I thought you quit

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I thought you quit

  1. 1. “I thought you quit?” Agenda 1. What is a resignation? 2. Essential considerations before accepting a resignation 3. Pitfalls of resignations 4. Employer obligations following a resignation 5. Retirements and the Human Rights Code Proper handling of resignations and retirements George A. Leibbrandt, Partner
  2. 2. • Resignation: “Formal renouncement or relinquishment of an office. It must be made with intention of relinquishing the office accompanied by the act of relinquishment”. - [Black’s Law Dictionary] (1)Evincing an intention to resign; followed by (2)An action consistent with that intention; 1. What is a resignation?
  3. 3. • Example: – University undergoes organizational change – Director of Relations writes to resident stating that he believes the change to be a demotion and that he will be seeking other employment – President treats letter as a resignation despite Director’s insistence that he was not resigning – Is this a resignation? 1. What is a resignation?
  4. 4. • Not a resignation • The Director made it clear after the letter had been sent that he was not resigning – No clear unequivocal intention of resigning • Held to be a termination without cause • See: Moore v. University of Western Ontario, 1985 CarswellOnt 877 1. What is a resignation?
  5. 5. Retirement: “Termination of employment, service, trade or occupation upon reaching retirement age, or earlier at election of employee, self-employed, or professional”. - [Black’s Law Dictionary] 1. What is a resignation?
  6. 6. a) How did the employee resign? – Always get a signed and dated letter! – Letter should confirm that the resignation is voluntary – Letter should confirm actual date of resignation 2. Essential Considerations before accepting a resignation
  7. 7. b) The Facts are Everything - Long service or short-service employee? -Has anything major occurred in period immediately preceding resignation? -Has the employee’s salary and/or job responsibilities recently been altered? -Would an objective observer consider the employee to be sophisticated? 2. Essential Considerations before accepting a resignation
  8. 8. c) Does Contract specify employee notice required? - Employee needs to provide “reasonable notice” of resignation if contract is silent - Note: notice that employee has to provide is not the same amount of notice that an employer dismissing an employee would have to provide 2. Essential Considerations before accepting a resignation
  9. 9. c) Does Contract specify employee notice required? • Blackberry Limited v. Marineau-Mes, 2014 ONSC 1790 (CanLII): - Contract stated that employee had to provide six (6) months notice before resigning - Employee was leaving to join Apple Inc. and only provided two (2) months notice - ONSC upheld the six (6) month notice period in the contract 2. Essential Considerations before accepting a resignation
  10. 10. c) Does Contract specify period of notice •Asphalte Desjardins inc. c. Commission des normes du travail: - Contract specified employee notice required - Employee provided notice required - Employer “waived” notice to accelerate departure and stop paying - Legitimate? Stay tuned: Supreme Court of Canada to decide 2. Essential Considerations before accepting a resignation
  11. 11. d) Was this a resignation or a retirement? - Retirement should be treated separately from an ordinary resignation 2. Essential Considerations before accepting a resignation
  12. 12. a) Employee silence b) Mixed messages c) “Spur of the moment” decisions d) Notice of resignation too short, too long 3. Pitfalls of Resignation
  13. 13. 3. Pitfalls of Resignation – a) Employee Silence • Where the employer does not hear anything from the employee – i.e. the employee does not show up for work • A resignation falls within the exclusive purview of the employee – Cannot be “deemed” by the employer
  14. 14. • If employee is not responding or doesn’t show up for work, employer needs to act with utmost fairness • Proper response: write clearly worded letter • If no communication received by employee by specified date, then employer will assume job abandonment • Make sure letter is received • If long-service employee, consider sending 2nd letter 3. Pitfalls of Resignation – a) Employee Silence
  15. 15. • Lack of clarity – There needs to be clear and unequivocal evidence that the employee has intended to resign – No conditions should be attached to the resignation 3. Pitfalls of Resignation – b) Mixed Messages
  16. 16. • “Whether words or actions equate to a resignation must be determined contextually. The surrounding circumstances are relevant to determine whether a reasonable person, viewing the matter objectively, would have understood [the employee] to have unequivocally resigned”. – See: Kieran v. Ingram Micro Inc. 2004 CanLII 4852 (ONCA) 3. Pitfalls of Resignation – b) Mixed Messages
