When it comes to resignations, employers are being reminded to clarify beyond all doubt that a worker truly intends to quit – especially if that employee is under extreme stress. Failure to do so could result in serious financial repercussions.
The warning follows a recent Newfoundland and Labrador case which illustrates just how thorough an employer must be in order to prove voluntary resignation and protect the company from legal contention.
Employee Ralph Evans had been fleet manager at Avalon Ford auto dealership – the largest Ford dealership in Atlantic Canada – for more than 12 years when he was reprimanded harshly by the dealership’s owner.
As a result of the reprimand, Evans – who was known to have cardiac health problems – suffered what his doctor later diagnosed as an “acute stress reaction.”
Evans told the company’s comptroller; “I'm done; I can't deal with this anymore,” and despite attempts to calm him down and advice not to “do anything stupid,” Evans proceeded to the owner’s office.
Here, Evans asked if the owner wanted him to resign. The dealership’s owner, David Wilkins, told him; “No. If I had wanted to fire you I would have done it his morning."
Wilkins continued; "We are going to do fleet business with or without you. You need to walk around the building and decide what you want to do".
Evans later placed his work cell phone and keys on the general sales manager’s desk and stated "I'm done".
The next day, Evans telephoned the dealership to speak to Wilkins but was unable to reach him. Wilkins assumed that he had resigned and abandoned the dealership at their busiest time of year.
Just days later, Evans received the diagnosis of “acute stress reaction” and was given a medical note supporting his inability to return "to his present employment".
Evans finally provided Wilkins with a letter explaining why he had left the dealership and insisted his departure was involuntary. However, when the dealership subsequently received his disability claim forms, it was noted that Evans had resigned without notice and with “no prior indications or discussions of health or work issues due to stress.
As a result, Evans did not qualify for short-term disability benefits.
Justice Gillian Butler, presiding over the case, found that Evans’ resignation was in fact involuntary – she also argued that the employer’s action were not only insensitive but intended to deliberately deprive Evans of his short term disability benefits.
Butler insisted that the employer had an obligation to make its intentions clear and should have made further inquiries into Evans’ departure.
“She found that even if Mr. Evans had resigned, the duty of good faith and fair dealing was breached by the dealership in failing to provide Mr. Evans with time to cool off and reconsider,” explains employment lawyer Ashley Savinov.
The onus really is on employers to prove an employee voluntarily resigned, added Savinov.
While it was agreed that appropriate notice would be 12 months’, Evans had indicated he no longer wanted the increased responsibilities of fleet manager and Justice Butler determined that Evans’ damages should be therefore be calculated based upon a wage appropriate to a lower position.
Although Evans earned approximately $165,000 as fleet manager, a modified role would only offer between $80,000 and $90,000 – on this basis, Justice Butler calculated the pay in lieu of notice based on a salary of $85,000.
He also received an award of $14,450 based on the short term disability benefits that he should have received so, in total, the damage award for pay in lieu of notice amounted to $46,201.
Additionally, Evans earned $26,661 in “special damages” since it was found In finding that an implied term of Evans' employment was that he would receive one third of any incentive received from Ford Motor Company of Canada.
“This decision serves as a reminder to employers that they have the onus of proving that an employee voluntarily resigned,” stresses Cox and Palmer lawyer Savinov. “The employer must take steps to clarify the employee's intention by making further enquiries,” she advises.