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Case law has not always been clear on what constitutes a resignation by an employee. More often than not, it seems very difficult for an employer to establish a resignation where the employee changes his/her mind down the road. However, in Kerr v. Valley Volkswagen, 2014 NSSC 27 (CanLII), the court did just that.

Mr. Kerr had been employed as a Parts Manager for the Defendant for 7.5 years. The court accepted the version of events by the Defendant which cited that on June 3, 2013, the Plaintiff gave it an ultimatum by demanding “I want a $100 per week raise or I’m gone.” He went on to state that he had another job opportunity available to him that paid him more money, and that he intended to quit if he did not receive a $100 per week raise. The Defendant’s evidence was that it felt backed into a corner but did not acquiesce to the demand. Mr. Kerr reported to work for the next 21 days. The court found that he took no steps to retract his ultimatum. The Defendant’s evidence was that Mr. Kerr’s performance did not warrant a raise, and that it could not continue any longer under the threat of the Plaintiff’s quitting. As a result, the Defendant decided to respond to Mr. Kerr’s June 3rd ultimatum by saying ‘no’ to his raise demand and by accepting his resignation. Mr. Kerr’s supervisor explained to him how he had backed the Defendant into an impossible corner by making his ultimatum, and he replied “I know I did.” He then asked if he could have his job back, and the supervisor replied “no”.

The court outlined the test for a resignation which is whether it is clear and unequivocal. To be clear and unequivocal, the resignation must objectively reflect an intention to resign, or conduct evidencing such an intention, such that a reasonable person, viewing the matter objectively, would have understood the employee to have unequivocally resigned.

The court differentiated this situation from where (1) an employee expresses dissatisfaction with an employer or about a wrong committed by the employer (real or perceived), and declares an intention to seek other employment without words or actions indicative of an immediate firm intention to quit and (2) where the employee, in a state of depression, frustration or emotional angst makes a (usually) hasty statement that he or she quits and shortly thereafter, realizing the rashness of his or her statement or actions, either retracts the statement in short order or engages in discussions with the employer to patch up the dispute leading to the declaration of intent to quit. Both of these situations would not be characterized as a resignation. Here, the court characterizes Mr. Kerr’s situation as one where the words or actions of the employee demonstrate a clear intent to resign, either unconditionally, or as part of an ultimatum.

What about Mr. Kerr’s retraction of his ultimatum? The court found that the retraction of a clear notice to quit must occur and be communicated to the employer before the employer communicates acceptance of the resignation to the employee. In this case, the employer accepted the resignation before the retraction was communicated.

The court concluded that Mr. Kerr’s June 3rd threat to resign was made in clear and unambiguous terms. In all the circumstances of this case, a reasonable person would have understood that Mr. Kerr was serious in his intention to resign and take up another job opportunity that would pay more, if he was not given the demanded raise.

The take away from this case is that threats of resignation and ultimatums can be relied on by the employer in the right circumstances. Providing the employee with some “breathing room” after his initial threat but accepting the resignation before it was retracted played out well for the employer. Confirming in writing the employee’s statement would have also been helpful.

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