  17. 17. • In Kieran v. Ingram Micro Inc., the Plaintiff stated that he couldn’t work at the company’s current location if X employee was named as the new President • X was named as the new President and the employer treated the Plaintiff’s statement as a resignation • Ontario Court of Appeal held that the Plaintiff was terminated without cause 3. Pitfalls of Resignation – b) Mixed Messages
  18. 18. • Justice Lang writing for the ONCA: “In those circumstances, given the principle that a resignation must be clear and unequivocal, it cannot be said that Mr. Kieran’s statements amounted to a resignation. Viewing his statements contextually, Mr. Kieran did not resign, and would not have been seen by a reasonable person to have done so”. 3. Pitfalls of Resignation – b) Mixed Messages
  19. 19. • Another Example: – Car salesman refuses to sign sales agreement which restricts his commission – Employer tells car salesman to sign agreement or he will be terminated – Car salesman still refuses to sign and does not return to the workplace – Is this a resignation? 3. Pitfalls of Resignation – b) Mixed Messages
  20. 20. • Court holds that employee was terminated without cause – No unequivocal voluntary action to resign • Court awards compensation • See: Gallagher v. John Bear Pontiac Buick Cadillac Ltd., 2006 CarswellOnt 409 (S.C.J.) 3. Pitfalls of Resignation – b) Mixed Messages
  21. 21. • A resignation during a spontaneous outburst in highly charged emotional circumstances can undermine its essential voluntariness – See: Wilson v. Legacy Trust, 2014 ONSC 2070 • Moreover, sometimes an employee’s actions are equivocal such that his actions canvassed cannot be construed as a voluntary resignation 3. Pitfalls of Resignation – C) “Spur of the Moment” Decisions
  22. 22. • Example: – Employee with 26 years of service submitted resignation on April 2, 2012 – On April 16, 2012, employee verbally advised employer that he wanted to rescind resignation – This was followed by a letter confirming the same on April 20, 2012 – Employer refused to allow employee to rescind resignation 3. Pitfalls of Resignation – C) “Spur of the Moment” Decisions
  23. 23. • Arbitrator considered contextual factors: – Long-service employee – Tried to rescind resignation soon after employee resigned – Employee suffered from severe depression • Employee was off his medication – Employee recently went through a divorce – Employee recently declared bankruptcy 3. Pitfalls of Resignation – C) “Spur of the Moment” Decisions
  24. 24. • Arbitrator held that the employee did not have the subjective intent to resign from his position – The employee (unionized) was reinstated to his position – The employee was also awarded 4 months of compensation, subject to mitigation • See: Re Community Living Chatham-Kent and OPSEU, Local 148 (Butler), 2014 CarswellOnt 1126 (Steinberg) 3. Pitfalls of Resignation – C) “Spur of the Moment” Decisions
  25. 25. • Where the evidence will show that the employee was led to believe that he/she had to resign/retire • Example: employer tells employee that she can resign or be fired and employee subsequently resigns – Is this a voluntary resignation? 3. Pitfalls of Resignation – C) Employer compelled resignation
  26. 26. • No! • If an employer tells an employee to quit or be fired, this is an involuntary resignation and will be treated as a termination – See for example: Aubin v. H.B. Group Insurance Management Ltd. (1987) 62 O.R. (2d) 191 3. Pitfalls of Resignation – C) Employer compelled resignation
  27. 27. • Up until the effective date of the resignation, the employer must: – Continue to pay the employee regular wages; – Continue the employee’s benefits coverage (if applicable); and – Pay the employee all accrued but unused vacation 4. Employer obligations following a resignation
  28. 28. • Other considerations: – An employee can still be dismissed for cause during a resignation notice period – An employee can still be constructively dismissed during an employee notice period – Employment Standards Act, 2000, sections 56(1) (b), 63(1)(b), 63(1)e and 63(3) 4. Employer obligations following a resignation
  29. 29. • Before: “age” in the OHRC was defined as between 18-65 – Result of this was that an employer could create mandatory retirement policies and not violate the OHRC • Change on Dec. 12, 2006: “age” in the OHRC amended to be just 18 years+ – The result is that most mandatory retirement policies will violate the OHRC Retirement and the Ontario Human Rights Code (“OHRC”)
  30. 30. • Can an employer have a mandatory retirement policy that doesn’t violate the OHRC? – Yes, but only if the policy can be shown to be a “bona fide occupational requirement” • Employers can also develop “retirement programs” that aren’t mandatory Retirement and the Ontario Human Rights Code (“OHRC”)

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