There are times in life when emotions take over and we say things we later regret. But if an employee impulsively resigns in the heat of the moment, should employers take this as read?
These situations can be difficult for all involved, and while some employers will allow a disgruntled member of staff time to cool off, others may not be so understanding. Of course, even if you do allow the employee to retract their resignation, the relationship may take some time to heal.
But from a purely legal point of view, what’s the correct course of action? More specifically, if an employee does change their mind about wanting to leave, are you obligated to allow them? Let’s take a look with reference to a recent case.
Rae v Wellhead Electrical Supplies
The claimant in this case, Mr Rae, was the managing director of Wellhead Electrical Supplies. In early 2019, Mr Rae raised concerns with his fellow directors, Mr Ogg and Mr Rastall, about a lack of any salary increases for employees since 2014. This had been a long-running point of contention, with Mr Rae in favour of the increases and the other directors more resistant.
According to Mr Rae’s recollection, the three eventually agreed a “general” increase for staff, with larger increases for a select few, including Mr Rae’s son. However, after Mr Rae informed these employees that their salary would increase by a generous 25%, he was dismayed to discover that they only received an extra 5% in their next pay cheque. Feeling betrayed by the other directors and upset that he had made promises to staff in good faith, Mr Rae threw his keys onto Mr Ogg’s desk and told him “I won’t be back”. On his way out of the office, he told Mr Rastall “I believe I’ve just resigned”.
Employees were informed of Mr Rae’s departure just 10 minutes after he left. An “emergency meeting” was also held two hours later, in which it was recorded that the company had “unanimously agreed to accept his resignation”.
The following day, Mr Rae called to tell the directors that he had “calmed down considerably” and that he had not intended to resign. He explained that he was under a lot of stress at home and was planning to see a doctor later that day. However, according to Mr Rae, Mr Rastall was not receptive to him resuming his position, telling him: “You are no longer f*cking MD. I am and I’ll see you in f*cking court”.
Mr Rae also sent a letter formally retracting his resignation, to which the company responded: “I appreciate that you may have since had a change of heart but your resignation has been accepted and it is simply not open to you to unilaterally withdraw it”.
Mr Rae subsequently made a claim for unfair dismissal. He attributed his rash decision to the stress he was under from having to care for his injured wife and denied that he had ever expressed in clear and absolute terms that he was intending to resign.
Crucially, Mr Rae’s solicitor maintained that “Whether a statement by an employee is to be construed as an offer to resign depends on whether it is beyond reasonable doubt that it communicated such an offer.” In this case, they argued, there was definite scope for ambiguity. Moreover, the company had made no attempt to have Mr Rae confirm his resignation in writing, and his solicitor argued that it would be highly unorthodox for a managing director to terminate his employment and directorship in such an abrupt manner.
However, the company maintained that Mr Rae had made two specific statements about his intention to resign, and despite the parties’ differing accounts as to the specific words used, it maintained that there was “clear consensus as to what had just occurred”. The fact Mr Rae did not report for work the following day was also “highly significant”, it claimed.
After considering the facts, The Tribunal made the following determinations:
Ultimately, the Tribunal concluded that: “In their desire to rid themselves of the claimant, Rastall and Ogg seized upon what he said and did on 21 March. At no time did they ever contemplate considering whether the claimant had really meant to resign, even when they became aware the following day of the state of the claimant’s health.” Accordingly, Mr Rae’s claim for unfair dismissal was upheld.
Director of Legal Services
This case is a useful reminder that when an employee resigns ‘in the heat of the moment’, there is a chance that the resignation will not be effective. In such cases, rather than accepting a resignation at face value, employers should make sure they give the employee the opportunity to reconsider.
There is case law suggesting that this doesn’t need to be a long time – in one case 30 mins was judged long enough – but employers should make sure that the employee has had the opportunity to reflect on what they want to do. How long employees should be given will vary, but generally 24 to 48 hours would suffice. By doing so, employees will not have the same latitude to argue after the event that they did not mean what they said.
If in doubt, it’s always safest to take advice from an Employment Law specialist before acting, as this will help you to identify the best course of action and reduce the scope for legal risk.