A recent decision of the Fair Work Commission (“FWC”) clarifies that an employee’s repeated threats to resign do not amount to resignation and serves as a reminder that employers should exercise caution in response to “heat of the moment” resignations threats.

Background

The relationship between the employee, a pool cleaner, and his employer, a Newcastle-based hydrotherapy pool operator, deteriorated over a period of several months. The employee’s grievances included a perceived lack of recognition of his efforts, concerns that he had been underpaid by the pool operator and alleged non-compliance with the applicable Award.

The relationship breakdown came to a head during a meeting between the employee and the employer’s Administration Manager during which the employee raised underpayment issues. According to the employer, the employee concluded the meeting by saying “that’s it, I resign then”.

However, after taking two days’ sick leave he returned to work. Not satisfied with how the Administration Manager had responded to his concerns around the alleged underpayment he took the matter up with two of the employer’s management committee members. That discussion did not yield the outcome he sought, and the employee sent the employer the following text message:

“For legal purposes, I’d like you to inform [the] Committee I’ll be handing in [a] resignation letter tomorrow.”

Less than half an hour after sending his text, and after discussing the matter with his mother, the employee sent a further text which read: “I’ve been told not to quit so I will be into work as per normal”. The employee attended work later that day and completed his day’s duties. However, before beginning his next shift, he received a termination letter from the employer.

The employee subsequently challenged the termination of his employment by way of an unfair dismissal claim. The employer argued that the employee’s claim was misconceived on the basis that he had resigned and the resignation had been accepted.

Findings

The FWC distinguished between a statement that a decision had been made, such as “I resign”, and a statement of intention as to the future, such as “I will hand in my notice”. The FWC said that the latter does not amount to a resignation, even if repeated by an employee. The FWC also said that there is no need for an employer to accept a resignation – notice of resignation by itself is effective to bring the employment to an end.

The FWC ultimately found that the employee had been dismissed, and that the dismissal was harsh and unreasonable. However, because the relationship had become so fractured, the FWC determined that it would likely have only continued for a further four weeks and the employee was awarded compensation equivalent to four weeks’ pay.

Key takeaways

• Threats of resignation, even when repeated, do not amount to notice of resignation.
• It is not necessary for employers to accept or confirm a resignation to give effect to the termination of employment, although we recommend employers do acknowledge notice of resignation in writing and at the very least keep a record of the employee’s resignation, and any surrounding discussions, on file. Such records would become relevant in the event there is a dispute about when or how employment was terminated.
• Employees who resign in the “heat of the moment” (for example, during a heated discussion) should be allowed a short “cooling off” period of up to two days within which to retract or confirm their resignation.

People + Culture Strategies