Publisher's Desk|Canadian HR Law|HR Policies & Practices|Employment Law|The C-Suite|HR Guest Blog

Changing the resignation tune after the song is recorded

Employers must take steps to confirm an employee’s intent to resign or retire, but once confirmed and accepted, it’s a done deal
employment law
A recent case before an Ontario court demonstrates that once an employee and an employer agree on a retirement arrangement, they’re bound to it unless they both agree to scrap it. Shutterstock

By Jeffrey R. Smith

People decide to leave their jobs for various reasons — they have a better opportunity, they don’t like their job anymore, or they just want a change can be some of the motivations — or, if they’re older and financially secure, they might decide it’s time to retire and start the next phase of their life.

Regardless of someone’s reason for leaving, it’s advisable that, before the final decision is made and the employer is informed, the individual is 100 per cent sure that it’s the course of action she wants to take.

There have been many cases involving the end of employment relationships where there’s a dispute over who actually ended things — did the employee quit or did the employer dismiss the worker? A lot can ride on determining who made the move to terminate, as in the latter circumstances, the employer probably has to provide reasonable notice of termination — or pay in lieu of — plus possible severance pay and benefits continuance. If the employee resigned of her own accord, then that’s that. It’s over.

It's been established in Canadian employment law that if it was the employee who resigned, then there must be a clear and unequivocal demonstration of the employee’s intention to do so. Additionally, employers usually have to allow for a cooling off period if it’s obvious the employee’s stated desire to quit was emotionally driven or other factors could have affected the employee’s decision.

However, if the employee’s intention is clear — especially if there is a formal, written letter of resignation — once the employer accepts the resignation, the parties are bound to it unless they mutually agree to change things. For example, if an employee changes his mind after making a clear and official decision to resign — that an impartial, reasonable observer would view as legitimate — that the employer formally accepted, the employer is under no obligation to rescind the resignation. It is free to do so if it wants the employee back, but it doesn’t have to. This applies to retirement decisions as well.

A recent case before an Ontario court demonstrates that once an employee and an employer agree on a retirement arrangement, they’re bound to it unless they both agree to scrap it. The employee — who was in her 60s, decided to retire when the company announced it would be introducing a new computer system, as she didn’t want to learn the new system.

When she told her supervisor, he asked her if she was sure and said she could change her mind while they discussed it in a meeting. However, the employee reiterated her intention to retire and provided a notice of retirement she had typed up herself indicating a retirement date three months later. The supervisor accepted it and the company began planning for after she left, including moving around some of her subordinates and caseload. The employee also consented to the company announcing her retirement at staff meeting.

Three weeks later, the company announced it wouldn’t be implementing the new computer system anytime soon. The employee decided she didn’t want to retire after all and told her supervisor. However, the supervisor couldn’t confirm acceptance of her rescission and she didn’t formally request that the company scrap her retirement notice. The company — which was well into its reorganization plans for when she left by then — advised the worker it would still be honouring her notice of resignation.

When the employee sued for wrongful dismissal, the court found her notice of resignation and retirement was clear and unequivocal — there was no doubt of her intention given her verbal notice, written notice, and announcement to co-workers. Once the company accepted this notice, the retirement notice became a binding agreement between them, and it could only be rescinded if both sides agreed to do it.

When the employee wanted to rescind her retirement notice, the company was already making arrangements it had set in motion and didn’t want to upset the cart, so it stuck to the agreement — to which it was entitled, said the court in dismissing the wrongful dismissal claim: see English v. Manulife Financial Corporation, 2018 CarswellOnt 14425 (Ont. S.C.J.).

When an employee decides to leave his employment, it`s important to ensure that is his intention — the inherent power imbalance in the employment relationship demands employers must confirm that is the case. However, once there’s no doubt of the employee’s intention, the time to change one’s mind is past — unless both the employee and the employer agree to the flip-flop.

© Copyright Canadian HR Reporter, Thomson Reuters Canada Limited. All rights reserved.

Jeffrey R. Smith

Jeffrey R. Smith is the editor of Canadian Employment Law Today, a publication that looks at workplace law from a business perspective.
CLICK TO COMMENT ON THIS BLOG POST
(Required)
(Required, will not be published)
(Required)
All comments are moderated and usually appear within 24 hours of posting. Email address will not be published.