Was it a wrongful dismissal? Alberta court weighs in
An Alberta court has dismissed a worker’s wrongful dismissal claim because the worker clearly resigned from her employment and didn’t retract her resignation before the company’s shares were purchased by another company.
The worker started employment with Capital Paper, a recycling company in Calgary, in 2008. On Aug. 29, 2022, she submitted a written notice of resignation indicating that she was resigning from her position as of June 30, 2023.
In December 2022, Capital Paper was acquired by Environmental 360 Solutions (E360), an environmental management company based in Aurora, Ont., with locations throughout North America.
On Dec. 6, the worker met with E360 management. At the time, the sale of the business hadn’t been completed and E360 wanted to meet with the worker as part of its due diligence, as Capital Paper had informed the company that she had resigned. E360 wanted to know the circumstances of her resignation in case there were any issues of which it needed to be aware.
The worker expressed interest in a role with E360 and the chief operating officer (COO) told the worker that there were opportunities for her. He said that he was “receptive to finding a suitable role” for her once he understood her role with Capital Paper and how she would fit with E360. The worker later testified that she gave him “a number and I told him that I would stay on for five years.”
Pending resignation
At the end of the meeting, the COO believed that the worker would consider joining E360 if the company made her “an offer she couldn’t refuse” but there was a time limit given her effective resignation date on June 30, 2023.
According to the worker, she told the COO that she was going to stay and looked forward to the opportunity with E360.
Two days later, the worker emailed E360 saying that she would be an asset to the company and would “retract my resignation if I receive an offer with E360.” The COO replied that their next step was to close the deal and the purpose of the meeting was to understand her role. He added that there was a place for her and “let’s sit down once we close.”
On Jan. 4, 2023, the worker emailed to say that “I would be willing to recant my resignation that comes due the end of June” but she needed to know where she stood. The COO said that he couldn’t give her a definitive answer until “we have a better understanding of what we bought.”
However, after assessing the business, E360 determined that it couldn’t offer the worker a position. On March 2, the company advised the worker that it was “formally accepting your resignation letter for the date that you listed” and June 30 would be her last day. The worker didn’t respond.
On May 25, E360 advised the worker that, because of accrued vacation time, the last day she had to report for work was June 2 and her pay and benefits would continue until June 30.
The worker emailed the COO on June 2 saying that, based on their earlier conversations, there was a place for her “as I was willing to recant my resignation.”
Wrongful dismissal action
The worker then commenced a wrongful dismissal lawsuit seeking 15 months’ pay in lieu of reasonable notice equalling $100,000, plus aggravated and punitive damages. E360 contended that the worker had resigned from her position and didn’t retract her resignation at any time.
The court accepted that the worker resigned from her employment with a clear and unambiguous letter of resignation on Aug. 29, 2022. It identified the primary issue as whether the worker withdrew her resignation at any time prior to June 30, 2023.
The court noted that established legal principles required a clear and unequivocal act of resignation along with objective actions that follow through with that intent. In addition, an employee can retract a resignation before the employer accepts or relies on it to its detriment, the court said.
“There wasn't really an argument about the fact that there was a valid resignation - the worker wrote a letter giving notice that she was resigning and she provided a clear future date for that resignation,” says Michelle McKinnon, a partner in the Labour and Employment Group at Cassels in Calgary. “There were no conditions attached to it, and it wasn't forced in a constructive dismissal context.”
The worker claimed that she verbally communicated her intention to stay during the meeting with E360’s COO. However, the COO said that she “was adamant that she was going to leave” and denied that she retracted her resignation. The company also pointed out that, at the time of the meeting, the COO wasn’t in a position to accept any withdrawal of resignation, as the sale hadn’t yet closed.
No valid withdrawal of resignation
The court found that any communication by the worker at the Dec. 6, 2022, meeting purporting to withdraw her resignation wasn’t valid, as she was still an employee of Capital Paper at the time, and no evidence was presented that she advised anyone at Capital Paper of her intention to withdraw her resignation.
“Essentially what the worker needed to do was to clearly communicate not to E360, because they're not the employer, but to Capital Paper that she was withdrawing the resignation, and it needed to be done prior to Capital Paper having accepted her resignation,” says McKinnon. “It's an interesting dynamic in this case, with E360 being involved and the worker saying that she communicated to E360 that she was withdrawing the resignation - but any communications with E360 wouldn’t have been a valid withdrawal of the resignation because E360 was never the employer.”
The court noted that email communications from the worker supported E360’s position that she didn’t indicate an intention to withdraw her resignation, as the worker said that she would retract her resignation if she received an offer with E360 and she would be willing to “recant my resignation that comes due the end of June.”
The court found that the worker’s willingness to recant her resignation was conditional upon receiving a suitable offer from E360, and there was no evidence indicating that she withdrew her resignation at any time.
The court determined that the worker never retracted her resignation, which was clear and unconditional. Capital Paper had accepted her resignation prior to the meeting with E360, and both E360 and Capital Paper conducted their affairs on the basis of her leaving employment on June 30, 2023. In fact, E360’s COO testified that Capital Paper didn’t recommend the worker for a role because she had resigned.
Acceptance of resignation
Even if an employer doesn’t expressly accept a resignation, it can be considered to have accepted it if it relies on the resignation to its detriment, according to McKinnon.
“There was no evidence before the court that Capital Paper had expressly accepted the resignation, but in the surrounding circumstances, the worker was communicating the whole time that she resigned and she's leaving, and Capital Paper is arranging its affairs on that basis,” she says. “When it was communicating with E360 as part of due diligence, it was also communicating that to E360 - that was enough to conclude that Capital Paper had accepted her resignation before she made any attempt to withdraw it.”
The worker’s claim was dismissed.
The case is a reminder that clear communication can help resolve confusion and avoid potential legal action, says McKinnon.
“If an employee resigns and there's any uncertainty as to whether the employee actually meant to resign, the employer has an obligation to inquire and make sure that the employee is actually intending to resign - doing that also protects the employer because it can clarify an issue before it becomes a potential wrongful dismissal action, which we see all the time,” she says. “And while an express acceptance of the resignation isn’t necessary for it to be legally valid, I recommend it, especially in circumstances where you’re making business decisions based on that resignation – just respond and confirm in writing the acceptance of the resignation as presented by the employee.”
