An employee who resigns, verbally or in writing, may ask to ‘take back’ his or her resignation. This creates an issue for the employer, of course, particularly if the resignation is a welcomed outcome to the relationship. Ontario law says that an employer may be obliged to allow an employee to withdraw or retract a resignation depending on the circumstances.
Below are the key considerations for when an employee resigns and whether that employee will be held to be bound by his or her own act:
Is the Resignation Valid (At Law)?
Firstly, the Court will consider if the resignation is properly given and valid.
Generally, when considering whether a resignation is validly made by an employee, the Court will consider whether, in all of the circumstances and the context in which it is given, would a reasonable person have objectively concluded at the time that the employee both intended and meant to resign? In other words, the legal test is, effectively, whether the employee really meant to resign in all of the circumstances.
To be valid, a resignation must be clear, unambiguous and not shrouded in complaints, concerns or conditions by the employee. Preferably resignations will be in writing, but they can also be established by conduct of the employee clearly demonstrating intent to quit or resign at the time. For example, the employee may verbally quit, then immediately leave the workplace taking his or her personal belongings, or otherwise demonstrating intent to leave and not return.
So, is it a clear and unambiguous resignation? If given verbally, this may be problematic, of course. If it is in writing, does it clearly verify the employee is resigning, without also suggesting he or she is doing so because of mistreatment, pressure, stress or related in any way to alleged discrimination or breach of a protected ground under the Ontario Human Rights Code, for example?
If the resignation could potentially be considered by a third party, objectively, as merely expressing dissatisfaction, or as merely a threat to resign or an offer to resign if asked to do so, it may not qualify or be enough to be held as a valid resignation. If it is truly an offer to resign only, it could be revoked by the employee at law, even if it is accepted by the employer. Therefore, the resignation must be straightforward, clear, not subject to any conditions and not ostensibly embroiled with or attached to complaints or concerns by the employee at the time.
What’s more, if there is evidence of a ‘heat-of-the-moment’, reactionary decision, or of duress or other emotionally charged decision-making at the time, the Court may not hold the employee to the resignation.
Timing can also be a key factor. If the employee resigns, particularly in emotional or ‘heat-of-the-moment’ circumstances, but reasonably soon afterwards attempts to withdraw that decision, the Court is more likely to find the resignation invalid. Generally, the longer the time period between the resignation and the withdrawal, the more likely it will be that the Court upholds the initial resignation.
Should the Employer Respond to the Resignation?
Employers’ responses to resignations can be important.
If the employer believes the resignation is valid, or potentially valid, employers should provide the resigning employee with a written acceptance of the resignation. If an employer takes other steps, such as suggesting a meeting be arranged, or contacting the employee afterwards about the resignation or work-related discussions, they may be found by the Court to have engaged in conduct inconsistent with an acceptance of the resignation (i.e., potentially to encourage the employee to return to work, for example), which may invalidate an otherwise valid resignation on its face, particularly if the employee attempts to withdraw or retract the initial resignation.
Employers should also consider, before accepting the resignation in writing, if there are any circumstances or factors known to the employer that potentially could have influenced or caused the employee to resign, particularly related to the employee’s mental health, family circumstances, other sources of pressure in his or her life, or other circumstances that may have created unusual or undue stress or turmoil in the employee’s life. If so, the employer may have a duty to enquire about these with the employee before accepting the resignation, or before the resignation could be considered valid and final by the employer. If any of these factors may exist, the employer may need to consider offering assistance to the employee, such as a temporary absence from work, EAP benefits, if available, or other support services available in the workplace.
In 2014, the Supreme Court of Canada established the duty of good faith in contractual dealings and created a new general duty of honesty in contractual performance. That decision has found its way into employment law, too. As a result, the Court in Ontario will likely require employers to provide an employee with a “cooling-off period” to reconsider the employee’s resignation decision. Therefore, it is likely advisable for employers to offer this ‘cooling-off’ period and, if they do not, they may find themselves facing an additional claim for failure to abide by this new duty of honesty and good faith in performing employment arrangements.
However, cooling-off periods can be advantageous to employers, too.
For example, if an employee gives an ultimatum that the employee will resign if his or her conditions are not accepted by the employer, the employer should consider establishing a ‘cooling-off’ period, in writing, in response. If, after that period, the employee does not withdraw the ultimatum, it is more likely that the employer, if a written acceptance of the resignation is given to the employee at that expiry of the cooling-off period, will be able to establish that the employee validly resigned. If the ultimatum was clear and unambiguous and a sufficiently reasonable cooling-off period was given the employee, the employer is more likely to be successful in defending off a wrongful termination claim by the employee by establishing that a valid resignation was given and accepted.
Requirement to Accept a Withdrawal:
Generally, if the employee merely offers to resign, or if a resignation is not valid, employers should allow the employee to withdraw the offer (or invalid resignation), if the employee requests to do so reasonably soon afterwards, even if it was accepted by the employer when initially given.
If, however, the employer could demonstrate that they relied on the invalid resignation to their detriment, they may be able to successfully establish that they had no obligation to allow the employee to retract or rescind. For example, if the employer already hired a replacement, incurring time and expense to do so, the employer may be able to establish detrimental reliance sufficient to refuse the employee to rescind the resignation.
Five Best Practice Tips for Employers:
Employers should consider:
1. giving a ‘cooling-off’ period to an employee who resigns, or purports to resign, especially if there may be special circumstances, such as potential mental health-related issues, family issues or other potential sources of undue stress or pressure affecting the employee at the time;
2. requesting that resignations be given only in writing, if possible;
3. respond to resignations (in writing, ideally) with written acceptances, but only after considering if any special factors exist or may be known by the employer that potentially may have unduly influenced the employee’s decision to resign (including potential mental health-related issues);
4. avoiding any steps after receiving the resignation that may be viewed as non-acceptance of the resignation, like calling a meeting or telephoning the employee afterwards (or engaging in any verbal discussions with the employee); and
5. allowing an employee, if requested, to withdraw or retract a resignation, subject to further considering: a) the time that passed between the resignation and request to retract; b) any special circumstances regarding the employee; c) whether ‘detrimental reliance’ steps were already undertaken by the employer; and d) whether the resignation was accepted in writing previously.