PLEASE NOTE THAT THIS CASE WAS OVERTURNED ON APPEAL, FOR OUR BLOG ON THE APPEAL DECISION, CLICK HERE
For employees who resign from their positions and whose the resignation is accepted, the decision is final. In English v Manulife Financial Corporation the Ontario Superior Court of Justice considered the case of an employee who resigned from her position when she learned that her employer planned to move its customer information to a new computer system. She provided written notice to her employer of her intention to retire, which she drafted herself. When she presented her letter to her supervisor in a meeting, he asked if she was “sure” about her decision to retire. He further informed her that she could rescind or reconsider her retirement if she wished. The employee stated that she had made up her mind and did not need additional time to reconsider.
Several weeks after providing notice of her intention to retire and prior to the date on which the employee indicated she would be retiring, the employer announced that the planned conversion of customer information would not in fact be taking place. As a result, the employee rescinded her notice of retirement. When she informed her supervisor that she wanted to retract her notice of retirement her supervisor did not confirm or deny acceptance of her retraction. The employee did not provide any written notice of her desire to rescind her notice of retirement. Ultimately, several weeks after she attempted to resile from her resignation, her supervisor informed her that the employer would continue to honour her notice of retirement. The employer had already begun restructuring in order to address the departure of the employee and refused to accept the retraction.
The employee sued, alleging that she had been wrongfully dismissed and was entitled to compensatory damages. The employee argued that it was her right to retract her resignation at any point up until the date on which she had indicated she would retire and, therefore, the employer’s decision not to allow her to rescind her notice of resignation amounted to termination of her employment. The employer argued that it would have been “manifestly unfair” to compel the company to continue employing the worker given that it had already expended considerable resources in planning for her retirement.
Relying on the general principles of contract law, the Court found that the employee’s resignation had been final and that she was not entitled to retract it. The Court noted that the notice to resign had been clear and unequivocal and that there was no doubt it had been the employee’s intention to retire at the time she provided notice to her employer. The principal issue for the Court to decide then, was whether or not the employee was entitled to retract her notice of retirement at any point up until the effective date of that retirement.
The Court found that, based on principles of contract law, an employee’s notice of retirement or resignation amounts to an offer and once an employer accepts that offer, a bargain is struck that the employee cannot then retreat from. As it was, the employer had already begun planning for the worker’s retirement and thus would have satisfied this criteria in any event. The Court did not rely on this, dismissing the employee’s claim on the basis that the parties had reached a contractual agreement and that the Court was not free to intervene, making the detrimental reliance of the employer on the employee’s notice of resignation unnecessary to the analysis. However, if the employer has not clearly accepted the resignation, detrimental reliance will be a relevant consideration.
Takeaway
The Court found that, based on principles of contract law, an employee’s notice of retirement or resignation amounts to an offer and once an employer accepts that offer, a bargain is struck that the employee cannot then retreat from. The Court considered the notion that an employee could resile from a resignation up to the point the employer had relied on the notice of resignation to its detriment. The Court did not rely on this principle, dismissing the employee’s claim on the basis that the parties had reached a contractual agreement and that the Court was not free to intervene, making the detrimental reliance of the employer on the employee’s notice of resignation unnecessary to the analysis. However, if the employer has not clearly accepted the resignation, detrimental reliance will be a relevant consideration.
This blog is provided as information and a summary of workplace legal issues.
This information is not intended as legal advice.
