Hot-headed quitting is not a formal resignation

The Dominion Post 14 February 2008

The angry impulse to resign in the heat of the moment is not uncommon. For a brief moment it seems the only solution.

Bugger the boss! However, in the clear light of day such impromptu resignations are often regretted and retracted. The legal question then arises as to whether an employer is entitled to rely upon that resignation.

Wayne and Valerie Davis managed a Hamilton shop for Toolking Plus for three years, selling hardware and small machinery from the shop and at field days. They lived in a small flat above the shop and were happy with that arrangement.

In December 2006 the employment relationship with the director of Toolking Plus, Neil Edge, began to sour.

In late 2007 the Davis couple suffered the tragic loss of their grandson and took leave to attend his funeral. While they went on leave Mr Edge looked after the store. He became increasingly unhappy with the state of affairs.

Upon the pair's return Mr Edge explained he was unhappy with how the shop looked and summoned them upstairs to talk. Mr Edge raised his concerns and the two did not react well. Mr Davis explained to the Employment Relations Authority, which was hearing his case, that Mr Edge was angry, raising his voice, "blowing up and roaring like a bull". Mr Davis felt threatened throughout the exchange.

Mr Edge claimed Mr Davis responded by telling him to "stick his job up his a...". In response Mr Edge told them to be out by Sunday. Not a textbook example of caring communication, or, from a legal perspective, good faith.

The authority concluded that a fair and reasonable employer would not have concluded that the statement, on its own, amounted to a clear intention to resign.

The authority commented that anything said by the couple that evening which supported an intention to resign was part of an angry and heated exchange in response to criticisms.

Once the heat of the moment passed it would have been apparent to a fair and reasonable employer that they had not intended to resign with immediate effect and leave their accommodation.

Such an employer would have gone to seethem in their flat the next day once the heat and tension had diffused to discuss and clarify their intentions.

Mr Edge was not entitled to rely upon their apparent resignation without further proof of intention, such as a letter. Mr Edge's action in treating the statement as a resignation amounted to a dismissal, one which was unjustified in the circumstances.

Although Mr Davis was found to have contributed to the situation by his remark and had his remedies reduced by 30 per cent, altogether the Davis couple received $10,200 compensation and $8645 for lost earnings.

It has long been the law that an employer's ability to rely upon the resignation of an employee is tempered by the requirement to allow a "cooling off period" where that resignation is in the heat of the moment. Generally, the employer must allow an employee the opportunity to back out of resignation.

An employer should allow a cooling off period and then take reasonable steps to ensure that a resignation is genuine.

There are several warning signs. Sometimes the employee has not said when they will finish or made reference to the period of notice required. Sometimes the employee has simply walked out during work hours.

Perhaps an employee is worked up, emotional, upset or angry. Finally, there may have been no usual words of resignation used. Emotional exclamations along the lines of "I'm off, you can stick your job" should always be treated cautiously.

When things aren't going so well the desire to resign can be overwhelming. It is comforting to know that you cannot necessarily be held to resignations in such situations. The employer cannot seize upon words or actions to find resignation, they must enquire more fully into an employee's intention to resign.

Peter Cullen is a partner at Cullen - the Employment Law Firm

Email: peter@cullenlaw.co.nz