"I Quit!" - When is a Verbal Resignation Valid?
January 2021 - 3 min read
In Conway v. Griff Building Supplies Ltd., 2020 CarswellBC 3112, an employee was found to have resigned verbally during a meeting, despite failing to provide a formal resignation letter. The Court considered the matter from the ‘perspective of a reasonable outside observer of the parties’ words and actions’ at the meeting and in the immediate aftermath. The letter was found to be a formality, and the action was dismissed.
Conway worked for Griff Building Supplies Ltd. (“Griff”) for over 20 years. The main issue was whether he had resigned during a meeting on December 21, 2018, or whether he was wrongfully dismissed shortly after. Conway maintained he did not intend for his decision to be final until he delivered his resignation letter and argued that a resignation is only legally effective when the employee subjectively chooses to resign. To the contrary, Griff maintained that Conway offered to resign during the meeting, and Griff accepted that offer; the letter was a mere formality and the verbal resignation had immediate legal effect. The Court agreed with Griff, finding that the parties agreed that Conway’s employment would end on February 28, 2019, Conway had been paid what he was owed, and the action should be dismissed.
During his time at Griff, Conway rose to management but did not have a written employment contract. For several years, Conway repeatedly told the owner, White, that he wanted to acquire an equity interest in Griff. When his offers were rejected, he often mentioned resigning. His final proposal was made on December 18, 2018, and on December 21, 2018, Griff met with Conway to reject his submission. Based on Conway’s history, White knew it was possible that he may resign, though she hoped he would not. During the meeting, it was agreed Conway would deliver a formal letter of resignation by the end of 2018, while continuing to work until February 28, 2019. Griff later decided that Conway did not need to work his notice period and returned his work possessions on December 28, 2018. A few days later, Conway incorporated a company in direct competition with Griff and was terminated for cause on January 25, 2019.
The Court found that this case involved an agreement to amend an employment contract from a contract of indefinite duration to one that would end on February 28, 2019. It was confirmed that the Court must approach the question of whether parties had agreed to make or amend a contract objectively, without reference to their subjective intentions (para 53), and that the law was concerned with reasonable expectations arising from the words and conduct of the parties. The onus was on Griff to establish that Conway had “clearly and unequivocally agreed to resign his employment as of February 28, 2019, and that the letter was to be no more than a formality” (para 65).
The Court found that when considering just the December 21 meeting, it was ambiguous whether a resignation letter was a requirement or a formality. Therefore, the Court considered the parties’ conduct before and after the meeting. Immediate steps were taken after the meeting, including informing staff and customers of the resignation. Conway became aware of such communication within hours and confirmed that it was true. As a result, it was found that “viewed reasonably and objectively, the subsequent conduct of both parties unequivocally establishes that they viewed the anticipated letter as a formality” (para 72) and that the parties agreed employment would end on February 28, 2019. When Conway entered into competition with Griff in January 2019, there was a breach amounting to a repudiation of the amended contract of employment. Griff was therefore entitled to accept the repudiation and bring the amended contract to an end, doing so on January 25, 2019. Conway’s action for wrongful dismissal therefore failed.
This decision illustrates that courts can consider an employer’s and employee’s wider conduct, as well as the consistency of their conduct, in applying the subjective and objective test that determines whether an employee has effectively resigned.
Field Law can assist employers with reviewing employment agreements and advising on the proper steps to take when dealing with employee dismissal. If you have any questions, contact a member of Field Law’s Labour + Employment Group.