In the midst of a meeting to discuss an employee’s performance, the employee becomes agitated and upset. They advise they are struggling in their role and then they announce their resignation. Can the employer rely on this resignation or are they required to give the employee a “cooling off” period to consider their decision?
Two recent cases in the Employment Court have cast doubt on “cooling off” periods always being required after “heat of the moment” resignations by employees.
In the first case, Mikes Transport Warehouse Limited v Vermuelen, it was held that the key question is whether, looking at the facts from the perspective of someone standing in the employee’s shoes, it can be said that the employee resigned at the time, rather than simply whether the resignation occurred in a moment of distress, anger or frustration or whether a fair and reasonable employer could have accepted such a resignation.
In other words, just because a resignation occurred in those circumstances, this does not mean that it was not a valid resignation. A resignation does not need to be justified, demonstrably sensible or well thought through. However, would someone in the employee’s shoes at the time consider that their employment had ended?
The Court also noted that, if there are concerns about the circumstances of the resignation, these can still be considered in the context of the law of “constructive dismissal”, such as whether the employee was effectively compelled into resigning or given the choice between resigning or being dismissed.
Further, even if there is a valid resignation, this does not stop the parties later agreeing to the employer re-engaging the employee if that is what they want to do after a time of reflection.
The principles from Vermuelen were applied in Urban Décor Ltd v Yu. In that case, two employees said that they quit after a heated exchange with their employer, they then took their bags and left the workplace and did not return for the rest of the day. The employees did not clock out and no contact was made until after work. In addition, when contact was made, it did not indicate an intention to return to work. Mr Han sent the two employees dismissals letters early the next morning.
The Court held that, on an objective basis, “the facts support a finding that Ms Yu and Ms Jin resigned. Mr Han’s dismissal letters do not, and cannot, turn those resignations into dismissals; nor do his subsequent statements where he admits having dismissed them”.
Key takeaways
Despite the above, there is still merit in employers giving employees a “cooling off’ period if there is a heat of the moment resignation and then checking in with the employee to see if the resignation stands. This is particularly given that an allegation of constructive dismissal is still a possibility.
However, what these cases do suggest is that, if an employer finds themself in a situation where they did not give an employee a cooling off period, this will not necessarily stop the employee being found to have resigned.
This article is not a substitute for legal advice and you should consult your lawyer about your specific situation. Please feel free to contact us at Parry Field Lawyers:
- Mike Henderson-Rauter, Senior Solicitor – mikehenderson-rauter@parryfield.com
- Hannah Carey, Senior Counsel – hannahcarey@parryfield.com
