Employee Entitled to Rescind Retirement Notice

The Ontario Court of Appeal has ruled that an employee had the right to unilaterally revoke her notice of resignation due to changing circumstances, and was wrongfully dismissed when her employer would not allow her to do so.

Quick facts

December 31, 2016, a 64-year-old employee resigned after her employer said it would be implementing a new computer system, citing her concern with learning a new system. The employee’s supervisor offered the employee an opportunity to reconsider and told the employee she could revoke the notice if she changed her mind.

On October 11, 2016, the employer announced it wouldn’t move ahead with the new computer system. The next day, the employee told her supervisor she wanted to withdraw her retirement notice.

After consulting with the company’s human resources department, the employee’s supervisor told her the company wouldn’t accept her revocation of her retirement notice because it planned to eliminate her position and transfer her job duties to other regions and manager.

The employee sued for wrongful dismissal arguing she had the right to revoke her resignation notice any time before her retirement date.

Trial decision

The Ontario Superior Court of Justice ruled against the employee and called her notice “clear and unequivocal,” noting she typed it herself and submitted it to her supervisor.

The employee appealed.

Court of Appeal decision

The Court of Appeal on the other hand, decided that the employee’s resignation notice was equivocal and she was entitled to withdraw it because the employer was bound by the supervisor’s verbal promise that she could change her mind.

Therefore, the Court of Appeal overturned the Ontario Superior Court’s decision and awarded the employee 12 months of salary.

Takeaway for employers

Voluntary separations involve many scenarios such as resignations and retirements.

Employment law requires a resignation notice including a retirement notice to be “clear and unequivocal.” To be clear and unequivocal, the resignation must objectively reflect an intention to resign or behaviour demonstrating such an intention. The context must be taken into account when determining whether a reasonable person viewing the matter objectively would have understood the employee to have unequivocally resigned.

However, as this case demonstrates, mitigating circumstances surrounding the resignation notice may make the resignation not meet the legal standard. There are always factors that could exist and could undermine the unmistakable, explicit, voluntary factors that’s required for a resignation to be valid.

Before you refuse the revocation of a notice of resignation, investigate the circumstances that brought about the resignation in the first place and what was said.

If the employer jumps the gun and assumes a resignation in his or her situation and it is challenged, courts will analyze the circumstances and assess whether there was a clear and unequivocal resignation, and a true resignation given the context (whether a reasonable person would view it as an unequivocal resignation). If the court finds there was no resignation, employers would be facing a wrongful dismissal claim.