Director who was not allowed to retract his ‘heat of the moment’ resignation wins unfair dismissal claim

A managing director succeeded with a claim of unfair dismissal against the company he founded after he stormed out of a meeting about pay, saying “I won’t be back”. Despite contacting the company the following day to clarify that he was not resigning, he was told that his resignation had already been accepted. An employment tribunal ruled that this was ‘no real resignation despite what might have appeared at first sight.’

Legal principles

As a general rule, a party who has given notice of termination has no right unilaterally to withdraw it. However, good industrial relations practice may require an employer or an employee to be given the opportunity to withdraw words of dismissal or resignation spoken in the heat of the moment. 

Facts

The Claimant founded the company in 1990 and worked there as Managing Director until his apparent resignation in 2019.

In the month leading up to the end of his employment, the Claimant had been discussing employee salary increases with his fellow directors. He claimed he was under the impression that, in addition to a general pay increase, two employees – his son and a member of his sales team – would be given a larger pay rise. In previous discussions with his directors, the Claimant had threatened to resign if the proposed pay increases did not go through.

The Claimant told the two employees about the pay increase, but this was not reflected in their next pay cheques. The Claimant said he was “devastated” and “embarrassed” by this.

The Claimant confronted the company finance director in the course of which he threw his keys down and shouted: “I told you what was going to happen”. He left, stating that “I won’t be back”. Although it was alleged by the finance director that the Claimant said “I resign”, the Claimant disputed this but did concede saying to the other company director, in a loud voice, “I believe I’ve just resigned.”

Two hours after the Claimant walked out of the office, an emergency board meeting was called, where it was unanimously agreed that the Claimant’s resignation would be accepted.

The following day, the Claimant contacted his directors to explain he would not be resigning and that he was suffering from stress. He then went to see a doctor and was signed off work.

The company sent him a letter the same day saying he had resigned in unequivocal terms, and that the company had accepted this and would be moving forward with the resignation. The Claimant was sent a P45 at the end of the month.

The Claimant issued a claim for unfair dismissal in the employment tribunal. The employer disputed that the Claimant had been dismissed and argued that he had resigned.

Employment tribunal (ET) decision

The ET ruled that the Claimant’s actions on the day he walked out “amounted to an apparently unambiguous resignation” but the circumstances in which it had happened meant the company should have given more thought before ending his employment.

Although he had previously threatened to resign, the Claimant’s apparent resignation was tendered in anger and did not amount to him carrying out a planned course of action. The ET noted “it would be normal practice for someone in a senior position to resign by giving written notice”, and a former director at the company who resigned in 2011 was allocated a ‘cooling off’ period.

The tribunal said “the directors were blinkered by an overwhelming desire to ensure that the Claimant would not be allowed to return to work, in any circumstances, and that no explanation from him for his conduct, even though it was unprecedented in some thirty years, would be accepted.”

The Claimant’s claim of unfair dismissal was therefore upheld.

Compensation had not yet been determined.

Rae v Wellhead Electrical Supplies Limited Case No: 4110014/19

Comment

Not every employee who has tendered his resignation in the heat of the moment will be as lucky as Mr Rae. For example, in Ali v Birmingham City Council UKEAT/0313/08, the tribunal concluded that there were no special circumstances which should permit the employee to withdraw his hasty resignation. There were, however, some important differences in the facts of the two cases. For example, in Ali, unlike Rae, the purported resignation was by letter rather than oral and Ali  persisted in his desire to resign even after given an opportunity to reflect. Although clearly distressed, he waited for 4 days before he requested his resignation be rescinded. The employer refused and the ET in that case said there were no special circumstances which should allow him to withdraw his resignation.

Warning: this news item is not a substitute for legal advice. The information may be incorrect or out of date and does not constitute a definitive or complete statement of the law. This news item is not intended to constitute legal advice in any specific situation. Readers should obtain legal advice and not rely on the information in this article.