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Don’t Accept a Resignation Too Quickly

Imagine that you find yourself in a heated argument with one of your employees and, having apparently had enough, the employee announced that he is fed up enough and is done with the company. He then handed you his pass card and stormed out of the office. Can you proceed on the basis that he has resigned?

Now imagine that he calls you later that day, or even a few days later, apologizes and explains that he regrets letting his emotions get the better of him and that he wants to come back. Do you have to take him back?

Evans v. Avalon Ford Sales (1996) Ltd. – Don’t Accept a Resignation Too Quickly

One Maritime company recently learned that in many cases, you do have to take him back. Just because an employee states that they are resigning, or words to that effect, does not necessarily mean that the relationship is over. Our employment laws, and the duty of an employer to act in good faith, will often mean that hasty resignations will not be effective, and employers should not refuse to allow the individual to retract their resignation without further consideration.

In Evans v. Avalon Ford Sales (1996) Ltd., [2017] N.J. No. 41, the evidence was that the Plaintiff worked for the Defendant car dealership for approximately thirteen years. When the relationship ended, he was the Commercial Fleet Manager, reporting to the General Sales Manager and the owner. Apparently, he made an inventory control error which caused a delay in payment, and this led to a difficult meeting with the owner and the General Sales Manager. He experienced a stress reaction and went home, returning to work later that evening. At that time, he gave in his keys, announced that he was done, and left.

The Plaintiff had second thoughts and tried to call the owner, but his calls went unanswered. Four days later, they met and the owner berated the Plaintiff for “deserting” the dealership. The Plaintiff, who had sought medical treatment due to the stress he was suffering, asked for a medical leave of absence and produced a doctor’s note in support of his request. However, the doctor ripped up the note and told the Plaintiff to get out.

Subsequently, the Plaintiff brought a wrongful dismissal claim and alleged that his resignation was involuntary and equivocal, and that the company effectively dismissed him by refusing to allow him to return. The trial judge considered the evidence and agreed with the Plaintiff. This portion of the judgment is instructive in showing how courts will assess such circumstances:

[77]        The onus of proof that the employee voluntarily resigned is on the Defendant (Harris at 3-13 and Pacific West Systems Supply Ltd. v. Vossenaar2012 BCSC 1610 (CanLII) at para. 78).

[78]        The test for resignation has subjective and objective components.  Did he intend to resign and did his acts and words, objectively viewed, support a finding that he resigned? (Beggs v. Westport Foods Ltd.2011 BCCA 76 (CanLII) at para. 36).

[79]        Hill, J. in Gebreselassie at para. 43 states the following:

43. A valid and enforceable resignation must be clear and unequivocal — to be clear and unequivocal, the resignation must objectively reflect an intention to resign, or conduct evidencing such an intention: Kieran v. Ingram Micro Inc.2004 CanLII 4852 (ON CA), [2004] O.J. No. 3118(Ont. C.A.) at para. 27; Danroth v. Farrow Holdings Ltd., [2005] B.C.J. No. 2674 (B.C. C.A.) at para. 8; Rousell v. Prairie Implement Manufacturers Assn. (1992), 1992 CanLII 8069 (SK QB), 44 C.C.E.L. 243 (Sask. Q.B.) at 247-9. Whether words or action equate to resignation must be viewed contextually — the totality of the surrounding circumstances are relevant to determine whether a reasonable person, viewing the matter objectively, would have understood the employee resigned: Kieran, at para. 30; Dragone v. Riva Plumbing Ltd.2007 CanLII 40543 (ON SC), [2007] O.J. No. 3710 (Ont. S.C.J.) at para. 3; Maguire v. Sutton, [1998] B.C.J. No. 138 (B.C. S.C.) at para. 47.

 [81]        Viewed objectively, these facts suggest that the Plaintiff resigned.  Subjectively, the evidence also supports the conclusion that this was the Plaintiff’s intention, at that moment.

