There is often an assumption by employers that if an employee has resigned of their own volition, the employee will not be entitled to make claims against the company in relation to the termination of their employment. However, there are certain situations where a ‘technical’ resignation by an employee will be considered a termination at the employer’s initiative. For example, if the resignation has occurred during a period of high conflict or during an emotionally charged incident, there may be confusion as to whether an employee has voluntarily resigned or merely purported to resign in the ‘heat of the moment’.
Why is this important?
It is important that employers understand the difference between a voluntary resignation and a dismissal. An employee that has voluntarily resigned is prevented from filing an unfair dismissal application against their former employer. However, if an employee was forced to resign because of a course of conduct undertaken by their employer, the employee may have the right to file an unfair dismissal application against their employer.
Intended vs “heat of the moment” resignations
The following three cases represent some common scenarios where a purported resignation by an employee were found to be dismissals initiated by their respective employers:
Case 1: In Rodney Harvey v Valentine Hydrotherapy Pools Inc[1], Mr Harvey was embroiled in a dispute with his employer which included an allegation that he was underpaid. Following a heated discussion, Mr Harvey sent a text message to his employer stating he will be ‘handing in a resignation letter tomorrow’. He later retracted this text message and wrote to his employer that he ‘will not quit’ and will instead resume his duties. The next day he attended his rostered shift.
The employer considered that Mr Harvey had resigned upon sending the first text message and the employment relationship was at an end. Mr Harvey disagreed and filed an unfair dismissal application.
The FWC distinguished between ‘I resign’ and ‘I will hand in my notice’. It was ultimately held that the verbal conversation and text messages from Mr Harvey were not clear or unequivocal and could not therefore be an effective notice of resignation. Accordingly, the employer’s refusal to allow Mr Harvey to return to work effectively ended the employment relationship and Mr Harvey had been dismissed.
Case 2: In Bupa Aged Care Australia Pty Ltd T/A Bupa Aged Care Mosman v Shahin Tavassoli[2] (Bupa) misconduct allegations had been made against the employee. As a result, the employee was asked to have a ‘quick chat’ with the employer. In a state of confusion about the nature of the allegations, the employee, who was crying and distressed during the interview, tendered her resignation via a handwritten letter. In the subsequent Fair Work Commission (FWC) hearing she described herself as being in ‘panic mode’ during the interview. The day after the interview the employer accepted the employee’s resignation by letter and refused the employee’s attempts to rescind her resignation.
The FWC gave particular weight to the employee’s lack of English language skills and her heightened concerns about the possible reason for the interview (accepting a bribe) which stemmed from her ethnic and cultural background (Iranian). Accordingly, the FWC took the view that the employee’s resignation was not ‘given freely, deliberately and as a result of any reasoned deliberation.’ Further, the FWC held a resignation is not legally effective if it is communicated by the employee to the employer in the heat of the moment, or ‘when the employee was in a state of emotional stress or mental confusion such that the employee could not reasonably be understood to be conveying a real intention to resign.’
Case 3: The recent case, Rutter v Anglogold Ashanti Australia Ltd[3] followed Bupa. In that case Ms Rutter, an employee at a mine site, had serious food allergies which the employer was made aware of. The employer advised her that it would make arrangements to ensure Ms Rutter could safely eat anything it provided. Subsequently, the employee suffered an allergic reaction to some icing on a cake supplied by the employer which required medical treatment.
Nine days later Ms Rutter sent an email resignation to her employer outlining a list of complaints against the employer in her 20 days as an employee. Four days later, after attending at the employer’s office to discuss food safety, she sent an email retracting her resignation. Upon receipt of this email, the employer wrote to Ms Rutter advising her resignation had been accepted and her employment was at an end. Ms Rutter then produced medical evidence from two different practitioners regarding her distraught mental state at the time of the incident and on the day of her resignation.
Ms Rutter made an application to the FWC alleging that her dismissal from the employer was in breach of the Fair Work Act 2009 (Cth). The employer objected to the application on the basis that she resigned from her employment in terms that were clear and unambiguous by virtue of her email resignation.
The FWC found that Ms Rutter’s conduct in attending the employer’s office following her purported resignation to further discuss food safety in the workplace and her subsequent request to revoke her own resignation accompanied by unequivocal medical evidence of her state of mind, should have given the employer further reason to explore the true intentions of her resignation. It did not matter that the resignation was not given ‘in the heat of the moment’.
The FWC ultimately held that the employee’s resignation did not constitute a valid resignation. As such, it was a termination initiated by the employer, consistent with the findings in Bupa.
Key takeaways
For employers, the key take aways from these cases are as follows:
- If an employee states that they intend to resign but does not hand in a formal resignation, it is unlikely the FWC will find that a resignation has occurred. A statement of intention is not a commitment, and the employee may not actually resign. So, in circumstances where the employee has given notice of an intention to resign, but then continues to work or retracts their intention to resign, an employer’s acceptance of resignation may be considered termination by the employer and can give rise to an unfair dismissal claim by the employee.
- If an employee formally resigns, either verbally or in writing, but has done so either during or after an argument with their employer or a distressing event, i.e. in the heat of the moment, an employer should be wary of accepting the resignation without more.
- In a case where an employee has resigned in contentious circumstances, an employer should give some consideration to the mental state of the employee and whether the resignation was made in circumstances in which it was reasonable for the employer to understand the employee was resigning.
Recommendations for employers
If an employee files an unfair dismissal application asserting that they did not resign, the FWC will undertake a full examination of all the circumstances surrounding the end of the employment relationship. A full examination of the circumstances is required because the relevant test is based on what a reasonable person in the position of the parties would have understood as the objective position.
Accordingly, it is important that there is a written paper trail to support a finding that the employee intended to resign. In high-conflict and emotionally charged situations, it is prudent for an employer to:
- Take a step back and consider the situation on an objective basis;
- If there is ambiguity or confusion surrounding the resignation, the employer should allow a reasonable period of time to lapse to create a more objective set of factual circumstances; and
- Undertake a further enquiry into whether the resignation was intended. This can be satisfied by sending follow up written correspondence requesting that the employee confirms their notice of resignation.
Again, it is essential that the nature of the resignation is confirmed prior to the end of the employment relationship. Taking these preliminary steps will save an employer significant time and resources and minimise the risk of an unfair dismissal claim.
[1] [2021] FWC 3372
[2] [2018] FWC 1074
[3] [2023] FWC
