Heat of the moment resignations – when ‘I don’t want to work here’ isn’t enough

When an employee says they no longer want to work for you, it may be tempting to treat that as the end of the employment relationship. But a recent Fair Work Commission decision highlights the risks for employers who assume an employee has resigned without first confirming that is what the employee intended. In Jung Hong v Green Drake Pty Ltd as Trustee for the Grey Unit Trust t/as Grey Farming, the Commission found that an employee had been dismissed despite having told the employer that they no longer wanted to work for them.

Background

The employee had worked for the farming business for a number of years and had a close working relationship with the business owner.

During a conversation about some personal difficulties the employee was experiencing, the owner asked whether the employee wanted to keep working for the business.

The employee said “no”.

The owner treated that answer as the end of the employment relationship. The employee was told to collect his belongings, leave the work vehicle behind and arrange his own transport home. The business later processed his final pay.

The decision

The Commission accepted that the situation involved a mutual mistake, with the owner believing the employee had resigned, and the employee believing he had been dismissed.

Importantly however, the Commission confirmed that the question to be determined is not what a person subjectively believed occurred, but rather what a reasonable person in their position would have understood to have occurred.

The Commission found there were a number of features of the discussion that should have caused the employer to question whether the employee had genuinely intended to resign. These included that:

• the employee was visibly distressed during the conversation, and the owner was aware he was experiencing difficulties with his mental health;
• the employee’s first language was not English, and he did not understand the full content of conversations in English;
• neither person used clear language, such as “resign”, “quit”, “dismissed” or “terminated”; and
• there was no discussion about notice or final pay.

Although it was reasonable for the owner to have initially believed the employee had resigned, the Commission found that a reasonable employer would have taken steps to clarify his intentions before treating the employment relationship as having ended.

By processing the employee’s final pay and taking no steps to confirm whether he actually intended to resign, the Commission found that the employer had effectively terminated the employment relationship.

Key takeaways for employers

This case is a useful reminder that employers cannot always rely upon statements made by employees in the “heat of the moment”, or when they may not fully appreciate the consequences of what they are saying.

Situations like this are not uncommon. Employers often find themselves having difficult or emotional conversations with employees, where the employee says something in frustration or when stressed that sounds like a resignation, but falls short of being a clear and considered decision to leave.

When that occurs employers should exercise caution, particularly where:

• the employee is emotional, distressed or upset;
• there are language or communication difficulties;
• the employee is experiencing mental health or personal difficulties; or
• the employee’s intention is not expressed clearly and unequivocally.

Where there is any uncertainty, employers should allow time for emotions to settle and then confirm the employee’s intentions in writing before taking steps which signify the employment relationship.

If employers fail to take those steps, what they understood to be a resignation may later be found to be a dismissal, exposing the business to a successful employment claim.