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    When is a resignation not a resignation?

    When is a resignation not a resignation?

    The recently decided case of Rae v Wellhead Electrical Supplies Limited 4110014/19 serves as a salutary reminder of the adverse consequences an employer could face where they fail to allow an employee to withdraw a resignation made in ‘the heat of the moment’.

    Legal principle

    Regular readers of our employment blogs will recall from an earlier post last summer (https://mailchi.mp/919467927cb8/hints-and-tips-when-faced-with-an-resignation) that as a rule of thumb, an employee who resigns cannot unilaterally withdraw that heat of the moment resignation just because they change their mind. It will normally be the employer’s decision, not theirs, as to whether or not they can do this, particularly if unambiguous words such as “I resign” or “I quit” have been used.

    It is generally considered good industrial relations practice to allow an employer or an employee to be given the opportunity to withdraw words of dismissal or resignation spoken in the heat of the moment, particularly where there are "special circumstances" (for example, provocation or coercion by a manager) as well as the employee’s own personality (an immature employee or an employee with stress and/or work-related issues).

    Background

    Mr. Rae founded Wellhead Electrical Supplies in 1990, and worked there until his apparent resignation on 21 March 2019. In the month leading up to the end of his employment, he had been discussing the issue of employee salary increases with his fellow directors. It became an issue of contention; he wanted to offer a pay rise while the other directors were more resistant to the proposal.

    At a board meeting on 7 March 2019, a pay rise was agreed. Mr. Rae was under the impression that in addition to a general pay increase, two employees – his son and a member of his sales team – would be given a larger pay rise. In previous informal discussions Mr. Rae had threatened to resign if the proposed pay increases did not go through.

    Mr. Rae informed the two employees about the increase, but this was not reflected in their next pay slips causing Mr. Rae to feel “devastated” and “embarrassed”.

    Mr. Rae pursued the issue with the company’s finance director, confronting him on 21 March 2019. He threw his keys on the finance director’s desk and shouted: “I told you what was going to happen”. As he left, he remarked “I won’t be back”.

    Not more than two hours after Mr. Rae walked out of the office, an emergency board meeting was called, where it was unanimously agreed that his resignation would be accepted. The very next day Mr. Rae contacted his fellow directors to explain he would not be resigning and that he was suffering from stress. He then went to see a doctor and was signed off work.

    That very same day the company wrote to Mr. Rae confirming that in their opinion his resignation was in unequivocal terms and as such they had accepted it and were moving forward to process his P45. Mr. Rae thereafter pursued a claim of unfair dismissal before the Employment Tribunal (ET).

    Decision

    In upholding Mr. Rae’s claim of unfair dismissal the ET determined that whilst the words used by the Claimant were “apparently unambiguous” the context in which they were used meant it was unreasonable for the company to rely on them. The ET took the view that Mr. Rae had clearly been angry, and this could not be interpreted as a planned course of action. This was not the way that company directors would be expected to resign. He had sought to correct his position the following day, and that was sufficiently quick that the company should have accepted that his intention was not to resign. Accordingly, by not letting Mr. Rae come back to work, the company had unfairly dismissed him.

    Comment

    If an employee resigns in any of the circumstances described above, the employer should always assess the position from a commercial as well as a legal perspective. Probing an employee for more detail before accepting a ‘heat of the moment’ resignation inevitably gives greater scope for the employee to seek to withdraw their resignation, and some employers may prefer to take the risk and see what happens.

    However, if an employee’s intentions are unclear – if there are potential “special circumstances” at play or if there are suggestions of discrimination or whistleblowing in the background – this risk becomes much greater. In such circumstances we would always advise that you contact a member of our Employment Law Team for timely legal assistance before taking a step which could land you in hot water.

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