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I quit…no, wait a minute
By Greg Pratch

November 02 2012 issue

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The difference between an employee resigning versus being wrongfully dismissed can have significant financial consequences for both employer and employee. But what constitutes a resignation and dismissal can be a murky area of law.

Certainly, there is a definition to go by: In Danroth v. Farrow Holdings Ltd. [2005] B.C.J. No. 2674, the British Columbia Court of Appeal stated that a resignation “must be clear and unequivocal. There must be a statement of an intention to resign, or conduct from which that intention would clearly appear.”

There have been a few cases where an employer was led to believe that an employee had resigned — ​even with the declaration “I quit” — ​but on sober second thought, the courts have ruled they were tantamount to wrongful dismissal.

A few cases shed some insight on the nuance of what actually constitutes a resignation.

Cox v. Victoria Plywood Co-Operative Assoc.

The operator of a B.C. plywood mill must have been having a bad day. After a heated argument with someone, he stated that he quit and handed over operation to his assistant. He then told the chairman of the board that he was fed up and that they would have to get someone else to run the mill. The board held an emergency meeting and decided to accept his resignation.

Not so fast, the court ruled. It determined “that the plaintiff’s apparent resignation was made in a spontaneous outburst of anger and was accepted without proper deliberation by the directors.”

Before making a decision to accept the resignation, the board should have waited until tempers had cooled down and then met with the plaintiff to discuss the situation. Having not done this, the court felt that the board acted too “hastily.”

Even though the plaintiff made a clear statement to several people that he was quitting, the plaintiff’s emotional state led the court to determine that there was no objective intent to resign. The plaintiff’s long-term service to the employer (36 years) seemed to also play a role in the court’s conclusion.

Pereira v. Business Depot Ltd.

A manager at an office supply store went on long-term disability with a plan to return to work by a certain date. When the plaintiff failed to report, the employer concluded he resigned.

The B.C. Court of Appeal determined that because the employer knew the employee was waiting on insurance proceeds and because the plaintiff had always expressed a desire to return to work, it was not reasonable to have concluded that he had resigned.

This determination was arrived at despite the fact that the plaintiff never made contact with the employer about his employment status, even after speaking with a co-worker and receiving a letter from the employer.

It would seem, therefore, that employers have to ensure that they do not focus on information in isolation and should clarify any ambiguities in the employees conduct before making a conclusion respecting an apparent resignation.

Haftbaradaran v. St. Hubertus Estate Winery Ltd.

Sometimes, calling someone’s bluff doesn’t pan out. A winemaker (who was emotional and upset) met with his boss and made comments in which he dared the employer to fire him. The meeting ended with the plaintiff handing over his keys and saying words like “good luck making wine.” The employer then sent an e-mail to the plaintiff to confirm his intent to resign. The plaintiff did not respond and instead retained legal counsel.

In finding that the plaintiff had not resigned, the court determined that his actions were part of a strategy for negotiating with the employer, similar to one he had used successfully in the past.

A reasonable observer looking at these circumstances could not find that the plaintiff had expressed an unequivocal intention to resign.

Balogun v. Deloitte & Touche, LLP

Just before an employee was to begin a two-week vacation, a meeting was held with the employer, and a dispute arose over the issue of a raise. The meeting ended with the plaintiff saying “I’m out of here” and then leaving the office.

The employer interpreted this as a resignation. The plaintiff, however, testified that if he said words to that effect, he only meant that he was beginning his vacation and had to leave for the airport. The employer had intended to ask the plaintiff for a letter of resignation, but the plaintiff left the office too quickly.

In finding that the plaintiff had not resigned, the court reasoned that “I’m out of here” was ambiguous and that was not overcome by the fact that the plaintiff turned in the keys. 

The court found that the employer recognized the ambiguity of the situation and, therefore, should have eliminated any uncertainty by obtaining a resignation letter. Even though the court expressly commented on the fact that the employee could have helped to alleviate some of the uncertainty, the plaintiff could not be faulted for this failure, “given the emotional and somewhat angry circumstances…”

What becomes apparent in these cases is that employers ought to be careful not to act too quickly in accepting an employee’s purported resignation. Careful consideration needs to be paid to the statement and/or conduct of the employee, as well as the emotional state of the parties involved. 

Furthermore, past behaviour and/or historical circumstances also inform the analysis of whether an employee has expressed a clear and unequivocal intention to resign.

Reasons: Cox v. Victoria Plywood
Co-Operative Assoc.
[1993] B.C.J. No. 2788; Pereira v. Business Depot Ltd. [2011] B.C.J. No. 1637; Balogun v. Deloitte & Touhe, LLP [2011] B.C.J. No. 1839.

Greg Pratch specializes in employment, personal injury and commercial litigation at Pushor Mitchell in Kelowna, B.C.; Haftbaradaran v. St. Hubertus Estate Winery Ltd. [2011] B.C.J. No. 1983.

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