When an employee resigns, they leave their employment often to take up a new position or enter retirement. When an employee does so, they lose their ability to claim certain entitlements, such as a reasonable notice period.
This article looks at how to determine whether an employee has resigned, along with a recent decision of the Ontario Superior Court of Justice, where an employee walked off the job after a disagreement with her manager.
Resignation versus termination
Both employer and employee are generally entitled to terminate an employment contract of indeterminate length. When the employee does this, it constitutes resignation. On the other hand, when the employer ends the relationship, it is called termination.
The characterization matters. If an employee is terminated by their employer, they are entitled to the payment of reasonable notice under the Ontario Employment Standards Act and potentially the common law. The employee can bring an action for wrongful dismissal to enforce this right.
However, an employee does not have this entitlement in the event of voluntary resignation.
Resignation needs to be clear and unequivocal
Because of this important difference, resignation by an employee must be unequivocal, objectively reflecting an intention to resign. When viewing the matter objectively, resignation does not need to be made in writing, but a reasonable person needs to understand that the employee resigned.
Notably, an employee might be found to have resigned if they have repudiated their employment contract, which means they refuse to perform an essential part of their duties. The employer can accept this repudiation, ending the employment relationship.
Plaintiff claimed wrongful dismissal; employer argued she had resigned
In Scull v Ensemble Travel Ltd., the plaintiff employee brought an action for wrongful dismissal following an alleged termination. The defendant’s employer claimed that she had resigned instead.
The defendant is an organization of travel agencies which offers its members services and tours. The plaintiff started working for the company in the Toronto office in 2009. She was a marketing and production manager in charge of a destination wedding program.
Plaintiff testified that she was terminated after a dispute with her manager
The plaintiff had asked for the responsibility of the destination wedding program to be assumed by others, noting that she was occupied with other duties.
A call was set up with senior management. The plaintiff brought up the wedding program issues, and after an awkward silence and no response, she was upset, experienced an anxiety attack, and asked her manager to book her off sick for the remainder of the day. She accused her manager of having “thrown her under the bus” and claimed that she said actions like this “made her want to resign.”
She returned to the office the next day and met with the defendant’s vice president of human resources. The latter said that the manager had told her that the plaintiff had resigned, and the plaintiff denied this. The plaintiff later sent an email apologizing for her remark about wanting to resign.
The plaintiff missed two days of work after suffering vertigo. She returned to the office and told the vice president she would consider staying if she did not need to report to her manager. She claimed the vice president texted her to say it was her last day.
Employer claimed that the plaintiff resigned after the incident and subsequently confirmed the resignation
The manager testified that the plaintiff said she was resigning after the call. The vice president also said that she confirmed this at their meeting. She wanted to avoid the increasing emphasis on working in a team setting. The vice president encouraged the plaintiff to consider her resignation for a couple of days.
The vice president confirmed that the plaintiff demanded that her manager be substituted for another leader. The vice president said this was not feasible, so her resignation stood. After the plaintiff hung up on the conversation, the vice president confirmed the employer’s acceptance of her resignation and notified her that her benefits would be discontinued.
Court preferred the evidence of the employer’s witnesses
Justice Brown had to determine whose version of events to believe. Her Honour found the plaintiff’s evidence “problematic,” observing that she was defensive and gave inconsistent answers.
After the incident, the court decided that the plaintiff told the vice president that she was resigning after having considered doing so for a long time. The statements and conduct expressed an intention to resign.
The plaintiff resigned and was not terminated
Justice Brown explained that:
“The jurisprudence has long established that the giving of an ultimatum by an employee, by which the employee refuses to perform work unless certain conditions are met, is incompatible with their continued employment, and constitutes a resignation.”
Her Honour agreed with the employer that the plaintiff gave two options – rescinding her resignation if she was given a change in reporting structure or she would leave. As a result, it could also be found that the plaintiff resigned due to this ultimatum.
The court decided that the plaintiff expressed a clear intention to resign and that a reasonable person viewing the matter objectively would reach the same conclusion. The employer accepted the resignation, paying her the outstanding wages and accrued vacation time. As a result, the court dismissed the plaintiff’s claim.
Contact Haynes Law Firm in Toronto for Guidance on Employee Termination and Resignation
The Haynes Law Firm helps employers and employees with all their employment law needs. The firm helps employers manage the risk of litigation by appropriately dealing with employee resignation threats. The Haynes Law Firm also assists employees that have been forced to ‘resign’ to obtain all of the legal entitlements to which they are owed. Please contact us by filling out our online form or calling us at 416.593.2731 to arrange a confidential consultation to discuss your employment law issue.