When a Resignation Becomes Wrongful Dismissal

A recent decision of the Ontario Court of Appeal provides an important reminder, that often an employee’s resignation from employment is not as clear in law as it at first may seem. Accordingly, what may initially appear to be a straightforward resignation can unexpectedly become wrongful dismissal. 

The case, English v. Manulife Financial Corporation, involved an employee who had resigned from her employment but who later announced that she wished to cancel the resignation.  

Background of the Case

The employee had specifically originally informed Manulife that she planned to retire from Manulife at the end of 2017, she moved forward her resignation date to the end of 2016 because she understood that there was a significant change coming to the company’s technology system. 

Specifically, the employee was concerned about her ability to learn a new computer system, particularly given that she was advanced in her career and preferred to resign rather than invest the effort needed to become familiar with the new system. 

At the time of the resignation, the employee’s supervisor asked if she was sure she wanted to resign, to which the employee responded that she was not fully committed to resigning. The supervisor stated to the employee that she could change her mind if she wished. 

The employee’s formal notice included the following letter:

Dear Clive,

This will serve formal notice that I will be retiring effective December 31, 2016.

I have enjoyed working at Standard Life/Manulife for the past 10 years very much and want to thank you very much for all your support during my tenure.

I especially want to express my gratitude for all your support and understanding during my very difficult times in 2012 and again in 2015.

I will entertain a part-time position, two or three days per week, should be possible, but I understand if it is not.

Again, thank you so much for everything.

Sincerely,

Elisabeth English

Withdrawal of Resignation

A few weeks following her announcement, Manulife decided that it would not process with the technology conversion.  As a result of this, the employee announced that she would not proceed with her resignation. 

Manulife subsequently responded by stating that they would not recognize her rescinding of her resignation of employment. The company in part pointed to the fact that they had plans to transfer the employee’s responsibilities to other regions and managers and that her role would no longer exist following her departure.

Following the refusal, the employee sued Manulife for wrongful dismissal. The Ontario Superior Court of Justice decided against the employee, stating that the resignation (indicating an intention to end employment on the last day of 2016) was clear and could not be reversed. The judge made the decision largely on the fact that the employee had written a letter of resignation which was deemed to have been done on her own free will and that accordingly, Manulife had the right to rely on the resignation. 

The Court of Appeal disagreed that the employee’s decision to resign was clear and/or unequivocal. The Court of Appeal found that the lower court had wrongly ignored the fact that the computer conversation was an integral part of the reason for the resignation. Therefore, when the computer conversion was no longer to proceed, the employee was within her rights to rescind her resignation, particularly since her supervisor had informed her that she had the right to change her mind. 

Takeaway for Employers

This case is a reminder of the fact that a resignation must be clear and unequivocal. And courts will intervene whenever they feel it is appropriate to overturn resignations. This means employers can find themselves liable for compensation to employees who they assume had left their employment voluntarily.  

For information regarding wrongful, unjust or constructive dismissal, or if you have any questions about how the rules described above apply in your situation, a Toronto employment lawyer at Sultan Lawyers can provide experienced guidance. Please contact Majella Lahert by telephone at 416-214-5111 or by here.