Canadian employees have no right to severance pay if voluntarily leaving their job. They may claim this is unfair, but not so fast — the laws of resignation generally work in their favour.
Employees tendering their resignation are sometimes free to withdraw it and continue as before. Just ask top-gun computer executive Andrew Kieran, whose employer, Ingram Micro, proposed to accept Kieran’s resignation after he indicated that he wouldn’t work for a rival employee expected to take over the company’s presidency. But the Ontario Court of Appeal resoundingly concluded Kieran was free to change his mind, as long as Ingram hadn’t acted to its own detriment by relying on his statements.
Even an obvious indication of an intention to resign does not make it so. When, in a blaze of fury, Susan Lelievre demanded a severance package, fired off a number of e-mails announcing her last day of work, packed up her belongings and then left, her employer, AIG Insurance, concluded she had resigned.
However, AIG made one fatal mistake: Relying on Lelievre’s statements that she was leaving, management did not step in to outline her options. Instead, the court ruled, by demanding the return of all company property, it effectively terminated her employment. Employees should be given the benefit of time to consider their actions and asked to confirm their intentions in writing. Lelievre had not been given that option.
A true resignation must not be given on impulse. The law recognizes spontaneously made statements may not constitute a valid resignation. Neither should an employer seize upon the intemperate utterances of an emotionally charged employee. An employee who proclaims “I quit” in the heat of the moment may have done anything but.
A resignation, to become effective, does not require the use of that very word. The real test is whether an employee’s actions are consistent with someone voluntarily wishing to leave. I currently have two such cases. In one, the employee emphatically denies having uttered “I quit.” In the other, she asserts the employer wrongly attributed to her a statement indicating she had resigned. In both, the employees came to work the next day as if nothing unusual had happened. The conclusion to their cases will be, I suspect, based not on the words my clients used, but on their actions and conduct at the time that those words were said — and afterwards. Nothing else ought to be dispositive.
Resignations arising from an ultimatum could simply be a camouflaged termination. Selling used cars, Bradley Gallagher never paid much attention to the calculation of his commission payments. But in 2003 Gallagher’s car dealership demanded he sign a shady commission plan or face termination. When Gallagher refused, the dealership said he had resigned. The court decided otherwise. A true resignation is voluntary.
Daniel A. Lublin is a Toronto employment lawyer practising exclusively in the law of wrongful dismissal. He can be reached at dan@toronto-employmentlawyer.comor through his website, www.toronto-employmentlawyer.com.
