Australia: Resignation from employment - can you withdraw it?

Last Updated: 2 April 2018
Article by Richard Ottley

INTRODUCTION

Employers will from time to time be faced with the situation where an employee hastily submits a resignation in the "heat of the moment". Then within a day or so of submitting their resignation, they seek to withdraw it. Can the employer, simply refuse to allow the employee to withdraw the resignation in this situation without risking an unfair dismissal claim?

This was the situation which faced BUPA Aged Care as reported in a decision in BUPA Aged Care Australia Pty Limited t/a BUPA Aged Care Mosman v Shahin Tavassoli (Tavassoli). In this instance, the circumstances in which the resignation was submitted by the employee, and their state of mind either apparent or which should have been apparent, was such that their letter of resignation was found not to be legally effective. Thus termination based upon the letter of resignation was found to be at the initiative of the employer (not the employee). This meant the employee was entitled to bring a claim for unfair dismissal.

This article looks at the various principles which the Fair Work Commission has formulated in this area as seen against the factual background in Tavassoli.

DECISION OF THE COMMISSION AT FIRST INSTANCE

The employee, Ms Tavassoli, was employed by BUPA's Mosman Aged Care Facility as a nurse. She was a refugee from Iran with limited English language skills. She claimed to have been dismissed from her employment notwithstanding that she resigned from her employment on 16 November 2016 by the provision of a written notice of resignation on that date.

On 16 November Ms Tavassoli was not rostered to work but attended a training session at the workplace in the afternoon. At approximately 2.00 pm, a Mr Brice from the employer went to the training room and asked Ms Tavassoli to step aside. He walked her out of the building and then informed her that quite serious allegations had been made against her and he was awaiting documentation to come through before he could discuss it with her.

Mr Brice suggested Ms Tavassoli get a coffee and await further instruction. In any event, some two hours passed before she was summoned to the meeting. During that period Ms Tavassoli sat outside the facility with no idea why she had been escorted off the premises. She actually had no money on her, so had nowhere to go.

Whilst sitting outside on the footpath and deeply upset, Ms Tavassoli came to the conclusion that the allegations against her involved a six pack of beer that had been offered to her by a resident. Ms Tavassoli testified to the Commission that she did not want to be accused of being a thief or terminated for stealing, due to her cultural background. As a result, she asked for help from a colleague to draft her resignation letter.

When Ms Tavassoli re-entered the facility, she handed Mr Brice her resignation letter which contained the provision of 4 weeks' notice. Mr Brice did not accept the resignation at that time. Another employee then read out letters from BUPA containing allegations of misconduct (which had nothing to do with a six pack of beer) and advised her of her paid suspension and the upcoming investigation of the allegations. The allegations themselves concerned issues around Ms Tavassoli's attitude to residents and resident care.

Mr Brice did not provide Ms Tavassoli with a copy of the correspondence which was read out at the meeting. Ms Tavassoli did not fully understand the correspondence, however she did not want to participate in the investigation and pressed her resignation.

Mr Brice told Ms Tavassoli that unless the date of resignation was changed so it had immediate effect she would still be required to participate in the investigation. In response to this, Ms Tavassoli then scribbled out the reference to 4 weeks' notice and handed her letter of resignation back to Mr Brice.

On 17 November 2016 Mr Brice sent Ms Tavassoli a letter confirming acceptance of her resignation. On 18 November at 9:00 am Ms Tavassoli attended the facility and tried to rescind her resignation but this request was refused. She then filed a claim for unfair dismissal.

The matter came before Commissioner Riordan in July 2017. The main argument advanced on behalf of Ms Tavassoli was that she had resigned from her employment but was forced to do so because of the conduct of the respondent employer (and therefore had in effect been dismissed by her employer within the meaning of s. 386 (1) (b) of the Fair Work Act (Act)).

The respondent asserted that it had not conducted itself in a manner which had forced Ms Tavassoli to resign. Further that once a resignation is given, an employer is entitled to accept that resignation.

