When can an employee retract their resignation?

One Minute Summary

Where an employee clearly resigns their employment and later retracts their resignation the employer is not obliged to accept the employee’s retraction.
Employers should seek to obtain any verbal resignations in writing and also respond with their acceptance in writing as soon as possible.
Case law generally allows employees to retract ‘heat of the moment’ resignations but there are certain conditions and questions around this.
Where an employee storms out and states they are ‘leaving’ the employer cannot conclude that the employee has resigned. ‘Leaving’ does not equate to a clear resignation.
With the increasing focus on workplace mental health employees may resign due to a ‘mental health episode’. How an employer responds to an employee retracting their resignation after such a resignation will depend on a variety of factors.

One of your employees, Mark, who you employed 6 months prior, and have spent considerable time and expense on training, approaches you and resigns from their employment giving you the required minimum notice. He states the reason he is leaving is that a competitor has offered him more money for the same role.

You regretfully accept the resignation and take the opportunity undertake some restructuring of work duties and not replace him at that time – thereby saving some wages costs.

Several days into his notice period Mark states that he is withdrawing his resignation as the new role has fallen through and he is now not leaving his employment.

Can Mark withdraw his resignation?

Another employee, Bruce, has been having ongoing personal issues and ends up in a heated argument at work with a fellow employee who aggravates him. Bruce shouts out that he can’t stand working there anymore and that he is leaving as he heads to his locker to get his gear after which he walks out the door.

Has Bruce resigned?

Meredith has been acting strangely lately and when her supervisor calmly questions her about it, she explodes and let’s fly with multiple colourful profanities about her working conditions. She shouts she is resigning and walks out the door.

About 15 minutes later, she returns looking a lot calmer and says she has made a mistake and wants to resume her job.

What is your response to Meredith? Do you have to take her back?

Mark’s situation is similar to a case examined by the Fair Work Commission. The employee, Steven Curr, resigned from his job (in writing) after about 6 months at Virgin giving the airline 4 weeks’ notice of him leaving. The reason he gave for leaving is that he has accepted a similar job with a competitor where he would receive a higher salary. Mr Curr’s manager accepted his resignation. During his time at Virgin Mr Curr had undergone extensive training and development as he grew fully into his role.

On receiving his resignation Virgin commenced a structural review and decided to make some changes in roles.

Several days into his notice period the new job offer fell through and Mr Curr approached his manager to withdraw his resignation. Virgin declined to accept Mr Curr retracting his resignation and he left at the end of his notice period.

Mr Curr then filed a Fair Work General Protections claim stating that he had been terminated from his role by Virgin.

Virgin responded stating that Mr Curr had resigned and provided his letter of resignation as evidence. During proceedings Mr Curr argued that the termination was caused by the employer’s actions by denying him the opportunity to retract his resignation. He stated the employer possessed the discretion to retain him or terminate him. Given the employer chose not to allow him to retract his resignation, a termination had therefore taken place.

Virgin submitted that, based on case law, the employer had the discretion to treat a clear and unambiguous resignation as a resignation.

It added that it had refused to allow Mr Curr to retract his resignation due to both the fact it had restructured various roles as a consequence of the resignation and because Mr Curr had not shown dedication to his employer by leaving after receiving extensive training when a competitor offered him more money.

In response to this argument from Virgin, Mr Curr submitted this proved the termination was unfair because the ‘lack of interest’ assertions formed Virgin’s decision criteria despite those issues never being raised with Mr Curr. He stated this resulted in ‘employer-initiated conduct’ determining the employment outcome.

Mr Curr further submitted that since he withdrew his resignation prior to the termination departure date his resignation had not in fact been legally affected at the time Virgin had made the decision to terminate him.

In his decision the Commissioner referred to section 386 of the Fair Work Act which states:

A person has been dismissed if:

the person’s employment with her or her employer has been terminated on the employer’s initiative; or
the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.

In conclusion the Commission found there was no termination by the employer due to the following points:

Mr Curr had voluntarily tendered his written resignation.
It had not been provided in the heat of the moment.
The employer had taken no action to terminate Mr Curr’s employment.
There was no obligation on the employer to allow Mr Curr to rescind his voluntary resignation.
While it was not necessary for the employer to provide a reason as to why he would not allow an employee to rescind his resignation the reasons provided in this case were legitimate.

‘Heat of the Moment’ Resignations

While the above decision was fairly ‘black and white’ the other two scenarios have more shades of grey. Whether they are a resignation will depend on both case law and facts.

The case law states that a notice of resignation can only be unilaterally withdrawn by an employee if it is given in the heat of the moment and withdrawn immediately after the ‘heat dies down’. Essentially the Courts are saying that people will make irrational decisions which they would not make with a rational mind – and are therefore allowed a second chance. The proviso is that they withdraw that resignation immediately. We would need to look at how immediate that is based on the facts. What if the so-called heat of the moment ‘resignation’ occurred at the end of the day and the employee withdraws their resignation first thing the following morning? Questions arise as to whether that was their first opportunity.

So, in respect to the fictious case of Meredith mentioned above, the facts would appear to indicate her actions in rescinding her resignation shortly after if occurred would fit in with the case law.

However, the facts in respect to Bruce are quite unclear. Bruce stating that he is leaving does not allow us to assume he is resigning. He could simply state that he had enough and was leaving early for the day. To determine whether he actually resigned we would need to look at what happens the next day and whether he has cleared his locker out – compared to his normal pattern of behaviour at the end of a shift.

Unfortunately, as an employer we need to exercise patience when such events occur. Additionally, if it appears as though it was a resignation, then obtaining confirmation in writing is highly desirable.

‘Mental Health Episode’ Resignations

There have been several such resignation cases involving what are called ‘mental health episodes’. In one such case an employee resigned by email while working his night shift. The resignation was subsequently accepted the next day by return email. The employee then claimed to have suffered a ‘mental health episode’ and had no recollection of sending the initial resignation email. He later submitted a medical certificate supporting this claim. In a complex decision the Fair Work Commission determined that the employer was not aware the employee had a mental health condition at the time the employer accepted the employee’s resignation. It therefore regarded the resignation as a resignation and did not allow it to be retracted.

Reading between the lines of the Decision, if the employer had known the employee had mental health issues at the time of accepting the employee's resignation the decision may well have been quite different.

Commentary

While a verbal resignation is still a resignation it is preferable for employers to state that any resignation must be in writing. This negates any argument around what was said by whom if the resignation is disputed by the employee. A one-to-one resignation discussion between an employee and a manager, and later denied, can get quite messy.

It is recommended that employers clearly respond to the employee that their resignation is accepted as soon as possible. If a resignation is accepted verbally the acceptance should be followed up in writing. At the very least make a quick notation of your acceptance on the resignation letter and give the employee a copy.

Heat of the moment resignations can often be retracted by the employee if done so immediately. Employers need to be conscious of the grey areas including whether it really was a ‘heat of the moment’ situation and what ‘immediately’ means.

Mental health episode resignations can be a complex area for employers to navigate. Does a manager, being aware that an employee had depression some time ago, mean that they can now blame a mental health episode for resigning. With the increasing focus on workplace mental health and psychosocial hazards this leaves employers in a precarious position trying to determine their rights.

Employers requiring assistance with terminations and questionable resignations should contact Michael for assistance.

Michael Schmidt

Kind Regards

M 0438 129 728
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www.hunteremployeerelations.com.au