Ontario court rules employee allowed to revoke retirement notice

The Ontario Court of Appeal has ruled an employee was in the right when she rescinded her retirement notice after circumstances changed.

In September 2016, Elisabeth English, a 64-year-old employee at Manulife, resigned after the company said it would be implementing a new computer system, citing her concern with learning a new system. When she met with her supervisor to give notice of her retirement on Dec. 31, 2016, he asked if she was sure she wanted to resign. “Not totally,” she said. The supervisor offered English an opportunity to reconsider and told her she could revoke the notice if she changed her mind.

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On Oct. 11, 2016, Manulife announced it wouldn’t move ahead with the new computer system. The next day, English told her supervisor she wanted to withdraw her retirement notice. Near the end of November, after consulting with the company’s human resources department, English’s supervisor told her the company wouldn’t accept her revocation because it planned to eliminate her position and transfer her job duties to other regions and managers.

English sued for wrongful dismissal, arguing she had the right to revoke her resignation notice any time before her retirement date. The Ontario Superior Court of Justice ruled against her and called her notice “clear and unequivocal,” noting she typed it herself and submitted it to her supervisor.

But the province’s court of appeal overturned that decision and awarded English 12 months of salary, ruling that her resignation notice was equivocal and she was entitled to withdraw it. It said the employer was bound by the supervisor’s verbal promise that she could change her mind.

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The case demonstrates how important it is for employers to enquire about the circumstances surrounding an employee’s resignation or retirement notice, says Alexander Ognibene, an associate in the labour and employment group at McCarthy Tetrault LLP.

“There are always factors that could exist and could undermine the voluntariness that’s required for a resignation to be valid,” he says. “In this case, it was necessary for human resources to look beyond the four corners of the retirement letter itself.”

Employment law requires resignation notices to be “clear and unequivocal,” but Ognibene says the circumstances in which employees give their resignation or retirement notices are so diverse it would be challenging to create a definitive list of criteria for a resignation to be valid and binding.

However, he says, resignations given in the heat of the moment when an employee is emotional or in distress, or those given under duress or in a situation of provocation are some indications that a resignation may not meet the standard.

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Noting English’s supervisor’s role in the case, Ognibene says employers need to have procedures in place for handling retirements and resignations that involve communication between supervisors and the HR department, because resignation notices are typically given to an employee’s supervisor.

He also suggests that employers keep written records of the process for resignations, which can be shared between managers and the HR department.