Commissioner Riordan having criticised the conduct of the respondent and how it impacted on Ms Tavassoli's state of mind which had "traversed into the realm of confusion and self-condemnation in an attempt to justify the actions of a long term employer", concluded that Ms Tavassoli had been constructively dismissed. He further found that Mr Brice should have accepted Ms Tavassoli's attempt to rescind her resignation.

He considered that the period of time for someone in her state of mind, having regard to her poor English skills and emotional state, was such that her decision to seek to rescind her resignation occurred within a reasonable period. He concluded that the respondent had acted in an unreasonable manner and that the dismissal was harsh and unjust and ordered reinstatement.

DECISION OF FULL BENCH OF FAIR WORK COMMISSION

BUPA applied for permission to appeal Commissioner Riordan's decision. The Full Bench granted permission to appeal on certain of the applicant's grounds. Having reviewed the authorities, it then proceeded to provide guidance as to how the relevant sections in the Act: s. 386 (1) (a) and 386 (1) (b) should be interpreted in the context of a resignation by an employee.

S. 386 (1) (a) of the Act states that a person has been "dismissed" if their employment has been terminated "on the employer's initiative". Even if the employee resigns this may be a dismissal on the employer's initiative if it happens in the "heat of the moment". In the Full Bench's words:-

"47 (1) There may be a dismissal within the first limb of the definition in s.386(1)(a) where, although the employee has given an ostensible communication of a resignation, the resignation is not legally effective because it was expressed in the "heat of the moment" or when the employee was in a state of emotional stress or mental confusion such that the employee could not reasonably be understood to be conveying a real intention to resign. Although "jostling" by the employer may contribute to the resignation being legally ineffective, employer conduct is not a necessary element. In this situation if the employer simply treats the ostensible resignation as terminating the employment rather than clarifying or confirming with the employee after a reasonable time that the employee genuinely intended to resign, this may be characterised as a termination of the employment at the initiative of the employer."

The Full Bench then considered s. 386 (1) (b) of the Act which states that a person has been dismissed if the person has resigned from his/her employment but was forced to do so because of conduct or a course of conduct engaged in by his/her employer. In this context, it considered that whether or not an employee will be found to have been dismissed will depend upon the employer's conduct, and whether or not it engaged in conduct with the intention of bringing the employment to an end or knowing that it was the probable result of its conduct. In the Full Bench's words:-

"47 (2) A resignation that is "forced" by conduct or a course of conduct on the part of the employer will be a dismissal within the second limb of the definition in s.386(1)(b). The test to be applied here is whether the employer engaged in the conduct with the intention of bringing the employment to an end or whether termination of the employment was the probably result of the employer's conduct such that the employee had no effective or real choice but to resign. Unlike the situation in (1), the requisite employer conduct is the essential element."

The Full Commission then considered the appeal in the context of the above tests. It concluded that Ms Tavassoli could not succeed in relation to the test under s. 386 (1) (b) as it was not satisfied that her former employer had so conducted itself as to cause her to resign in the first place. The fact that Mr Brice had told her that she would have to resign immediately in order to avoid an investigation, may have influenced her decision to alter the notice period. However Mr Brice's action was not the cause of Ms Tavassoli's prior decision to resign in the first place. The Commission reiterated that the fact that an employer raises allegations of misconduct against an employee and gives notice of an investigation is not without more, forcing the employee to resign.

BUPA submitted that Ms Tavassoli had advanced her case on the basis she was dismissed within the meaning of s. 386 (1) (b) and such a case could not succeed either before the Commission or now.

The Commission was satisfied that Commissioner Riordan's decision was appealable because he had applied the "special circumstances" test (being a test applicable to a case advanced under s. 386 (1) (a)), to the case Ms Tavassoli had advanced, which was a case for constructive termination under s. 386 (1) (b). Notwithstanding this, his decision did "expose at least the possibility that the Commission's jurisdiction might have been successfully invoked under s. 386 (1) (a)".

