Laws of resignation may favour employees

Date: 2007
Author: Daniel A. Lublin
Publication: Metro

Employers should clearly explain options

A resignation is a grave act; never performed by a right minded man without forethought or with reserve. – Salmon P. Chase
Canadian employees have no right to severance pay if voluntarily leaving their job.  They may claim this is unfair – but not so fast: the laws of resignation generally work in their favour.
Employees tendering their resignation are sometimes free to withdraw it and continue as before.  Just ask top-gun computer executive Andrew Kieran, who’s employer, Ingram Micro, proposed to accept Kieran’s “resignation” after he indicated that he wouldn’t work for a rival employee expected to take over the company’s presidency.  But the Ontario Court of Appeal resoundingly concluded Kieran was free to change his mind, as long as Ingram hadn’t acted to its own detriment by relying on his statements.
Even an obvious indication of an intention to resign does not make it so.  When, in a blaze of fury, Susan Lelievre demanded a severance package, fired off a number of emails announcing her last day of work, packed up her belongings and then left, her employer, AIG Insurance, concluded that she had resigned.  However, AIG made one fatal mistake:  Relying on Lelievre’s statements that she was leaving, management did not step in to outline her options.  Instead, the court ruled, by demanding the return of all company property, including keys and her office pass card, it effectively terminated her employment.  Employees should be given the benefit of time to consider their actions and asked to confirm their intentions in writing.  Lelievre had not been given that option.
A true resignation must not be given on impulse.  The law recognizes that spontaneously made statements may not constitute a valid resignation.  Neither should an employer seize upon the intemperate utterances of an emotionally charged employee. Therefore, an employee who proclaims “I quit” in the heat of the moment may have done anything but.
A resignation, to become effective, does not actually require the use of that very word.  The real test is whether an employee’s actions are consistent with someone voluntarily wishing to leave.  I currently have two such cases.  In one, the employee emphatically denies having uttered the words “I quit.”  In the other, she asserts that the employer wrongly attributed to her a statement indicating that she had resigned.  In both cases, the employees came to work the next day as if nothing unusual had happened.  The conclusion to their cases will be, I suspect, based not upon the words used by my clients but on their actions and conduct at the time that those words were said – and afterwards.  Nothing else ought to be dispositive.
Resignations arising from an ultimatum may be nothing more than a camouflaged termination.  Making ends meet selling used cars, Bradley Gallagher never paid much attention to the calculation of his commission payments.  But in 2003 Gallagher’s car dealership demanded that he sign a shady commission plan or face his immediate termination.  When Gallagher refused, the dealership said he had resigned.  The court decided otherwise.  A true resignation is a voluntary action.