THE EMPLOYERS' EDGE
I Take it Back! Ontario Court of Appeal Allows Employee to Withdraw Her Resignation
In English v Manulife Financial Corporation, the Court of Appeal overturned the motion judge’s finding (previously blogged on by CCPartners here) that the plaintiff could not rescind her notice of resignation.
The employee was 64 years old and planning to retire in the near future. The employee had worked for Standard Life insurance for nine years before it was acquired by Manulife Financial Corporation (Manulife). Manulife announced its intention to implement a new computer system. Upon hearing this, the employee gave her supervisor a letter indicating that she would retire at the end of the year. The supervisor told the employee that she could change her mind about resigning.
A few weeks later, Manulife announced it would not implement the new computer system. The employee decided that she wanted to stay in her position and expressed this to her supervisor the day after the announcement. The supervisor acknowledged the withdrawal of her notice and asked human resources for instructions. A month later, the supervisor advised the employee that Manulife would not recognize a rescission of the notice. The employee promptly responded by letter explaining that the basis of her early retirement was due to the implementation of the new system, and that since this was no longer occurring, she intended to work until the end of the following year. Her supervisor responded that Manulife was honoring her letter of resignation, and she was subsequently told not to come into work.
The employee commenced an action for wrongful dismissal against the employee. The parties agreed to resolve the dispute through summary judgment. At the motion, the motion judge defined the issue as “whether an employee who has resigned her position of employment by way of notice of retirement may later rescind her written notice of entitlement.”
Decision of the Motion Judge
The motion judge concluded that the employee’s “notice of retirement was accepted by Manulife and that Manulife did not need to show that it had relied on the notice to its detriment.” As a result, the judge ruled that the employee was not wrongfully dismissed but instead resigned.
Decision of the Ontario Court of Appeal
In overturning the judgment, the Court of Appeal redefined the issue. The Court determined that the issue was whether the circumstances surrounding the employee’s resignation constituted a clear and unequivocal resignation. The Court ruled that the employee’s “resignation notice was equivocal given the circumstances in which she presented it to Manulife, and she was entitled to withdraw it.”
When the employee delivered her retirement letter to her supervisor, she told him that she was not entirely sure if she wanted to retire. The supervisor told the employee that she could change her mind. The implementation of a new computer system was the basis for the employee’s notice of resignation, and when she learned it was cancelled three weeks later, she informed her supervisor the next day that she had changed her mind and no longer wished to resign. The supervisor acknowledged her decision and did not tell her that this was a problem.
The Court wrote:
These facts do not support a clear and unequivocal resignation. On the contrary, they demonstrate that the appellant was equivocal when giving her resignation notice, and that her equivocation was condoned by Manulife through the actions of [the supervisor]
As a result, the Court found that the employee was wrongfully dismissed, and she was awarded 12 months’ pay in lieu of notice.
This case emphasizes the importance for employers to account for surrounding circumstances in determining whether an employee has resigned. Simply accepting a letter of resignation may not be sufficient to evince a clear and unequivocal intention to resign. The team at CCP can assist employers with all the issues that may arise from the resignation of an employee. Click here for a list of team members who can answer your pressing resignation or dismissal issues.
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