‘Heat of the moment’ resignations are often difficult for employers to navigate. Jo Douglas has advice on what to do if it happens to you.

It sometimes happens that employment relationships end following an argument.  

An employee may become so frustrated with whatever is causing disagreement that they simply walk off the job. He or she may say “I quit” and tender their resignation on the spot.

Up until recently, case law has indicated that an employer confronted with this kind of ‘heat of the moment’ resignation following an emotional outburst should allow a cooling off period.

This allows the employee time to reconsider their resignation in the full light of day and to clarify their intentions.
In the case of Mike’s Transport Warehouse Ltd v Vermuelen, the Employment Court recently reviewed the legal principles around ‘heat of the moment’ resignations.   

The Court has focused on the principle that a resignation is simply an employee giving notice of termination and it is a unilateral action. The key issue is not whether there has been a ‘cooling off period’ but whether the employee had in fact resigned.
 

Heat of the Moment Resignations: the principles reviewed
The Court outlined four principles to consider in relation to resignations, as follows:

• A resignation is a unilateral act. Once it has been notified (in whatever form) it is not open to the employer to claim that the employment relationship remains on foot and the resignation is of no effect;
• An employee (unlike an employer) is not required to justify the decision to resign. Nor is it required to be demonstrably well thought through.
• The key issue is whether, on an objective assessment, the employee resigned. There is no legal obligation to hold off on recognising that resignation and failure to do so could not turn it into a dismissal;
• Any concerns about whether a resignation arose from an employer’s misconduct or breach could then be addressed via the developed case law relating to constructive dismissals.

The Court also considered what may be referred to as an ‘unsafe resignation’.  

That relates to whether the words or actions of the employee are sufficiently clear that you know that he or she is in fact resigning.

Clarity is still important – and if it is not clear, caution should be exercised.

If there is a risk of a claim of some kind of breach of duty, a cautious approach is also still advised. An employer may wish to take steps to attempt to mitigate the situation by offering to resolve any known issues that the employee has brought up.  

Failure to resolve a foreseeable breach of duty, such as a claim the employee has been bullied or harassed, may result in a claim of constructive dismissal.
 

Principles applied
The above principles have been applied in subsequent cases.

In the case of Urban Decor Ltd v Yu and Jin, the Court overturned a decision of the Employment Relations Authority which had found that the employer had dismissed two employees following a heated exchange.

In this case the two employees had walked out following a heated argument and there was evidence that they had said “I quit”. The following day the employer gave notice of dismissal.

Despite these notices being given, the employer was found not to have dismissed the employees because at that point they had already resigned.

The Court was unable to review whether or not the employer’s actions preceding the resignation would have given rise to a constructive dismissal as insufficient evidence was before the Court on that point.   

Proceed with caution
‘Heat of the moment’ resignations are often difficult for employers to navigate due to the fact they may follow a period of tension built up over a period of time.

These recent cases should give employers some clarity that they do not need to allow time for an employee to reconsider a clear resignation.  

The employer can recognise the resignation and the parties can move on. 
 
If the situation is not clear and you cannot say for certain that the employee intended to resign, then employers are advised to proceed with caution and, if in doubt, take advice about the next steps to take.

This article is written for the purposes of providing general information only and is not intended to be legal advice.