Today's article concerns the question of when is a resignation by the employee really a dismissal in law by the employer?

Case Name and Reference: McCarthy v Gary O’ Donovan (UD 154/2009, MN 156/2009)
Court or Tribunal: Employment Appeals Tribunal (“EAT”)
Legislative Reference: Unfair Dismissals Acts, 1997 to 2007, Minimum Notice and Terms of Employment Acts, 1973 to 2005
Jurisdictions/Subject Matter: Resignations

Facts

The claimant (the “employee”) was employed as one of three assistant managers in the respondent’s (the “employer”) pub. His work comprised of general bar work and staff supervision and he reported to the general manager. The employee did not receive overtime or bank holiday pay but he took time off in lieu which was organised among the bar staff themselves.

The employee wanted to take off the 24 and 25 July and entered his request into the roster diary. On 16 July the employer was reviewing rosters in the office and he spoke to the employee over the phone about the time off he was proposing to take. There was an altercation between the two and during the course of the conversation the employee said that he was fed up and felt like “putting the keys in the letterbox”. The employer then came over to the premises. After a heated exchange of views the employer felt that the employee was effectively resigning his position. The employee’s request to bring in a third party to mediate was declined.

The employee later got a telephone call telling him not to come into work the following morning and to call to the office for a cheque and reference. The employer received a cheque for four weeks net pay and a further two weeks pay was lodged into his account in lieu of his notice entitlements. He was also given a letter of resignation to sign.


Determination

The EAT, which was chaired by Mr E. Murray in Cork on 3 February 2010, found that the employee was given no option with regard to the termination of his employment and had been dismissed. The employee’s request to introduce a third party to the discussions was declined and he had no choice but to sign the letter of resignation the following day in order to get his severance cheque as well as a favourable reference. The Tribunal awarded €22,000 by way of compensation which was reduced from €33,000 due to the contributory fault of the employee.


Legal Review

The EAT felt that the employer failed in his duty to take such reasonable steps as he could to bring about a resolution to the relatively trivial problem that had arisen. It is vital that employers are aware of the context in which resignations occur. In this case the employee clearly made a throwaway comment and in the heat of the moment the employer took this to mean that the employee had resigned without giving him a chance to explain himself or reconsider his comments.

Even where an employee uses unambiguous words of resignation that are understood by the employer, the employee may retract his resignation if it was given “in the heat of the moment”.

Where special circumstances exist, an employer should give the employee a reasonable period or cooling off period to reconsider their resignation.

In Sothern v Franks Charlesly & Co [1981] I.R.L.R. 278 it was noted that “a reasonable period of time should be allowed to lapse and if circumstances arise during that period which put the employer on notice that further enquiry is desirable to see whether the resignation was really intended and can be properly assumed, then such enquiry is ignored at the employer's risk".

In Donna Millett v Charles Shinkwin [2004] 15 E.L.R. 319 the Labour Court found – “That where an employee makes a decision to resign which is not fully informed because he/she is not in a position to fully evaluate his/her options or he/she may act on a misinterpretation of something which is said or done and the situation is still retrievable, it would be unreasonable for an employer to deny an employee an opportunity to recant within a reasonable time once the true position becomes clear and such a denial may in the circumstances amount to a dismissal.”

In Donna Millet the test of reasonableness is an objective one decided on the circumstances of the case. It was held that the refusal of the respondent to allow the complainant to continue in her employment amounted to a dismissal. In the current case there is little doubt that the employer acted unreasonably and the Tribunal specifically noted that the approach of the employer was excessively confrontational. The fact that the employer effectively gave the employee no option with regard to the termination of his employment and confirmed the resignation the next day meant that he was leaving himself totally exposed to an unfair dismissal claim.

Where an employer claims that an employee has resigned, some steps should be taken to ascertain why the employee has resigned and some effort made to get the employee to stay as otherwise the employer’s actions could be construed as constructive dismissal or an actual dismissal.