As we have written before, to be valid, a resignation must be voluntary, clear and unequivocal. There are circumstances where employees are allowed to retract their resignation, and if an employer does not accept the retraction, the employer can be found to have wrongfully dismissed the employee.
In the recent decision, English v Manulife Financial Corporation, 2019 ONCA 612, the Court of Appeal overturned a summary judgement decision where the motion judge found an employee had resigned and could not withdraw her resignation. Contrary to the motion judge, the Court of Appeal stated that given the surrounding circumstances, the employee was in fact able to withdraw her resignation.
Ms. English worked with Standard Life Insurance (“Standard Life”) for nine years as a Senior Customer Relationship Manager until it was acquired by Manulife Financial Corporation (“Manulife”). Soon after, Manulife announced that they would be converting to a new computer system. As Ms. English was 64 years old and close to retirement, she did not think it made sense for her to be trained on an entirely new system only to retire a short year later. Thus, she provided her supervisor with a letter stating that she would be retiring at the end of the year. However, she did so hesitantly as she was not entirely sure about her decision to retire early. Her supervisor responded that she could change her mind later. Manulife eventually decided not to implement the new computer system and so Ms. English decided to stay with Manulife. Manulife, however, took the position that Ms. English had retired.
Did the circumstances around Ms. English providing a letter of retirement constitute a resignation?
The Court of Appeal stated that Ms. English’s resignation notice was ambiguous given the circumstances in which she presented it to Manulife, and she was entitled to withdraw it. Upon giving her supervisor the retirement letter, she informed him that she was not completely sure she wanted to retire. Her major motivator for retiring early was because Manulife was planning on implementing a new computer system. Her supervisor further responded that she could change her mind later. Additionally, when Ms. English did eventually decide not to retire, her supervisor never expressed any indication that her changing her mind posed a problem.
Essentially, when Manulife decided not to implement the new computer system, the major reason for Ms. English’s retirement also disappeared. Accordingly, she informed her supervisor of rescinding her retirement letter and her supervisor did nothing to indicate there was any problem with the rescission. As such, the Court of Appeal stated that these facts did not support a clear and unequivocal resignation. Rather, it was evident that Ms. English was “equivocal when giving her resignation notice”. Ultimately, Ms. English was able to withdraw her resignation.
Lesson to be learned
Resignations must be clear and unequivocal. Employers need to be aware that even if they receive written notice that an employee is resigning or retiring, more may need to be done to confirm the employee’s true intentions. Otherwise, the employer risks having to defend a wrongful dismissal claim.
The issue of whether a termination clause limits an employee’s entitlement to the minimum notice set out in the Employment Standards Act may be the most litigated issue in employment law over the past 5 years.
We have started the last month of 2019 and it is time for my annual top Employment Law stories of the year. 2019 has been a relatively good news year for Ontario employers. On January 1, 2019, the new Conservative provincial government started the year by delaying...
When speaking with a client about other terms of employment that can be included in an employment contract, I always ask whether the organization has an Employee Handbook.