There has been a long-standing approach based on cases that if an employee resigns in the “heat of the moment”, or as part of an emotional outburst of frustration, then relying on such resignations can be unsafe. In that situation, the cases suggest an employer has a good faith obligation to enquire if the resignation was intended or to ask the employee to reconsider their resignation. So, if your employee says, “that’s it, I quit” in the context of a tense and possibly heated exchange, an employer should provide them with some time to “cool-off” and reconsider their resignation. The previously accepted best practice was that the employer should offer the employee the option to retract their resignation.
But what happens if you have a difficult employee, and they resign in such circumstances? Most employers would want to rely on an employee’s resignation.
RECENT CASES
In 2021, the Employment Court took a different approach to “cooling-off” periods with its decision in Mikes Transport Warehouse Limited v Vermuelen (Mikes Transport). In this case Vermuelen was asked to attend a performance management meeting. During the meeting he became visibly upset and resigned. Vermuelen argued that his resignation was in the heat of the moment, and he was not provided with a “cooling-off” period. Vermuelen failed with his claim that he had been unjustifiably dismissed from his employment.
A similar argument was raised in Urban Décor Ltd v Yu (Urban Décor). In this case, two employees were arguing with their employer and the argument led to the employees saying they quit. After verbally resigning, both employees gathered their property and left the workplace. The employees left abruptly and did not return for the rest of the day. They did not contact their employer until after work hours and even at that point there was no indication of them returning to the workplace. The employer then sent the employees dismissal letters the next day.
CHANGE IN APPROACH
In Mikes Transport, the Court made these observations:
- Resignations are a unilateral act, i.e. they do not require an employer to agree or accept the resignation.
- Using an objective test, if the employee has clearly resigned, then there is no obligation for the employer to offer a “cooling-off” period or to allow the resignation to the withdrawn. This objective assessment is informed by the circumstances in play.
- Concerns regarding the employer causing the employee to resign can be addressed through laws regarding constructive dismissal.
- A resignation given in clear unequivocal terms is more likely to satisfy an objective assessment than words or a resignation expressed in an equivocal manner, or which is plainly not meant to be taken seriously. This can be the case even if an employee resigns in a moment of distress, anger, or frustration.
The difficulty that arises is whether an employee storming out will objectively amount to a resignation. In Urban Décor the Court applied the same principles as Mikes Transport but expanded on certain scenarios where a resignation would not satisfy an objective test. For example, if the employee stormed out of the workplace for a short period of time and returned, then this would indicate that the employee has an intention of continuing with their employment. In Urban Décor the resignation by both employees was unequivocal. Whilst the resignation may have been impulsive, both employees showed no indication of returning to the workplace.
