Trial court found employer didn’t have to allow rescission of retirement notice; Appeal court found notice was contingent on circumstances
.jpg)
The Ontario Court of Appeal has overturned a lower court’s finding that an insurance company employee was bound to her retirement notice and couldn’t change her mind after circumstances at work changed. As a result, the employer’s insistence on holding the employee to her notice has cost it wrongful dismissal damages worth one year of the employee’s salary and benefits.
Elisabeth English, 67, was a senior customer relationship manager for group savings and retirement at an Ontario branch of Standard Life, an insurance company based in Montreal, starting in March 2006. Nine years later, in 2015, Standard Life was acquired by another insurance company, Manulife Financial Corporation.
Soon after the merge, Manulife informed its employees that its customer information would be converted to a new computer system beginning in January 2016 and progressing over time until completed.
Since English was 64 years old at the time, she didn’t think it would be worth it to try to learn an entirely new computer system when she was getting close to retirement — she planned to retire at the end of 2017 — and she wasn’t sure she would be able to learn the new system. She told her supervisor on Sept. 22, 2016 that she was planning on retiring early before the new computer system was implemented. When her supervisor asked her if she was sure, she replied, “not totally.”
However, English followed through, giving her supervisor a typed letter stating she was giving formal notice of her retirement effective Dec. 31. She noted that she would be open to working in a part-time position two or three days per week if it was possible but understood if it wasn’t an option.
When she handed her supervisor the letter, he told her that if she changed her mind, she could rescind the notice of retirement. However, soon after, she agreed that he could announce her impending retirement at a staff meeting.
New computer system cancelled
Less than three weeks after English gave her retirement notice, on Oct. 11, Manulife announced that it would not be going ahead with the conversion to the new computer system. The next day, English told her supervisor that she wanted to withdraw her notice of retirement because of the change in Manulife’s plans. The supervisor acknowledged her desire and relayed the information to Manulife’s human resources department.
The human resources department didn’t respond for nearly one month, but it eventually advised the supervisor that the company would not accept the rescission of English’s retirement notice. The supervisor informed English of this on Nov. 25, to which English reminded him that he had told her she could rescind if she changed her mind. She also made clear that the new computer system was the only reason for her decision to retire, so there was no need for her to do so with the transition being suspended indefinitely.
English’s supervisor responded with a Dec. 1 email saying that Manulife was “honouring” her retirement notice. Eleven days later, she was told not to come back to work. She then filed a complaint for wrongful dismissal demanding payment of 16 months’ salary in lieu of notice.
The Ontario Superior Court of Justice found English’s letter of retirement was a clear and unequivocal notice of her decision to retire — she typed it up herself and handed it to her supervisor, and there was no evidence there was any persuasion for her to make the decision. The court also found that while the supervisor had told her she could rescind her notice of retirement during the Sept. 22, 2016 meeting, there was no indication the offer to rescind was valid all the way up until her intended retirement date of Dec. 31. In addition, the supervisor accepted her notice by the end of that meeting, said the court.
The court also found that the supervisor did not formally accept her rescission a few weeks later and English didn’t formally notify Manulife that she had changed her mind — which was important since the company had initiated plans to go into effect upon her retirement.
The court determined that English’s notice of retirement on Sept. 22, 2016 was a clear and unequivocal “offer by (English) to retire as an employee effective Dec. 31, 2016” and this offer was accepted by her supervisor. Once accepted, the offer became a binding contract between English and Manulife, the court said.
Employee could rescind notice
However, English appealed and the Ontario Court of Appeal saw things differently.
The Court of Appeal disagreed with the lower court’s finding that the retirement notice was unequivocal — English made it clear that her decision was prompted by the circumstances around implementation of the new computer system. Her notice was equivocal — subject to different meanings — and she was entitled to withdraw it when the circumstances changed, said the appeal court.
The appeal court noted that English initially told her supervisor that she wasn’t sure and the supervisor said she could change her mind — which she did as soon as she learned the circumstances around the new computer system had changed.
“When Manulife cancelled the computer conversion within three weeks of her Sept. 22, 2016 conversation with (her supervisor), the basis for (English’s) resignation disappeared,” the Court of Appeal said. “(Manulife) is bound by (the supervisor’s) promise to (English) that she could change her mind. She did so within three weeks and her change of mind was not challenged.”
The appeal court determined that English did not resign from her employment and she was wrongfully dismissed on Dec. 12, 2016, when she was told not to come back to work — nearly three weeks before her stated retirement date in her letter.
In the trial, the lower court determined that had English been wrongfully dismissed, she would be entitled to 12 months’ salary in lieu of notice based on her decade of service with Manulife and Standard Life and managerial position at the time of her dismissal. The Court of Appeal agreed with this assessment and ordered Manulife to pay English 12 months’ salary and benefits as damages for wrongful dismissal.
For more information see:
• English v. Manulife Financial Corporation, 2019 ONCA 612 (Ont. C.A.).
