Northern Exposure

‘I Quit’: Risks of Assuming Resignation

By Kyla Stott-Jess and Gulu Punia

A difficult employee states that he is quitting and walks out the door. Problem solved? Or just beginning? Recent cases illustrate that it’s hard to know when an employee has quit in the eyes of the courts in Canada. And it can be expensive when you get it wrong.

Taking cues from the previous pattern of the employment relationship
In Haftbaradaran v. St. Hubertus Estate Winery Ltd., at first glance it appeared clear the employee quit. After a dispute, the employee placed his keys on his boss’s desk, shook his hand, and wished him luck with his business. He gathered his personal effects and walked out. Despite this, the British Columbia Supreme Court disagreed with the employer’s conclusion that Haftbaradaran had quit.

The court ruled that the employee’s conduct must be judged against the parties’ past pattern of conduct and a reasonable interpretation of the situation. In this case, the employer knew Haftbaradaran to be hypersensitive and “emotionally labile.” He was prone to tears and other emotional outbursts.

Haftbaradaran had previously pulled a similar stunt — placing his keys on the employer’s desk and daring the employer to fire him. Based on this past pattern and the employer’s knowledge of his dramatic tactics, the court found that a reasonable observer would not have viewed the outburst as an unequivocal resignation.

The employer’s follow-up email to Haftbaradaran, in which the employer assumed an end to the employment relationship and left him no room to negotiate, was found to be a termination. Despite an employment relationship of only 23 months, the court found the employer liable for eight months of compensation.

The compensation decision was based largely on Haftbaradaran’s difficulties in finding work and his highly specific job field. What’s more, the employer was also liable for $2,000 worth of counseling sessions he needed to recover from his depression!

Taking cues from the manner and timing of a “resignation”
The case of Balogun v. Deloitte & Touche LLP is another British Columbia case where the court disagreed with the employer’s conclusion that an employee resigned.

Balogun thought he deserved a raise. His employer disagreed. Rather, Balogun was asked to address specific concerns with his work. He responded that no one else was capable of evaluating his work.

When his boss asked Balogun what this meant for the future, he replied, “I’m out of here.” He left the meeting and the workplace and went on a scheduled vacation. The employer concluded that his statement was a resignation and issued the appropriate papers.

The court found that the employee’s conduct and statement didn’t amount to a “clear and unequivocal” resignation as required by law. Given Balogun’s impending vacation, the employer had a duty to clarify Balogun’s intent. Its failure to do so meant that it bore responsibility for terminating the employment relationship.

Impact for employers
While the courts in British Columbia may be more “employee friendly” than some others in Canada, these decisions serve to emphasize how important it is for an employer anywhere in Canada to clarify voluntary resignations with employees in all situations.

Even in scenarios where the resignation seems unambiguous, as in Haftbaradaran, Canadian courts will consider things like the parties’ previous pattern of dealings and the timing of the resignation. It’s a prudent employment practice to always confirm a voluntary resignation with the employee, preferably in writing, before officially terminating the employment relationship.