[82]        However, my conclusion respecting the Plaintiff’s resignation does not end the enquiry.  As Hill, J. states in Gebreselassie at paras. 49 and 50:

49       … a resignation during a spontaneous outburst in highly charged emotional circumstances can undermine its essential voluntariness: Maguire, at para. 44, 28; Widmeyer v. Municipal Enterprises Ltd. (1991), 1991 CanLII 4413 (NS SC), 36 C.C.E.L. 237 (N.S. T.D.) at 246-7. As well, in some cases, an employee’s conduct is sufficiently equivocal that it cannot be objectively construed as voluntary resignation: Widmeyer, at 247; Cranston v. Canadian Broadcasting Corp. (1994), 1994 CanLII 7408 (ON SC), 2 C.C.E.L. (2d) 301 (Ont. Gen. Div.) at 308-9. …

50       … an employee may resile from a resignation provided the employer has not relied upon it to its detriment (Kieran, at 34;Tolman v. Gearmatic Co. (1986), 1986 CanLII 1212 (BC CA), 14 C.C.E.L. 195 (B.C. C.A.) at 201), this factor is irrelevant on this record because the plaintiff maintains that he did not resign.

[94]        On the evidence as a whole, I conclude therefore that Mr. Evans’ resignation cannot be characterized as unequivocal.  The Defendant has not met the onus of proving that the Plaintiff resigned.

[95]        Had I found the Plaintiff to have voluntarily resigned, I acknowledge that he would then be entitled to argue that he was entitled to a reasonable period to change his mind and that the employer had an obligation to make enquiries…

The Court also noted that “Mr. Evans did not say that he resigned and did not write a letter of resignation to his employer.  Instead, he used words such as ‘I’m done’ and ‘I can’t deal with this anymore’”.

Further, the court held that the Defendant breached its duty of good faith and fair dealings when it refused to allow the Plaintiff time to cool off and when it refused to allow him to retract the resignation. At the very least, the court found that the Defendant displayed a careless disregard for Evans, breaching an implied term of their contract. Interestingly, the court took into consideration the fact that if the Plaintiff had continued working, his role would have been reduced due to his medical condition. As a result, the damages for wrongful dismissal were based on a reduced salary.

The bottom line is that our courts do not want to see employers take advantage of an employee that has resigned in haste or due to an emotionally charged situation. If the reality is that the employer will suffer no prejudice by allowing the person to come back, then they will be expected to. If sufficient time has gone by that the employer has, legitimately, replaced the employee, then that will be a different story. However, that is not usually the case if the employee rescinds the resignation within hours or a day or two. Courts do not want employers to be opportunistic in such circumstances. As the case referenced above illustrates, doing so can be quite costly, and effective expose the employer to the same damages that they would be liable for if they had dismissed the individual without notice.

When we are consulted by a client that has had an employee resign, the first thing that we tell them to do is obtain written confirmation of resignation. Sometimes, the employee has already provided this, although even in those circumstances, they may be able to change their mind. However, if the entire discussion was verbal, then we will have our client write to the employee and confirm the resignation. If the employee remains silent, it will be difficult for them to subsequently argue that they had not really resigned. Conversely, if the employee responds and indicates that they did not really intend to resign and want to return, then at least we’ll know the situation we are dealing with, and can develop an appropriate response.

Like many other aspects of employment law, the laws regarding resignation can be more complicated than one might think. Even when an employee says “I quit” in writing, that is not necessarily the end. The resignation might have been clear, but it might also have been given in haste or in other circumstances where a court will find that the employee should not be held to it. Remember, our employment laws are designed primarily to protect employees, and in many cases, they will be given the benefit of the doubt. Unless the employer can prove that they will be prejudiced by allowing the employee to return, they will usually be expected to do so.

Whether you are an employer or an employee faced with such a situation, your best bet will always be to call an employment lawyer.


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