Chapter 12 – Resignations and Retirement

Chapter 12: Resignations and Retirement

Employee Resignation

Employee resignation involves several important preliminary points that an employer should consider:

1. Written Resignation: An employer should ask employees wishing to resign to submit their resignation in writing through a letter. This formalizes the process and provides a clear record.
2. Formal Acceptance: An employer should formally accept an employee’s resignation in writing, responding with a letter that confirms the resignation. This helps ensure both parties are on the same page about the termination of employment.
3. Cooling-off Period: Employers may consider allowing a “cooling-off” period for employees who resign following a bad day at work or after an emotional outburst. This period can enable the employee to rethink their decision before it becomes irrevocable.

Employee Entitlements Upon Voluntary Resignation

Upon resignation, employees have specific entitlements:

1. No Wrongful Dismissal Damages: Employees cannot claim wrongful dismissal damages unless the case involves constructive dismissal, forced resignation, or an improperly handled resignation.
2. Employment Insurance Benefits: Employees are not entitled to Employment Insurance (EI) benefits upon voluntarily resigning from their position.
3. Outstanding Wages: Employees are entitled to receive any outstanding wages owed at the time of their termination. This includes all wages accumulated up to the final day of work.
4. Vacation Pay and Overtime Pay: Employees are also entitled to receive their outstanding vacation pay and overtime pay that remains unpaid at the time they resign.

Inferring Resignation from Conduct

The law requires that a resignation must be "clear and unequivocal." Ambiguous or equivocal conduct from an employee is insufficient to infer resignation. For instance:

• If an employee expresses a vague intention to leave, such as planning to look for another job, this alone does not constitute a formal resignation.
• Statements indicating dissatisfaction without a clear intent to resign (e.g., “I can’t wait to leave”) are not recognized as valid resignations under law.

Pollock Case: Importance of Clear Resignation

In the Pollock case, the facts indicated that employees expressed clear intent to continue working under existing terms while declining new contracts that reduced their severance entitlements. When employees sent a follow-up memo indicating they would proceed if they did not hear back, the employer misinterpreted this as resignation.

• Court's Decision: The second memo did not represent an unequivocal notice of resignation because the employees expressed willingness to continue working. Consequently, they were awarded wrongful dismissal damages.

Gilbert Case: Intention to Resign Must Be Clear

The Gilbert case involved a long-term employee laid off and later notified that failure to report would be interpreted as resignation. Despite returning calls to seek clarification about his job status, Gilbert was unable to confirm his return due to a lack of information.

• Court's Conclusion: The court ruled that Gilbert did not possess sufficient information to make an informed choice about resignation, and his intent was not correctly discerned by the employer.

Robinson v. Team Cooperheat-MQS: Resignation Under Distress

In this case, a long-term employee resigned after being accused of bullying during a meeting, stating that he would have to resign unless allegations were withdrawn.

• Outcome: The next day he attempted to retract his resignation, citing emotional distress at the time. The court held that resignations given in emotionally charged circumstances could be validly withdrawn if emotions have calmed down, although reaffirming the resignation can complicate matters.

Reid Case: Emotional Vulnerability and Resignation

Reid, a long-term employee facing severe stress, submitted a resignation after a frustrating day at work. Before the employer processed her resignation, Reid attempted to rescind it, claiming emotional distress and a misunderstanding of her decision.

• Court's Finding: Although her initial resignation was "clear and unequivocal," the court recognized her emotional state and suggested that the employer should have sought clarification regarding her unexpected departure before confirming her resignation.

Employer Responsibilities During Resignation Notice Period

1. Working Notice Period: If an employer dismisses an employee during their working notice period without clear cause, they may be liable for wrongful dismissal damages, considering the employee's entire service duration.
2. Duration of Notice: Generally, a resignation notice period is shorter than an employer’s required termination notice period, typically lasting a minimum of two weeks. However, proper duration can vary based on industry practices, employee role, and the time required for hiring and training a replacement.
3. Key Employees: Employees with specialized knowledge may be required to provide longer notice periods (potentially up to 10 months) to avoid severe damage claims as per cases such as GasTOPS Ltd.