Consider the following situation. A dentist (the employer) hires a consultant to evaluate the operation of his dental practice. In a report critical of the dentist’s business operations, the consultant recommends changes, which include removing some of the duties previously performed by the office manager (the employee). Shortly after learning of the recommendations, the office manager writes to her employer as follows:
“If your intention was to hurt and destroy me – you’ve done a good job. Because of you, and your wife, the consultant and your staff, you’ve all succeeded! I’m resigning immediately. Enclosed, is the key to the office.”
After the note and the key are delivered, the dentist indicates that he needs an explanation and arranges to meet with the office manager. A long and emotional conversation then ensues in the employee’s car. According to the dentist, the employee maintains her desire to resign during their conversation. The office manager on the other hand, states she was told to take a few days off and they would work things out. On that basis, the employee alleges that she withdrew her resignation. The following day, the employer advises his staff that the employee resigned. Upon learning what the staff had been told, the employee contacts the employer and is told, “I think we should part company.” The employee sued for wrongful dismissal.
There was no dispute that the office manager’s employment had come to an end. The legal issue was whether the employee had resigned her employment. What was at stake was entitlement to notice and Employment Insurance benefits. If the employee “resigned” she would not likely be entitled to notice or EI benefits.
At common law and under the Employment Standards Act, a resignation which is voluntary and is accepted by the employer terminates the employment relationship without any obligation on the employer to provide notice or pay in lieu.
Courts will find that a resignation has occurred only where the conduct in question is clear and unequivocal. A resignation will not be found simply on the basis of actions or words expressed by an employee in the “heat of the moment” and in response to highly charged emotional circumstances.
An indication from the employee that she is not satisfied with her employment and is looking for other work, or is thinking of quitting does not necessarily constitute a resignation. Similarly, a situation where an employee resigns, but soon thereafter withdraws the resignation will not likely constitute a resignation. This may be so even where an employer subsequently accepts the resignation.
The Courts and the Act also distinguish between a resignation which is voluntary and a refusal by an employee to accept a significant change made by the employer to the terms of employment, such as a significant demotion or a reduction in pay. In this case, the employment relationship may have been terminated by the conduct of the employer and not the employee’s resignation, and the employee’s right to notice and Employment Insurance may not have been extinguished.
Under the Employment Insurance Act, an employee will be disqualified from receiving benefits where he or she has voluntarily left their employment without just cause. “Just cause” will be found where the claimant had no reasonable alternative to leaving his/her employment given all the circumstances of the case. Some of the circumstances which will support a finding a “voluntary leaving for just cause” are set out in the Act.
Back to the example described above. Did the employ resign her employment? How did the Court rule?
The Court found that the circumstances of the case did not support a resignation, and the individual was entitled to damages for wrongful dismissal. The Court based its decision on the following:
(1) While the resignation was a product of an emotional and stressful time in the employee’s life, it was not a spontaneous outburst in circumstances which undermined the fact that it was tendered voluntarily. The delivery of the note and the key, taken alone, represented an unequivocal resignation by the employee;
(2) However, the employer did not accept the resignation. Rather, he wanted to discuss the matter further with the employee and such discussions took place;
(3) While the employee started to resign, she never unequivocally and clearly did so. Instead she agreed to meet with the employer to discuss the issues which gave rise to her concerns;
(4) When all of the circumstances surrounding the “resignation” and the conduct of the parties which followed are taken into consideration, the Court concluded:
“the plaintiff did not voluntarily resign from her employment.”
Given the very serious consequences which can befall an individual who resigns his or her employment, both in respect of entitlement to notice and EI benefits, those contemplating resignation are strongly urged to seek legal counsel before pursuing such action.