The Court of Appeal overturned a decision by deciding that an employee has the right to unilaterally revoke a notice of resignation due to changing circumstances and was wrongfully dismissed when the employer would not permit this to be done.
Elisabeth English had been working as a Senior Customer Relationship Manager for Standard Life Insurance for nine years when the company was acquired by Manulife Financial Corporation.
When she learned that Manulife planned to implement a new computer system, English – who was in her early sixties at the time and planning to retire at the end of the next year—considered taking early retirement instead of training on a new system so close to the end of her career. On September 22, 2016, she reluctantly provided her supervisor, Clive Ramnath, with a letter indicating that she would retire at the end of the year.
He told her that she could change her mind.
Less than three weeks later, Manulife announced that it no longer planned to convert to the new computer system. The next day, English advised Ramnath that she wished to withdraw her notice of retirement.
Manulife took the position, however, that she had retired and would not recognize a rescission of her resignation notice.
English’s claim for wrongful dismissal was dismissed by a judge of the Ontario Superior Court on a motion for summary judgment, on the basis that she had tendered a clear and unequivocal resignation.
The Court of Appeal overturned this decision.
In reversing the lower court’s ruling, Justice Benotto disagreed that English’s letter constituted a “clear and unequivocal” resignation. In her view, English’s resignation notice was equivocal “given the circumstances in which she presented it” to her employer, and she was entitled to withdraw it. Benotto J.A. reasoned that the computer conversion was the impetus for English’s early retirement, and that once it was cancelled, the basis for her resignation disappeared.
Justice Benotto also noted that when English gave Ramnath her resignation letter, she admitted that she was not entirely sure that she wanted to retire. Ramnath told her that she could change her mind—a fact admitted by him under oath. As soon as the computer system conversion was cancelled, English advised Ramnath that she had indeed changed her mind. He acknowledged her decision and did not tell her that it would be a problem.
In Justice Benotto’s view, these facts do not support a clear and unequivocal resignation, but in fact demonstrate the contrary: that English was equivocal in giving her resignation notice and that this equivocation was condoned by Manulife through the actions of her supervisor. Manulife was bound by Ramnath’s promise to English that she could change her mind.
Since English did not in fact resign, her termination on December 12, 2016 was a wrongful dismissal. She was awarded twelve months’ pay in lieu of notice.
This decision should caution employers to account for surrounding circumstances in determining whether an employee has in fact resigned. Simply accepting a letter of resignation may not be sufficient to evince a clear and unequivocal intention to resign. Although “clear and unequivocal” might sound straight-forward, this case demonstrates that it can be a high bar to meet. Employers should be very careful in how they respond to employee resignations. While Ramnath’s promise that English could retract her resignation might have been made in passing, it was his response which made Manulife accountable.
If you are unsure about an employee’s notice of resignation, we urge you to reach out to us. Accepting a resignation that is not “clear and unequivocal” could end up costing you far more in the long run. Minken Employment Lawyers is your source for expert advice and advocacy on today’s employment law issues. We can be contacted at firstname.lastname@example.org or call us at 905-477-7011. Sign up for our newsletter to receive up-to-date Employment Law information, including new legislation and Court decisions impacting your workplace.
Please note that this article is for informational purposes only and does not constitute legal advice.
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