Background
It is not unusual for employees to offer a verbal resignation, often in the heat of the moment or during a contentious incident. It is also not unreasonable that employers treat any such resignation as legitimate. However, this is yet another example where Workplace Relations law in practice can vary from an employer’s expectation. In short, these kinds of ‘heated’ or impulsive resignations may lead to potential claims of unfair dismissal where employers rely on them to end the employment relationship.
In the case of Tao Yang v SAL HR Services Pty Ltd, the worker (Yang) worked as a store person for the employer (SAL) - a lighting wholesaler. SAL asserted in the Fair Work Commission (the Commission) that the worker was constantly late for work, was tardy, did not follow reasonable directions and did not follow correct processes. Consequently, the worker had been invited to many performance meetings due to his consistently unsatisfactory conduct.
On the day in question, Yang arrived late and without a satisfactory explanation. The supervisor then raised the issue of the worker’s poor work performance. Tensions grew between Yang and his supervisor, leading to raised voices, pointed fingers and allegations that Yang was being treated “more strictly” than other workers. The supervisor reiterated his concern about the worker and his behaviour being uncooperative, his unsatisfactory attitude and again his tardiness. The worker retaliated and the situation escalated.
Following this emotionally charged exchange, Yang said that he had had enough and wanted to leave. He also alluded to the fact that he wanted to/would quit his job. The interaction ended with the worker ultimately removing himself from the workplace.
In a final exchange between the pair, the supervisor referred to what Yang had expressed earlier - being his intention to quit. Due to Yang’s ongoing behavior, the supervisor stated that he would respect Yang’s choice and that parting ways would be the most appropriate course of action. Following this, Yang drove home. The Deputy President was satisfied that Yang understood that his employment had concluded as at that point in time.
Later that day, SAL sent the worker a letter titled “Acknowledgement and Acceptance of Resignation Notice” via express post. The content of the letter reflected the discussion between Yang and the supervisor earlier that day and confirmed that SAL had received and accepted the oral resignation notice made by Yang.
What Did the Commission Find?
Ultimately, the Deputy President of the Commission found that Yang had been dismissed due to the circumstances in which the resignation was made. In coming to this decision, the Deputy President stated that the resignation was made “during a highly emotional discussion, and it could not be said that an actual resignation was provided”. The Deputy President found that it was unreasonable for SAL to treat the exchange as a real resignation and then later in the day seek to rely upon it.
Further, the Deputy President did not consider that a reasonable amount of time had lapsed after the worker indicated his intention to resign to allow for an adequate understanding of that intention to be realised by the parties, before the ‘resignation’ was accepted by the employer. Consequently, the Deputy President further found that SAL’s dismissal had been unfair, and summed up the ruling of the matter by stating that “although the conduct, attitude and performance of the worker on the day in question was not appropriate, his dismissal was disproportionate and harsh”. Yang was awarded $4,402.90 compensation and super.
This is not an isolated case. In the matter of
Bethan St John Rutter v Anglogold Ashanti Australia Limited [2023] FWC 1891, the employer likewise claimed that the employee had resigned rather than been dismissed. In that case, the employee resigned via email several days after suffering a potentially life- threatening medical episode on a minesite, and withdrew that resignation two days later. The Commission found that the employee was in “
a state of emotional stress or mental confusion" and therefore that “
her resignation was not conveying a real intention to resign". This decision echoes the matter of Yang, with both finding that the employee had been dismissed, and had not resigned based on their intent and the circumstances at the time of resignation.
What Does This Mean for Australian Employers?
This is a timely reminder for employers to carefully consider the circumstances of terminating an employment relationship. This is particularly important in an explosive situation, and in relation to a ‘resignation’ by an employee in the midst of a heated argument. As suggested by the Commission in Yang: “it may be unreasonable to assume a resignation and accept it immediately”.
As demonstrated in both these cases, there was not a reasonable amount of time following the contentious incident and the employee quitting or resigning from their role. The Commission does not specify what this (‘a reasonable amount of time’) means. Therefore, common sense will need to be applied by employers confronted with these circumstances. With this additional layer of complexity, we would urge employers to seek professional advice before finalising any employment relationship.
Blog written by Hicksons’ Partner, Warwick Ryan, and Paralegal, Sophie Amanatides.