At some point, an employee may decide to leave their position, whether that is for a new role, a career change, or retirement. Employees will typically provide a formal resignation letter to express that they are leaving their position. However, in some cases, depending on the circumstances, the resignation may not be clear enough to be a valid resignation. For instance, in the case we will discuss below, English v. Manulife Financial Corp., 2019 ONCA 612, the court found that the employee’s resignation letter was not clear and unequivocal, and she was entitled to withdraw it. As a result, the case was considered a wrongful dismissal, and the employer was required to pay the employee pay in lieu of reasonable notice.
This post explores the factors determining whether a resignation letter is valid and the circumstances under which an employee may be allowed to withdraw their resignation. We will examine the English case as an example of what can happen if a resignation letter is found to be withdrawn. We aim to provide key takeaways for employees and employers about their rights and responsibilities when an employee resigns.
What makes a resignation valid?
Generally, a resignation letter is considered valid if it clearly and unequivocally expresses that the employee is resigning. This means there were no circumstances in which the employee could withdraw their resignation. It must be clear that the employee intended to resign.
The court can also consider any circumstances outside of the letter that suggest that the resignation was not final and could be withdrawn. In particular, the court can assess evidence of the employee’s conduct after the resignation to determine if there was an intention to resign. The standard is determining if a reasonable person, considering the circumstances, would objectively conclude that the employee intended to resign.
If an employee’s conduct is out of character and did not resign in writing or verbally, this kind of resignation may be invalid. For example, if the employee worked with the employer for many years and did not return for a few days, this may not be considered a clear and unequivocal resignation.
When can a resignation be withdrawn?
Whether a resignation can be withdrawn depends on the case’s specific circumstances. Generally, suppose a condition must be satisfied before the resignation is effective. In that case, it may be possible for the employee to withdraw a resignation before that condition is fulfilled. An employee may also be able to withdraw their resignation before the employer accepts the resignation.
If an employee suddenly resigns and is highly unlikely to do so (they held a significant role in the company), the court may find that a reasonable employer may have provided the employee with a cooling-off period before assessing their intentions of resigning.
What are the consequences of a withdrawn resignation?
If a resignation is found invalid or withdrawn, then the employer may be liable for the employee’s wrongful dismissal. This would mean they may need to pay the employee in place of reasonable notice for wrongful dismissal. In these scenarios, the court would need to determine the length of the notice period to which the employee was entitled.
In the English case, the court found that the employer was liable for $128,000 as 12 months’ salary to the employee.
The employee worked for the employer for approximately ten years as a senior customer relationship manager. She was 64 years old when her employment ended. After acquiring the company, the employer announced that they would be transitioning to a new computer system. The employee considered retiring early from her role, as she did not want to learn the new computer system. She also thought it would be a loss of resources to re-train her to use the new system.
The employee provided a letter to her supervisor stating that she would retire at the end of the year. She also expressed an interest in working part-time in the letter if that was available.
The employee also claimed that after she provided the letter to her supervisor, he said she could change her mind and rescind the resignation. The supervisor did not dispute this.
A few weeks after she submitted her resignation letter, the employer announced that they would not implement the new computer system. After this announcement, the employee advised her supervisor that she was withdrawing her retirement notice. The supervisor acknowledged her withdrawal, and the employee continued working.
After the employee’s withdrawal, the supervisor advised the human resources department of the rescinded retirement and sought instructions. A month later, the employer provided these instructions. Then, the supervisor advised the employee that the employer would not recognize that her retirement notice was withdrawn.
The employee then sent an email reminding the supervisor that he had advised her that she could change her mind about her retirement. She noted that since the employer was no longer converting to the new computer system, she wanted to continue working and rescinded her notice to retire. She also noted no indication of an issue with her retiring later, and she reiterated that she intended to work until the end of 2017 rather than 2016.
In response, the supervisor sent an email stating that the employer would honour her retirement notice, and she was later told not to return to work.
The court determined no wrongful dismissal at trial, as the employee had resigned. She appealed the decision.
The appeal court found that there was no unequivocal intention to retire. The court noted that the employee told her supervisor that she was unsure if she wanted to retire and that her only reason would be that the company was implementing a new computer system. Given that the supervisor stated that she could change her mind and did not notify her of any problem after she stated that she wanted to continue working until 2017 rather than 2016, the court found that her resignation was equivocal, and the employer condoned this. When the company was no longer implementing the computer system, the basis for her resignation no longer existed. The employer was found to be bound by the supervisor’s promise that the employee could rescind her resignation.
When there has been a resignation, the court will consider the circumstances of the case to determine if the resignation was valid. Employees and employers should carefully consider their positions and act accordingly in light of a potential resignation.
Contact Haynes Law Firm in Toronto for Advice on Resignations and Wrongful Dismissal Claims
Employers and employees should carefully consider whether an employee has formally resigned. If the circumstances suggest that the employee has not resigned, there may be a wrongful dismissal, and employers may need to provide pay in lieu of reasonable notice. Our experienced employment law legal team at Haynes Law Firm in Toronto can assist you with issues that arise from termination. For employees, our goal is to ensure that they understand their rights and receive maximum compensation in wrongful dismissal cases. Haynes Law Firm also assists employers in avoiding liabilities that may arise from terminations not permitted by the legislation. We are dedicated to finding the best resolution for you.
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