In the circumstances the Full Bench granted permission to appeal but referred the question of whether or not Ms Tavassoli had been dismissed within the meaning of s. 386 (1) (a) to Commissioner Cambridge to decide. The reason for not deciding this question themselves was that the Full Bench considered that procedural fairness demanded that BUPA be given the opportunity of mounting an evidentiary case which addressed a different argument being the argument under s. 386 (1) (a).

In summary, the Full Bench considered that Ms Tavassoli had a claim with sufficient merit to be argued but which had not been adequately argued at first instance.

DECISION OF COMMISSIONER CAMBRIDGE

Commissioner Cambridge was essentially tasked to determine whether or not Ms Tavassoli had been dismissed at the initiative of her employer. This involved an examination of Ms Tavassoli's state of mind and consideration of whether her resignation had been submitted in the "heat of the moment".

BUPA asserted that the circumstances surrounding the resignation did not amount to "special circumstances". That is to say the resignation was a conscious and deliberate act and the conduct was unambiguous. Ms Tavassoli's level of English skills and other cultural or ethnicity factors did not establish any special circumstances. In essence, the conduct of Ms Tavassoli was an active conscious decision demonstrated by her persistence to resign when she resubmitted a resignation letter after its initial rejection.

Commissioner Cambridge had this to say about a heat of the moment resignation:-
"41 One such circumstance is that of a "heat of the moment" resignation whereby because of special circumstances and/or a combination of other factors, it was unreasonable for the employer to assume that the resignation was genuinely intended. In these circumstances, if an employer accepts the resignation forthwith, and acts upon it, it may be held to have been a legally ineffective resignation and the actions of accepting the resignation establish that the employment was terminated on the employee's [sic] initiative, and in satisfaction of the terms of s. 386 (1) (a) of the Act."

Commissioner Cambridge was of the view that Mr Brice had significantly misjudged the mental state of the applicant and failed to recognise that she was acting irrationally or as a result of a disturbed mind. The amended resignation was not given freely, deliberately or as a result of any reasoned deliberation. The level of confusion was reflected by Ms Tavassoli writing the wrong day of the week on the resignation letter.

When all of the circumstances of the 16 November meeting were carefully examined it was in Commissioner Cambridge's view, clear that Ms Tavassoli was expressing irrational behaviour at the time. Her level of emotional distress was simply not recognised. In those circumstances the resignation should not have been accepted, particularly having regard to the applicant's lack of English skills and certain ethnic and cultural factors which played a part.

In those circumstances Commissioner Cambridge concluded special circumstances existed such that the resignation of the applicant was legally ineffective. Therefore the employment of the applicant was terminated on the employer's initiative and in satisfaction of the meaning of "dismissed" under s. 386 (1) (a) of the Act. Commissioner Cambridge then returned the file to the Full Bench to decide what orders should be made.

LESSONS FOR EMPLOYERS

The Commission's decisions in Tavassoli highlight the need for employers to be circumspect about how they react to employees who submit a resignation "in the heat of the moment".

It is not uncommon for employees to submit a letter of resignation shortly before or at a disciplinary meeting with a view to protecting their employment record. However, if a letter of resignation is submitted in heated circumstances, employers who subsequently refuse a request within a reasonable time, to accept a rescission of the resignation, run an appreciable risk of a successful claim for unfair dismissal. Such a claim would be made on the basis that the termination was at the initiative of the employer (s386 (1) (a) of the Act). Employers faced with a purported rescission of a resignation should carefully consider whether in the circumstances, sufficient time has passed for the resignation to be considered legally effective.

One approach to mitigating risk in respect of heat of the moment resignations is, for employers to check with the employee if they still intend for their resignation to proceed. Such action should be taken within a reasonably short time of an employee submitting a resignation (such as the next day). A confirmation by the employee of the resignation should then provide a reasonable defence to any subsequent challenge by the employee that the resignation cannot be relied upon.

If in any doubt about what to do in the above circumstances it is advisable to seek legal advice.

For further information please contact:

For further information please contact:

Richard Ottley, Partner
Phone: + 61 2 9233 5544
Email: rbo@swaab.com.au

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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