A recent Ontario decision had to determine whether an employee who has resigned her position of employment by way of a notice of retirement may later rescind her written notice of retirement and keep her employment.

The Facts

The employee is a 66-year old woman who had worked for the employer since 2006 as a “senior customer relationship manager, group savings and retirement”. The employer is a large multinational insurance company and financial services provider.

In late September, 2016, the employee met with her immediate supervisor and told him she would be retiring effective December 31, 2016. At the meeting, she also gave him a written notice announcing her retirement. During this meeting, her supervisor asked her whether she was sure about her decision and told her that, if she changed her mind, she could rescind or reconsider her resignation. The written notice was sent to the human resources department.

Prior to her decision to retire, the employer company had announced a change in computer systems. However, in early October of 2016, the company announced they would not be making the computer change and, thus, the employee decided to withdraw her notice of retirement. In late October, the employee verbally notified her supervisor that she was rescinding or withdrawing her notice of retirement, but did not provide anything in writing to this effect. The supervisor did not verbally accept or reject the request to rescind the notice of retirement. Then, at the end of November 2016, the supervisor advised the employee that the employer would continue to honour her notice of resignation and her employment would end on December 31, 2016. She continued to work until December 12, 2016, at which point she was advised by the employer that she need not come back to work.

At Issue

The employee filed motion seeking summary judgment against the employer for wrongful dismissal and payment of the sum equivalent to 16 months’ salary in lieu of notice.

The court had to determine whether the employee unequivocally resigned her position of employment with the employer. It then had to determine whether the employee effectively resiled from that resignation.

The employee argued that her notice of retirement was not clear and unequivocal. At the original meeting, she had told her supervisor she was not entirely sure about her decision and, based on his statements, it was her understanding that she could rescind or withdraw the notice at any time.

The employer argued that notice of retirement/resignation was clear and unequivocal. Additionally, it suggested that allowing an employee to rescind such a notice at any time would be manifestly unfair to an employer who has to make alternate employment plans and move forward in the absence of the retiring employee.

The Decision

At the outset, the court stated that the employee’s letter was a clear and unequivocal notice of retirement/resignation, that there was no evidence that the employee was forced to submit the notice of retirement, and it was done of her own volition.

The issue, therefore, was whether the employee could resile from her notice of retirement and rescind it effectively at any time right up until December 31, 2016. The court stated:

[F]undamentally, this set of facts raises the question as to whether or not an employee can rescind a notice of retirement or notice of resignation after it has been accepted by the employer.

The court proceeded to review caselaw on the subject-matter. Previous cases had established that an employee may resile from a resignation provided there has been no detrimental reliance on the part of the employer. However, the court noted that the law has since evolved and is now more reflective of basic contract principles. Thus: “[i]f the evidence establishes that there has been an offer in the form of a notice of resignation and an acceptance of that offer by the employer, basic rules of contract dictate that there is a binding contract between the parties which cannot be resiled from.”

Applying these principles to the case at hand, the court found that the employer had accepted the employee’s notice of retirement and was under no obligation to allow the employee to rescind or resile from her notice. Once her notice of retirement was accepted, she was bound by it and basic principles of contract law do not permit rescission at any time.

As a result, the employee’s claim was dismissed.

For Help

The Kitchener-Waterloo employment lawyers at Petker Campbell Postnikoff have many years of experience advising non-unionized employees and employers on a variety of workplace issues including termination and wrongful dismissal. Our team will walk you through the details of your dispute, advise you on your rights, responsibilities and obligations, and help you understand your options.  If your dispute cannot be settled through negotiation, we can represent you through mediation and the court process.

We represent clients throughout southern Ontario, including the communities of Cambridge, Guelph, Elmira, Brantford, Fergus, Elora and the surrounding area. Call 519-886-1204 or contact us online for a consultation.