Work can be stressful sometimes, particularly if you are not seeing eye to eye with your employer. You may even find yourself in a situation where you just want to say – “I quit.” But what if you regret that heat of the moment decision? Is your resignation valid?
The 1994 case of Boobyer v Good Health Wanganui Ltd discussed “unsafe” resignations. One of the examples given was a “heat of the moment” type resignation where words of resignation form part of an emotional reaction. This type of resignation, where an employer’s actions or words prompt the employees words of resignation, can amount to a dismissal. In some instances, this has been found to amount to an unjustified dismissal because the resignation should not have been relied on by the employer. In other words, there should have been a cooling off period.
A more recent 2021 case of Mikes Transport Warehouse Ltd v Vermuelen reconsiders ‘cooling off’ periods. The Chief Judge in this case made four observations:
- Resignation is a unilateral act. Once an employee has given notice of resignation, it is not for the employer to decide the resignation was not effective.
- There is no requirement for an employee to justify their decision to resign. Likewise, there is no requirement for an employee’s resignation to be well thought through.
- The key issue is then whether, on an objective assessment, the employee has resigned.
- Concerns around whether the employees resignation was due to an employer’s misconduct or breach can be addressed by the law relating to constructive dismissals.
The test then is an objective one. Would a reasonable employer, with knowledge of the surrounding circumstances have reasonably considered the employee to have resigned?
Urban Décor Limited v Mingxia Yu
The March 2022 case of Urban Décor Limited v Mingxia Yu is an Employment Court decision, being a challenge of a decision made by the Employment Relations Authority.
The employees (Ms Yu and Ms Jin) were employed by Urban Décor Limited as curtain makers. Following a heated argument between Ms Yu and Ms Jin and their employer, they both stated that they quit. Ms Yu and Ms Jin took their belongings and left the workplace, and they did not return that day. When they did make contact with the employer, neither indicated any intention to return to work. At 4.34 am the next morning the company’s sole Director and Shareholder (Mr Han) sent letters to Ms Yu and Ms Jin which were titled “Notice of Dismissal.” Both letters sated that their employment was terminated, effective immediately.
So were the employees dismissed, or did they resign? The judge in this case applied the objective test by asking the question – would a reasonable employer, with knowledge of the surrounding circumstances have reasonably considered the employee to have resigned? Her view was, “Clear words of resignation are likely to clear that bar unless a different understanding can be informed by the surrounding circumstances.”
The Employment Court found that Ms Yu and Ms Jin had resigned and therefore the employer could not have dismissed them.
So, what does this mean for you as an employee? Before saying the words “I quit” you should be sure that your decision is well thought through and is not made in the heat of the moment. Using the objective test, it now appears to be easier for an employer to rely on words of resignation, whether given in the heat of the moment or not.
