Agricom International Inc., 2025 BCSC 1842 (CanLII) (“Adrain”) provides some good news for employers.[1]

Background

Ms. Adrain (the “Plaintiff”) was employed by Agricom International Inc. (the “Defendant”). The Plaintiff’s lawyer sent a letter to the Defendant stating that the Plaintiff wanted to work while the company was winding down and wanted severance pay in lieu of 24 months’ notice of termination. The Defendant replied offering 13 months’ notice. The Plaintiff’s lawyer asked the Defendant to reconsider, but the Defendant did not reply. Shortly after, the Plaintiff commenced a wrongful dismissal action against the Defendant during her working notice period.

The Defendant sent a letter alleging that the Plaintiff repudiated (i.e., refused) her employment by sending demand letters and commencing litigation while working, and her actions amounted to just cause for dismissal. The Plaintiff’s employment was terminated that same day, but the Defendant agreed to pay her salary and benefits for a few months. 

No Just Cause to Dismiss the Employee

The Court found that the Defendant did not have just cause to terminate the Plaintiff’s employment.

It was not reasonable for the Defendant to be “shocked” by the demand letters.[2] The demand letters negotiated the Plaintiff’s end of employment, which can take place as the employment relationship continues. The Court also considered the innate employer-employee power imbalance, the Plaintiff’s discipline-free and long-term employment, and the Plaintiff’s decision to retain legal counsel to help her communicate with the Defendant.

Further, it was not reasonable for the Defendant to treat the employment relationship as “incompatible” while the employee commenced litigation.[3] The litigation began only after the Defendant notified the Plaintiff of her dismissal without attempting to negotiate her compensation, and the pleadings were candid. The Court also considered that the Plaintiff was open to work during her notice period and the litigation was in the early stages at the time of termination. 

The Plaintiff’s Conduct Constituted Contractual Repudiation

The Court found that the Plaintiff commencing a wrongful dismissal action against the Defendant while on working notice constituted a repudiation (i.e., refusal) of her employment contract. As a result, the Plaintiff could not work the remaining 11.5 months of her working notice, which thereby reduced the wrongful dismissal damages owed to her. 

The Wrongful Dismissal Damages

The Plaintiff was initially entitled to a total of 24 months’ reasonable notice, but the Court deducted:

  • 11.5 months because she only worked 1.5 months of the 13 months’ working notice;
  • 1-month because she had a strong employment record and credentials; and
  • 4.5 months because the Defendant agreed to provide her salary and benefits from the date of her termination notice in April until the end of September.

Ultimately, the Plaintiff was entitled to just 7 months’ worth of damages for loss salary and benefits.

Final Takeaways

It is important for employers to be aware of these deductions to structure separations that are mutually beneficial while limiting their exposure. As Adrain suggests, the damages owed for wrongful dismissal may be reduced if an employee commences litigation during their working period and consequently repudiates their employment contract.

Since Adrain is a British Columbia decision, Ontario employers with payroll in excess of $2.5 million annually will also need to account for statutory severance obligations, which must be paid as a lump sum unless specifically agreed to in writing.

If employers have any questions on what to do when an employee commences litigation during their working notice, it is recommended to seek legal advice.

This article is not intended to serve as a comprehensive treatment of the topic and is not legal advice. All legal matters are dealt with pursuant to their specific facts and circumstance. Nothing replaces retaining a qualified, competent lawyer.

 

[1] Adrain v Agricom International Inc., 2025 BCSC 1842 (CanLII) (“Adrain”)

[2] Adrain at para 54

[3] Adrain at para 56

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