When is a resignation not a resignation

Most employers understand the requirement for a fair process and good reason for dismissing an employee. Many, however, have not grasped that the law does not permit forcing an employee to resign (otherwise known as constructive dismissal).

Ms Elise Schoonebeek was employed by Albany Insurance Services Ltd for nearly three years as a data processor. She was the sole caregiver for her mother, who broke her ankle and was in cast for two months. Albany gave her permission to start work later, provided she made the time up.

Eventually Albany became unhappy about how often she was starting late and the impact on her colleagues. However, they did not handle the situation particularly well. Barely a week before Ms Schoonebeek's mother's cast was due to come off, so that she could resume her normal start times, a director, Mr Jeremy Bleakley, suggested her mother was "taking advantage". He told her he was not prepared to tolerate her coming in late any longer. Ms Schoonebeek said if she was being asked for an exact start time she would have to resign, and said "if that's what you want I'll resign in the morning." She then left in a distressed state.

Mr Bleakley prepared a resignation letter for Ms Schoonebeek to sign and when she arrived the following day, he told her Albany accepted her resignation and asked her to sign the letter, which she did. She was told to leave immediately, even though she was crying.

Ms Schoonebeek claimed she had been constructively dismissed. The Authority found that it was insensitive for Mr Bleakley to say that her mother was taking advantage of her, particularly when Albany was aware that her mother's cast was to be removed a week later, and that she would then be able to return to her normal start time. Ms Schoonebeek became upset, and in the heat of the moment she tendered her resignation, which the Authority was satisfied would not otherwise have been forthcoming.

Rather than inviting her to go home and think about it, and having a cooling off period, Mr Bleakley decided to insist on her resignation the following day. He had no intention of allowing her to withdraw her verbal resignation should she have so desired. Her immediate departure suggested Albany Insurance always had a very clear outcome in mind.

The Authority said Albany Insurance effectively forced her to resign. This, and the failure to permit her any opportunity to withdraw that resignation, was a breach of the duty to act in good faith. Her resignation was reasonably foreseeable as a result of Albany's conduct, and therefore she was constructively dismissed.

Ms Schoonebeek was out of work for a year. The Authority accepted her evidence that she had made repeated efforts to find work. However, she could not provide documentary evidence for the first four months of that period, and so the Authority decided to award her only three months' lost remuneration ($11,000). This is puzzling - if she did make proper attempts to find work over the whole period, why confine it to three months? Alternatively, the Authority could have excluded the first four months for which she was lacking "corroborative" evidence, and awarded eight months.

The Authority also awarded $6,000 compensation for humiliation.

This case shows the difficulty for both employers and employees of dealing with situations involving resignations in the heat of the moment. The employer cannot simply take advantage of these, especially if it has caused the resignation. This was an expensive lesson for Albany.

 

Greg Cain

Greg Cain is an employment lawyer at Minter Ellison Rudd Watts.