Following a recent ERA decision in which an employee was awarded sick leave after he had resigned in anger, HRM investigates the legal ramifications of accepting a resignation made by an employee in the heat of the moment.
The issue has been raised in a recent Employment Relations Authority (ERA) decisions (Mica Developments limited vs Charles Wang Labour inspector) in which an employee called a company director and made statements to the effect he was resigning. However the following day he advised his employer he had reconsidered his position and was not resigning but went on sick leave due to stress. He then resigned two weeks later. The company refused to pay his sick leave as they felt it was not genuine and argued that it had accepted his previous resignation. The ERA however found the company had not accepted his earlier resignation.
When ruling on the case, Authority Member David Appleton, said there are a number of basic principles on whether words uttered in the heat of the moment can be construed as words of resignation. They are:
- An unequivocal resignation cannot be withdrawn without the consent of the employer;
- In circumstances where a resignation is given during a heated discussion, an employer should act with caution and allow a cooling off period before taking reasonable steps to ensure a resignation is genuine; and
- An employer cannot safely insist on its interpretation of words of resignation that are an emotional reaction or amount to an outburst of frustration if it is obvious on sober inquiry that the words were not meant to be taken literally and that this would have been obvious if the employer had made enquiry after the heat of the moment had passed.
Karen Radich, barrister with Clifton Chambers, told HRM the key lesson for HR managers is that they should not leap to process a resignation that is tendered in heated circumstances.
“The notion of a cooling-off period has been mentioned in a number of cases now, including at Employment Court level. The notion of allowing a person time to cool off is particularly relevant where the apparent resignation is part of an outburst of frustration or is an emotional reaction,” she explained.
She advised that the task of following up the intentions of an employee once the heat of the moment has passed may be best undertaken by the HR person rather than by the manager, particularly if the manager was part of the original discussion with the employee.
“Taking this step will also avoid any later factual dispute about what the employee actually said to their manager and whether they even resigned at the time or simply expressed their displeasure at something,” Radich said. “Once an employee confirms their resignation in a cooler state - preferably the next day, after time to think about it overnight -, the employer should feel free to rely on that.”