We have recently been asked by a client if they could treat a resignation by a disgruntled employee as a genuine resignation. The employee had felt stressed by events in his personal life and believed unjustified criticism was being directed towards him. He appeared to have verbally resigned at a performance management meeting and partially cleared his work desk.
We have recently reviewed a decision[1] of the Fair Work Commission (the Commission) involving the Victoria Daly Regional Council, Northern Territory (the Council) and an administrative employee. The decision involved an employee who attempted to retract her resignation of employment (although the employee denied she had ever resigned). It is useful to discuss the decision in the context of when an employer can accept a resignation and when a resignation may not necessarily be capable of being accepted.
In summary, our top three (3) tips for employers
Tip 1 – Deal with ‘heat of the moment’ resignations appropriately
- It is advisable for an employer to have its own support person (and offer the employee to have one as well) during meetings;
- If an employee appears to have resigned in an emotional state, employers should give the employee an opportunity to withdraw their resignation within a reasonable period of time. Failure to do so may result in a finding by a Court or Tribunal it was unreasonable to accept the resignation on the basis that an employee did not have a genuine intention to resign; and
- Employers may wish to send brief written correspondence informing an employee, who appears to have resigned in an emotional state, they have until a prescribed deadline to withdraw their resignation.
Tip 2 – Confirm the resignation in writing
- If a resignation has been communicated verbally, it is important to confirm the employee’s resignation, in writing, as soon as practicable;
- Confirming the resignation will assist an employer in demonstrating the termination of employment was at the employee’s initiative and not the employer; and
- Employers may also wish to use the opportunity to clarify any matters with the employee, in writing, that are in dispute.
Tip 3 – Notice periods – consider paying it out
- Employers should consider whether to pay out an employee’s notice entitlements instead of directing them to work out their notice. This is particularly important if there is a clearly disgruntled employee who may not act in an employer’s best interests if required to work during their notice period.
A bit of background on the jurisdiction
The Fair Work Act 2009 (Cth) (the Fair Work Act) and the jurisdiction of the Commission applies to all employees and employers in the Northern Territory except where section 53 of the Northern Territory (Self-Government) Act 1978 (NT) is applicable. Section 53 of the latter legislation establishes the Fair Work Act will not apply to tribunals established prior to 1 July 1978, such as tribunals applicable to police and prison officers.
Section 53 does not allow laws to confer power on any Court or Tribunal to hear or determine claims or disputes relating to terms and conditions of employment. This means the Fair Work Act and the jurisdiction of the Commission applies to local governments in the Northern Territory and their employees.
What happened between the Council and the employee?
The employee applied for a vacant position under the understanding she would be working from a particular location (Pine Creek) because she resided in the local area. The subsequent written letter of offer specified a different location (Katherine) where the Council’s regional office was based. The employee then accepted the letter of offer. The employee commenced work in Katherine which she understood to be a temporary arrangement.
Thereafter, the employee alleged officers of the Council became intimidating towards her in a meeting in November 2018, during which the employee was informed her position would be predominantly based in Katherine. Council’s version of events was that the employee had become visibly angry and threatened to resign if her position was not relocated.
In a subsequent meeting in January 2019 between Council’s Chief Executive Officer (CEO) and the employee, the issue of resignation was brought up again. In Council’s version of events they submitted that the CEO had verbally confirmed the employee’s resignation on two (2) occasions during the meeting. She then left the meeting before returning to ask how much notice she was required to give. The employee denied she had ever resigned.
Three (3) days later, the employee’s resignation was announced by way of teleconference and the replacement employee was introduced. The employee then immediately sought to clarify she had not resigned. The Council understood this to be an attempt at withdrawing her resignation and declined to allow the withdrawal. A letter was then subsequently issued to the employee by Council stating her employment would terminate at the end of her notice period.
What did the Council do correctly?
The Council was able to demonstrate it had confirmed the employee’s resignation during the meeting in January 2019. The employee was given a reasonable opportunity to withdraw her resignation following the meeting but she did not do so. Even if the employee had attended the meeting in January 2019 with an agitated state of mind, it was still open for her to rescind her resignation. Instead, she left the meeting before returning afterwards to ask how much notice she was required to provide.
What could the Council have done better?
It is noted that during the meeting in January 2019, Council’s CEO did not have another representative of Council in attendance. By chance, Council’s HR Manager was working in the office next to the CEO and partially overheard the discussions. Because there were no other attendees during the meeting, the Commission had to make an assessment on the credibility of the CEO’s evidence as compared to the employee’s evidence. This assessment can be inherently unpredictable at trial.
The Council did not promptly confirm the resignation, in writing, with the employee. Instead, written correspondence was only issued after the employee had inadvertently found out the Council considered her to have resigned.
Whilst not strictly a legal issue, the Council did allow the employee to work out her notice period. This is not necessarily advisable in circumstances where an employee is clearly disgruntled at their employer, irrespective of whether the employer believes it is at fault.
For the Council in this case the application was dismissed.
Our top 3 tips:
Tip 1 – Deal with ‘heat of the moment’ resignations appropriately
Tip 2 – Confirm the resignation in writing
Tip 3 – Notice periods – consider paying it out
As the lawyers for employers, we assist employers with dealing with unexpected situations such as a resignation from an employee made in the heat of the moment. Should you require assistance please contact us to arrange an obligation free consultation on +61 (07) 3876 5111
Written By
Principal
NB Lawyers – Lawyers for Employers
Assisted By
Dan Chen
NB Lawyers – Lawyers for Employers
About the Authors
Jonathan Mamaril leads a team of handpicked experts in the areas of employment law and commercial law at NB Lawyers – Lawyers for Employers who focus on educating clients to avoid headaches, provide advice on issues before they fester and when action needs to be taken and there is a problem mitigate risk and liability. With a core value of helping first and providing practical advice, Jonathan is a sought after advisor to a number of Employers and as a speaker for forums and seminars where his expertise is invaluable as a leader in this area as a lawyer for employers.
Dan Chen is a lawyer at NB Lawyers – Lawyers for Employers, and specialises in employment law. Dan is passionate about assisting business owners, small and large understand their obligations under Australia’s complex workplace relations system.
[1] Kathryn Wynne v Victoria Daly Regional Council [2019] FWC 4657.