The Ontario Court of Appeal has recently released a decision on the question of a resignation, which on its face was seemingly certain, yet in context was regarded as conditional. Given the conditional nature of the circumstances, does the removal of the condition allow the employee to rescind the resignation?

The Facts

The plaintiff was a long-term employee in a management role when she was advised that her employer intended to introduce a new computer system. Given that she was in her early 60’s at the time, she determined that it would be best that she retire rather than complete training on a new work system at the end of her career. Her resignation was set out in a memo as follows:

Dear Clive,

This will serve formal notice that I will be retiring effective December 31, 2016.

I have enjoyed working at Standard Life/Manulife for the past 10 years very much, and want to thank you very much for all your support during my tenure.

I especially want to express my gratitude for all your support and understanding during my very difficult times in 2012 and again in 2015.

I will entertain a part-time position, two or three days per week, should be possible (sic), but I understand if it is not.

Again thank you so much for everything.

Sincerely,

Elisabeth English

She met with her immediate superior and explained that her decision to retire was a response to the announcement of the new computer system. Three weeks later, the company announced that it would not be proceeding with the new computer system after all. The employee then requested the rescission of her resignation, which was declined.

She sued, arguing that her initial decision was premised on the representation as stated above. The initial court judgment was against her as the judge had determined the terms of her resignation letter were clear and unequivocal. Once accepted, as had been done, there was a binding and enforceable contract by which she had agreed to resign.

The Appeal

The Court of Appeal reversed this decision, determining that the context of the resignation was clearly based on the prior stated intent of the company to revamp its computer system. This was so, notwithstanding the fact that the letter did not state that the resignation was conditional on this statement. The reality of the context was indeed reflective of the plaintiff’s reliance upon the announced plan.

The facts also showed that her immediate superior had initially stated she could withdraw her resignation, which she had declined at the time. When the plaintiff sought to rescind her resignation a few weeks later after the announced change in plans, the corporation refused.

The sympathies and indeed the law favoured the plaintiff’s position. She was 64 years old, a long-term employee, earning $128,000 annually. The court ultimately found that the employee had exercised her right to rescind her resignation once the plan to change the computer system was cancelled. By refusing, the company had ultimately subjected the employee to wrongful dismissal.

Employers’ Take Away

An effective human resources department would have ended this conflict quickly and painlessly. Early legal intervention would have resolved this issue and avoided years of unnecessary and expensive litigation.

Employees’ View

This situation could have been avoided completely had the plaintiff taken time to have legal counsel draft the first resignation letter to state that it was indeed conditional upon the introduction of the new computer system. Preventive legal advice is not expensive and can be very effective in preventing costly and prolonged courtroom trials.

Get Advice Before You Act

For advice on this and similar issues and, indeed,  any employment issue, contact the offices of Toronto employment and labour lawyers Mallins Law. We regularly advise employees and employers on legal workplace issues. Contact us online or by phone at 647-792-0310 to schedule a consultation.