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2 May 2022

"Screw this, I quit!"

Dealing with resignations given in the heat of the moment.

In the rough and tumble of the modern workplace, it is not uncommon for tempers to become frayed, emotions to run high and logic to run low.  Some employees find themselves using the title of this article (or some more colourful variation) once things become heated at work. However, what felt like a good decision at the time can later turn to regret the morning after. 

It used to be thought that employers had to give regretful employees a ‘cooling off’ period, during which the employee could walk back their abrupt resignation. However, the Employment Court in Urban Décor Limited v Yu [2022] NZEmpC 56 (Urban Décor Ltd) has confirmed a no take-backs approach to resignations.

Facts

In Urban Décor Ltd, two employees got into a heated argument with their boss.  During the argument, they stated they quit, took their bags and abruptly left the workplace without returning.  They did not make any contact until after work hours. In the early hours of the following morning, both employees received their dismissal letters.

The employees were initially successful in a personal grievance for unjustifiable dismissal as they did not get a ‘cooling off’ period. 

A New Approach: Did the Employee Objectively Resign?

The Employment Court disagreed with the “cooling off” approach and detailed a new one.

Instead of offering a cooling off period, the approach now is whether a reasonable employer, with knowledge of the surrounding circumstances, would have reasonably considered that the employee resigned.  Employers must consider not only what an employee says, but also how they communicate their resignation along with other relevant factors.  Clear words to the effect that “I quit” will often be interpreted as a resignation. However, care still needs to be taken when taking such words at face value.  An employer must turn their mind to the situation as a whole to be sure that this is what their employee meant.

In Urban Décor Ltd, the facts indicated the employees had resigned; they said that they quit, left and did not make contact until after work hours. Their later contact made no mention of returning to work.  An employer in those circumstances could reasonably presume that the employees had resigned.

The Employment Court cited its previous decision that made it clear employees do not need to justify their decision to resign. A resignation does not need to be demonstrably sensible or well thought through.

It is up to the employer if it wants to re-engage an employee who later regrets their resignation.

Handling a Heated Resignation

Employers need to make sure that they assess the circumstances surrounding an employee’s resignation correctly in the beginning.  They need to be sure that an employee has in fact quit. 

Below are some considerations for employers:

  • Do not jump on statements that have room for interpretation as a resignation. For example, the statement “Screw this, I am done here” may have a different meaning than “Screw this, I quit”. As usual, it is all about the context.
  • If there is any uncertainty as to an employee's intent or comments, consider asking them to confirm whether they are intending to resign.
  • Take care in communicating with an employee who is attempting to walk back their resignation. Seek legal advice in the first instance if unsure how best to engage an employee.  
  • Take notes if the resignation is not in writing.

Below are some considerations for employees:

  • Be very clear in your language if you are intending to resign. Complying with the contractual notice provisions in your employment agreement would remove doubt as to your intention.
  • Advise your employer as soon as possible if a statement you provided could be interpreted as a resignation, but you were not intending to resign.
  • Think twice before resigning in the heat of the moment. It will be difficult to walk this back without your employer’s consent.

The Saunders Robinson Brown employment team has considerable experience working with both employers and employees regarding employment law issues, including resignation matters. Please contact us if you would like our assistance.

Disclaimer

The above information is of a general nature only. The information in this article does in no way constitute legal advice and all readers should contact a law firm for advice relating to their specific circumstances.

 

 

Ramses Hunt

About Ramses Hunt

Ramses is a member of our Litigation Team and assists with employment law matters and disputes.

View all posts by Ramses Hunt
Liberty Wells

About Liberty Wells

Liberty is a member of our Litigation Team, assisting in a range of commercial and civil disputes, including insurance issues, employment matters and family law.

View all posts by Liberty Wells