If an employee resigns all of a sudden or ‘in the heat of the moment’ it is generally recommended that the employer check back with the employee to make sure that’s actually what they want to do and for the employer to emphasise that they wish for the employee to remain in employment.  

 This opportunity for the employee to “cool off”, and the message from the employer that their resignation is not what the employer wants, is to assist in showing that there has not been a constructive or summary dismissal by the employer should the employee subsequently raise a personal grievance. It is important for an employer to ensure that should an employee purport to resign, the employer is confident that it is a genuine resignation.

Camille Bell, Associate at Burley Castle Hawkins Law takes a look at a recent case law to see if this is still best practice.

Recent Case Law

 Mikes Transport Warehouse Ltd v Vermuelen [2021] NZEmpC 197

A 2021 case decided in the Employment Court challenged the perception that employers must allow a “cooling off” period following all sudden resignations or resignations in the “heat of the moment”.

In Mikes Transport Warehouse Ltd v Vermuelen [2021] NZEmpC 197, Mr Vermuelen, who had come to New Zealand with his family from South Africa, entered into an employment agreement with Mikes Transport Warehouse Ltd (“MTW Ltd”) as a “sales rep”.  The list of duties in his agreement focused on the parts counter, assisting with maintaining the retail sales area, product displays, keeping the parts department clean and orderly, and following up on shortages (at para [9]). A work visa was obtained for “sales representative” and “full-time sales”. What his role actually entailed in practice was more of a pure sales role based out of head office. Little training or guidance was offered to Mr Vermuelen and “there was a clear lack of certainty as to what Mr Vermuelen was meant to do when he started, and this uncertainty continued for some weeks”.  After a couple of months (and an unsuccessful attempt to change his role impeded by MTW Ltd refusing to advertise the role to comply with Immigration NZ requirements, Mr Vermuelen was requested to attend a meeting with management, another more senior sales rep and the Group Manager: who arrived uninvited mid-way through the meeting.

Those present at the meeting talked to Mr Vermuelen about how they could assist him and support him in his role, providing advice. Mr Vermuelen responded by saying “he could not do the job and that he was resigning”. Discussion at the meeting turned to the possibility of alternative work. The Group Manager intervened at that point and raised the prospect of work with another of the Group’s companies “MTE Limited”. Mr Vermuelen said he was “keen to explore it” and it was agreed that Mr Vemuelen would work in the finishing bay of MTE Ltd.

Although it is not necessary to cover the further events in too much detail for the purposes of this article, the role with MTE Ltd did not work out due to immigration problems and Mr Vermuelen was dismissed (that event being a separate personal grievance claim by Mr Vermuelen).

The question for the Court was whether Mr Vermuelen had resigned from MTW Ltd at the meeting concerned.

Prior to this decision best practice was that, on the face of it, any resignation “in the heat of the moment” required a “cooling off” period.

Chief Judge Inglis in this decision however made it clear that this is not always necessary.  Resignation is a “unilateral act”, which did not require the agreement of an employer and, for example “an employer cannot… decline to accept a resignation and require an employee to continue to work for them”.

The key question was not whether the employee gave the advice “in a moment of distress, anger, or frustration”, or what a fair and reasonable employer would do in response to a resignation given in the heat of the moment. Instead, the “key question is whether the employee resigned.  This is an objective assessment and will likely be informed by the relevant circumstances”.

Her Honour stated, “A resignation given in clear and unequivocal terms is more likely to satisfy an objective assessment than words of resignation expressed in an equivocal manner, or which are plainly not meant to be taken seriously”.

Indications of the latter were discussed in an earlier case Boobyer v Good Health Wanganui Ltd EmpC Wellington WEC3/94, 24 February 1994, cited by Her Honour. That case cautioned about “words of resignation form[ing] part of an emotional reaction or amount[ing] to an outburst of frustration and are not to be taken literally”. In such a case it would be obvious it was so or “would become obvious upon inquiry made soberly once ‘the heat of the moment’ had passed and taken with it any ‘influence of anger or other passion commonly having the effect of impairing reasoning faculties’”.

Her Honour reasoned that although “an employer’s decision to dismiss must be justified and meet the standard of what a fair and reasonable employer could do in all the circumstances, an employee does not need to justify their decision to resign, nor does the decision need to be demonstrably sensible or well thought through”.

In the case at hand, witnesses for MTW Ltd gave evidence that Mr Vermuelen became “upset and agitated during the early stages of the meeting” when his lack of sales was being discussed and attempts were made to provide some support and assistance to lift his performance. Mr Vermuelen “acknowledged that he was having difficulties with the job and made it clear that he was resigning”, then expressed concern about the consequences on his immigration status. When the role at MTE Ltd was offered it was “enthusiastically agreed upon” and Mr Vermuelen was “relieved and positive about this turn of events.

When viewed objectively, Mr Vermuelen was found to have resigned from MTW Ltd.

Conclusion

It will likely take some time for employment advisers to change their best practice advice from the “cooling off” period should an employee appear to resign suddenly or in the “heat of the moment”. However, this case is making it clear that an employer can assess the purported resignation objectively, so that if it appears to have been a deliberate decision by the employee, the employer can rely on that as a resignation rather than having to go back and ask if they are really sure.

Importantly the assessment will turn on the facts of the case, and the surrounding events causing the employee to inform of their resignation.

*The information contained in this article is provided for informational purposes only and should not be construed as legal advice on any subject matter. 

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