THE EMPLOYERS' EDGE
ANALYZING THE 3 Rs (and an A) OF THE ENDING OF EMPLOYMENT: RESIGNATION, REPUDIATION, ‘RONGFUL DISMISSAL…AND ABANDONMENT
While not all employment relationships end as badly as the title of this article, they all, eventually, end. Where the employer makes the choice to terminate, the employee decides to moves on or there is a frustration of contract, there is usually a clear demarcation between when an employee has ceased being an employee. However, there is also a significant amount of “grey area” when it comes to the end of employment relationships – particularly where an employee says they were fired while the employer takes an opposing position. A recent decision of the Superior Court highlights the different ways an employment relationship can be found to have ended in such disputes, and the different analysis that applies to each method: Resignation, abandonment, repudiation of the employment contract or termination.
By now, you are likely aware that for an employee’s resignation to “stick”, it has to be “clear and unequivocal.” In Kieran v. Ingram Micro Inc. the Court of Appeal for Ontario said:
Whether words or action equate to resignation must be determined contextually. The surrounding circumstances are relevant to determine whether a reasonable person, viewing the matter objectively, would have understood Mr. Kieran to have unequivocally resigned.
Similarly, the test for abandonment requires that the court examine such objective factors as a failure to report to work, a failure to follow policies and procedures, relocation and a lack of intention to return.
However, the concept of repudiation begets a different analysis. Perhaps best considered in opposition to the concept of constructive dismissal – where an employer unilaterally seeks to implement a change to a fundamental term or condition of employment – repudiation allows an employer to terminate the employment relationship where the employee has insisted on a similar significant change, or where an employee refuses to perform an essential condition of the employment contract. As the Court of Appeal said in Roden v. Toronto Humane Society:
Whether an employer is justified in terminating the employment relationship based on repudiation requires an assessment of the context of the employee’s refusal, in order to determine whether the employee refused to perform an essential condition of the employment contract or whether the refusal to perform job responsibilities was directly incompatible with his or her obligations to the employer.
In the recent case of Anderson v. Total Instant Lawns Ltd. the plaintiff was the Office Manager, in charge of recording workers’ hours as sent to her via WhatsApp, and then preparing the payroll and cheques for the CEO to sign. She was also responsible for scheduling the work crews, subject to the CEO’s approval and/or any changes. After a dispute with the CEO over her husband’s hours (he was a temporary worker there) the plaintiff said she was ready to leave and only return when her husband had the pay owed to him. After several attempts to work the problem out over the phone, the plaintiff reiterated that she would not return to work unless her husband was paid based on the hours she had recorded. Shortly thereafter she walked out of the office after advising her coworker she was leaving as she was no longer working at the Company, having been fired by the CEO and left the office keys on his desk. Further, the plaintiff then played a significant part in a work stoppage that involved the entire workforce, signing a “Strike Notice”, wherein one of the demands was that the plaintiff be offered her position back, her husband be paid “his wages in full” and that the plaintiff “be given authority to schedule the workers without alteration by management.”
In response, the next day CEO advised her that she was no longer welcome on the property or any job sites and she was prohibited from using or accessing any company resources. There was no question that her employment ceased as of that day; the question for the court was whether she voluntarily left her employment or whether it was terminated.
Although the Court found that the plaintiff had neither been fired nor had she clearly and unequivocally resigned, her actions demonstrated to the Court that she had repudiated the employment contract as “she had no intention of returning to work …unless certain conditions were met”. The Court determined:
- in the ‘Strike Notice’ that she signed, [the plaintiff] sought to force a change in the terms of her employment and stated she would not return to work unless those changes were instituted;
- in failing to keep [her husband’s] hours and refusing to provide [the CEO] with any record of his hours, [the plaintiff] was refusing to perform her duties; and,
- in the circumstances, this behaviour constituted an attempt on [the plaintiff’s] part to make significant changes to her duties as outlined in her employment contract and was incompatible with her continued employment.
Based on this reasoning, the Court dismissed the Plaintiff’s claim for wrongful dismissal.
Obviously, not all disputes between employee and employer constitute repudiation of the employment contract. However, when disputes do arise it is important to review the whole situation contextually, and the team at CCPartners can help you evaluate whether any of the scenarios discussed above – resignation, abandonment or repudiation – apply in the circumstances to help you avoid costly wrongful dismissal costs.