Resignation is a common way that the employment relationship ends between an employer and employee. However, despite its frequency, the act of resignation carries a lot of significant legal consequences and may be quite complicated depending on the circumstances of the resignation.
This blog seeks to provide some basic answers to the most common questions our law firm gets about resignation. To be clear, if any reader of this blog has any specific questions related to resignation and their own particular case, they should approach an employment lawyer and schedule a consultation.
What is Voluntary Resignation?
To resign from their employment, the employee must freely and unequivocally provide an offer of resignation (for example, through a letter). Until the employer has accepted that offer or the resignation period has expired, the resignation is not finalized nor is the employment relationship terminated. If the resignation is voluntary, the employee will not be entitled to termination or severance pay.
It takes two to resign. As such, a resignation must (a) be communicated and (b) accepted. Absence an acceptance or the expiry of the resignation period, a resignation is not binding at law. Likewise, an employee is free to rescind their resignation on a future date if the employer tells them that they can do so or before the resignation is accepted by the employer.
To determine if a resignation was voluntarily made and accepted, all the surrounding circumstances should be assessed contextually. If the resignation is ultimately not found to be valid and the employer took steps to enforce it or dismissed the employee, then the employer may be at risk of litigation or compensating the employee for wrongful dismissal. We look at several of those specific situations below.
Constructive Dismissal vs. Resignation
Constructive dismissal happens when the employee’s fundamental terms of employment are changed unilaterally by the employer. Generally, the terms of employment should be the important aspects of the employment contract or relationship. Changes that are too small or that occur to less important terms in the agreement will not trigger constructive dismissal.
Resignation is a common “cover” for constructive dismissal – that is, an employer will often claim that the employee has resigned when, in fact, the employee’s departure occurred as a direct result of the unilateral changes to fundamental terms and conditions in the employment relationship made by the employer. In this situation, an employee’s employment is impacted to the point where it would be unreasonable to stay and accept the fundamental changes to the employment relationship. Common examples include a reduction in pay or benefits, a change in the employee’s job responsibilities or duties, an increase or decrease in work hours or workload, a transfer to a new workplace location… etc. Due to these changes, the employee then leaves their employment via a “resignation.” However, even though the term is often used even in the context of a constructive dismissal, a true resignation happens when the employee simply wants to quit their job irrespective of the employer’s conduct. Again, as set out above, a resignation needs to be freely and voluntarily given for it to be valid.
If the resignation that was provided by the employee to the employer is due to the employee facing significant changes to their working conditions, then that “resignation” could be constructive dismissal. Once a claim for constructive dismissal has been made, the employee will generally claim common law and statutory damages in a wrongful dismissal lawsuit. The employee may be entitled to severance pay and / or termination pay. Depending on the circumstances, the employee may also be entitled to punitive and general damages for discrimination, harassment or bad faith.
Resignations Made “In the Heat of the Moment”
The proverbial heat-of-the-moment “I quit!” may not be a binding resignation. Employees are entitled to a “cooling off” period and an employer cannot capitalize on the opportunity to enforce a resignation if it occurs in these types of situations, however tempting it may be.
Employers in this case would be wise to make an analysis to determine why these statements by the employee were made. Failing to do so can increase an employer’s legal risk of litigation. For instance, the employee may claim that despite their resignation, they were actually constructively dismissed and that they should be compensated for their wrongful dismissal.
Can a Resignation be Retracted?
Possibly. The employee may be able to retract a resignation if the employee retracted the resignation quickly after it was initially made, the employer failed to accept the resignation and the employer did not act on the resignation to the employer’s detriment.
This is a very fact-driven analysis. For example, if the retraction is in dispute, the courts will carefully look at the timeline of events. A retraction that takes place within hours after it was made will be more likely to succeed than a retraction that took place over the course of several days or weeks after the initial resignation as made. Secondly, actions on the part of the employer such as hiring a new employee or changing its business or operations due to the resignation would make it less likely that the retraction will be considered valid.
How Zeilikman Law Can Help
Approaching an employment lawyer will be very helpful to both employers and employees when there are issues surrounding resignation. The legal analysis of a resignation is exceedingly fact driven. Employment lawyers like the ones at Zeilikman Law can assist both employers and employees by reviewing the facts surrounding the resignation and help them determine what the next best steps are to take given what the law states.
If our readers would like more information about resignation, please look at our blogs entitled:
- What Should an Employer do when an Employee Resigns?
- My employer claims that I quit, am I entitled to any compensation?
- 3 Legal Issues to Watch Out for When Employment Ends
We also invite you to review a decision in which our firm was successful in an action where our client resigned and then retracted her resignation. The Ontario Court of Appeal ruled that our client’s resignation was not “clear and unequivocal” and awarded her significant damages:
Employers and employees can contact our office at (905) 417-2227 or online here to schedule their own confidential consultation with Zeilikman Law.
