The Ontario Court of Appeal recently overturned a lower court judgment, which we previously wrote about here, finding that an employee was allowed to withdraw an “equivocal” resignation.

What Happened?

The employee began working for the employer, a large multinational insurance company and financial services provider, in 2006. Her job was to provide services to pension clients. In 2015, after an acquisition, the employer announced that it would be converting to a new computer system. At the time, the employee was a senior customer relationship manager earning approximately $128,000. She was 64 years old.

After hearing about the new computer system, the employee, who was close to retirement age, considered retiring early. She was concerned about her ability to learn a new system, and about the cost to the employer of retraining an employee so close to retirement. She met with her supervisor on September 22, 2016, and told him that as a result of the new system, she would take early retirement. He asked her if she was sure and she said, “not totally”. She also handed him a retirement letter.

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, her 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.

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

Lower Court Decision

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.

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 lower 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.

Court of Appeal Decision

At the outset, the Court of Appeal stated that the lower court committed an error by finding that the employee’s September 22, 2016 letter constituted a “clear and unequivocal” resignation. It stated:

“Her resignation notice was equivocal given the circumstances in which she presented it to [the employer], and she was entitled to withdraw it.”

The court found that the facts did not support a clear and unequivocal resignation. On the contrary, they demonstrated that the employee was equivocal when giving her resignation notice, and that her equivocation was condoned by the employer through the actions of the supervisor. It found that the employer was bound by the supervisor’s promise to the employee that she could change her mind during their meeting. She did so within three weeks and her change of mind was not challenged.

The court concluded that the employee did not in fact resign; as a result, her termination on December 12, 2016 was a wrongful dismissal.

The court allowed the appeal and fixed the damages at 12 months’ salary in lieu of notice.

Because of this finding, the court refused to address the issue of whether and in what circumstances an unequivocal notice of resignation may be rescinded by an employee.

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.