We tend to think of the end of an employment relationship as a clear binary – you either quit or you get fired. Sometimes the relationship ends, but it is not exactly clear how it ended. A recent Ontario decision,1 reminds employers to look at all the circumstances leading up to the end of employment to decide whether someone resigned, abandoned or repudiated their employment. 

What happened?

The employee was an office manager for a small, family-run business. Her duties included scheduling, recording hours worked, and preparing payroll and cheques for the employer's CEO to sign. The employee's husband also worked for the employer.

The employee and the CEO had a dispute about an hours discrepancy involving the employee's husband. The employee and the CEO called and texted each other several times, but were unable to resolve the discrepancy. The employee texted the CEO she was "ready to leave and return" when her husband was paid what she believed were the correct hours. The employee left the office, leaving her keys on the CEO's desk. Although she later claimed that she had a headache and intended to return.

That evening, most of the employees met at the employee's house. They prepared and signed a document they described as a "Strike Notice". They presented the Strike Notice to the CEO and refused to work unless certain demands were met. Among other things, the Strike Notice demanded that the employee be offered her position back, her husband be paid his full wages, and she be given authority to schedule workers "without alteration by management".

In response, the CEO texted the employee. He barred her from returning to any of the employer's worksites and prohibited her from accessing any of the employer's computers or online accounts.

The employee sued for wrongful dismissal. The employer denied the employee was wrongfully dismissed and claimed she had either resigned, repudiated, or abandoned her employment. 

What did the court decide?

The court decided the employee had not been wrongfully dismissed. Rather, the following employee actions repudiated or rejected her employment contract, and the employer was justified in terminating the employment relationship:

  • the employee sought to force a change in the terms of her employment by signing the Strike Notice document;
  • the employee demanded full control of scheduling employees and that the employer would no longer be able to make any changes to the hours; and
  • the employee stated that she would not return to work unless those changes and conditions were met by the employer.

These actions were a refusal by the employee to perform her job duties. They were also an attempt to make significant changes to the duties outlined in her employment agreement. That was incompatible with her continued employment.   

The court decided the employee did not resign when she left work and left her keys on the desk. She had not unequivocally indicated to her employer that she was not returning to work. The situation was still unclear after the calls and text messages with the CEO.

Key Takeaways

This decision is a good reminder that determining whether an employee has been wrongfully dismissed, resigned, or repudiated their employment contract requires a detailed contextual analysis of all the surrounding circumstances. In particular, employers should keep in mind that:  

  • A resignation must be clear, unequivocal, and voluntary to be effective. An employee's words or actions that might have been a resignation will be considered in context. The surrounding circumstances are relevant to determine whether a reasonable person, viewing the matter objectively, would have understood the employee to have unequivocally resigned.
  • Repudiation of an employee contract can occur when an employee refuses to perform an essential condition of the employment agreement or where the refusal to perform job responsibilities are directly incompatible with his or her obligations to the employer. Similar to a resignation, this requires a contextual analysis.
  • Once repudiation of an employment contract occurs by an employee, an employer can choose to treat the employment relationship as being terminated.

Footnote

1. Anderson v. Total Instant Lawns Ltd., 2021 ONSC 2933

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.