Accidental resignation

Courts are very clear when it comes to resignation — the employee’s intent must be unequivocal

When is a resignation actually a resignation? It’s a question that seems relatively easy to answer — if the employee says “I quit” and walks out the door, that sounds like a resignation.

But it’s not always that easy. Given the nature of an employment relationship, there are bound to be interpersonal issues which cause either the employer or the employee to feel strongly about something.

If it is the employee, he might express strong sentiments about his displeasure and indicate an unwillingness to put up with something. Often, employers have considered these types of sentiments to be a resignation and respond with a letter stating the resignation has been accepted.

But given that the Ontario Court of Appeal has stated a resignation must be clearly communicated by the employee, employers should think twice before jumping to that conclusion.

In Kieran v. Ingram Micro Inc. the Ontario Court of Appeal addressed the issue of whether or not Andrew Kieran had resigned or been dismissed. It also looked at, if he had resigned, whether or not he could withdraw that resignation before it was accepted.

Kieran had been with the company for seven years and was senior vice-president of purchasing. In December 1996 Ingram Canada’s president left the company and it began the search for a successor.

Kieran and another senior vice-president were the only contenders for the top position. Kieran said he could not continue to work at Ingram in Canada if the other candidate got the job. Kieran and the president of Ingram’s parent company came to an agreement that, if the other candidate got position, then the company would try and find a suitable job for Kieran with Ingram outside of Canada.

On May 15, 1997, the other candidate was appointed president. On June 5, Kieran changed his mind about leaving and told his employer he wanted to continue as senior vice-president of purchasing in Canada. Despite his personal feelings, he was committed to working with the new president. But the company didn’t see that as a viable option.

Ingram did not find an appropriate position for Kieran, and offered him a position that was a demotion. Two weeks after Kieran had rescinded his resignation, the company accepted it. Kieran brought an action for wrongful dismissal.

The original trial judge found Kieran’s statements were tantamount to a resignation, contingent on the occurrence of a future event. That future event — the success of the other candidate for the president’s position — happened and therefore the judge said Kieran resigned on May 15, the date the company announced the appointment of the new president.

That judge also said it would have been possible for Kieran to revoke his resignation after May 15 unless Ingram Micro had “acted to its detriment.” The judge said Ingram went to “considerable lengths” to find Kieran a job outside Canada, something that amounted to a detriment, and therefore Kieran was no longer able to withdraw his resignation.

Kieran appealed the decision to the Ontario Court of Appeal. The Court of Appeal said a resignation must be “clear and unequivocal” and that the resignation must objectively reflect an intention to resign or involve conduct that shows an intention to resign.

The Court of Appeal said both the words and actions need to be examined, along with their context, to determine, “whether a reasonable person, viewing the matter objectively, would have understood Mr. Kieran to have unequivocally resigned.”

The court found that at no time had Kieran indicated he intended to resign. Rather, he said that if the other candidate was chosen as president, he required an international transfer. The Court of Appeal found that even if Kieran had resigned, he could have withdrawn his resignation providing the employer had not relied upon it to its detriment, which in this case the court found it did not.

In Rinaldo v. Royal Ontario Museum, a decision that relied on Kieran, the Ontario Superior Court of Justice grappled with the issue of whether or not David Rinaldo had resigned after he failed to return from short-term disability leave.

Rinaldo joined the ROM after graduating from university in 1985 and was steadily promoted. In October 2000 he was appointed director of public programs. Prior to that he had been the subject of four grievances filed by a union, alleging a poisoned work environment had been created. Other complaints were made to human resources about the harsh management techniques of Rinaldo and a colleague. All four managers who reported to Rinaldo were dismissed or resigned.

On Oct. 23, 2001, Rinaldo was told he performed well for 14 years but that his performance in the previous six months was completely unacceptable. He was accused of being a bad manager and of insubordination. He was told his responsibilities would change, he would be reporting to a different person and the days he worked would need to be changed. He was told he was being placed on six months’ probation and if his performance didn’t dramatically improve he would be fired and given a six-month severance package.

Rinaldo said he felt overwhelmed by the allegations. A week later he met with his psychiatrist. He was diagnosed as suffering from severe stress. The doctor wrote a note saying Rinaldo required sick leave and would be re-assessed in two to three weeks.

The ROM initially challenged Rinaldo’s sick leave. It sent him a letter requesting more evidence of his medical condition and telling him without such documentation the leave would be without pay.

In early December Rinaldo’s psychiatrist wrote a letter stating Rinaldo had a major depressive disorder with high levels of anxiety. She recommended a medical leave. Along with that letter Rinaldo’s lawyer wrote to the ROM requesting his salary be reinstated.

On Dec. 21, 2001, the ROM informed Rinaldo that on the basis of his recent conduct he was deemed to have resigned as of Oct. 31. In April 2002, after litigation proceedings were started, the museum conceded Rinaldo’s right to short-term disability leave and that he had been employed until Jan. 31, 2002.

Rinaldo filed an action seeking 15 to 20 months’ notice and aggravated Wallace and punitive damages. The ROM argued Rinaldo refused to accept his probation, that this refusal amounted to him resigning and he was thus not entitled to damages for wrongful dismissal.

But the judge found that the museum, through its actions and refusal to recognize Rinaldo’s sick leave, created an environment in which he could not reasonably have been expected to return to work after Jan. 31, 2001.

The ROM refused him sick leave, even though he had provided medical documentation. It cut off his e-mail access, preventing him from communicating with staff and colleagues from home. It stopped paying him. The ROM created “an environment that was not conducive to his returning. In the circumstances, (Rinaldo) reasonably believed he was being dismissed,” said the court.

The trial judge concluded the museum had repudiated its entire contract of employment with Rinaldo, resulting in his wrongful dismissal. He was awarded 16 months’ notice plus an additional three months for the manner in which the dismissal was handled.

For more information see:

Kieran v Ingram Micro Inc., 189 O.A.C. 58, 2004 CarswellOnt 3117, 2004 C.L.L.C. 210-042, 33 C.C.E.L. (3d) 157, [2004] O.J. No. 3118 (Ont. C.A.)

Rinaldo v Royal Ontario Museum, 2004 CarswellOnt 5209, 37 C.C.E.L. (3d) 1 (Ont. S.C.J.)

Natalie MacDonald is an associate with Grosman, Grosman & Gale, a Toronto-based law firm specializing in employment law. She can be reached at (416) 364-9599 or [email protected].

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