When can an employee’s resignation lead to an unfair dismissal?

A recent Fair Work Commission (FWC) decision  confirms the need for employers to carefully consider whether an employee’s resignation could give rise to special circumstances that would render it unreasonable to recognise the resignation.

Case

In the case of Tao Yang v SAL HR Services Pty Ltd (‘Yang v SAL)’,[1] the FWC was tasked with determining if an employee who resigned in the heat of the moment could be relied upon by the employer as a valid resignation.

The events of Yang v Sal involved an employee turning up to work late and performing their work in an unsatisfactory manner.[2] The interaction between the employee (Yang) and the operations manager, escalated and it was during the heated exchange that Yang stated in a highly emotional manner that he had enough and wanted to leave.

On Yang’s request a phone call with the General Manager was arranged. The evidence provided supported the notion at no point during the meeting was the employee terminated or threatened with termination.[3]

Following the call between Yang and the General Manager, Yang and the Operations Manager had a calmer exchange in the car park. It was in this conversation the General Manager reminded Yang of his earlier intention to quit and the employer would respect that decision, as parting ways was the most appropriate course of action.[4]

After Yang had entered his car and left the premise to go home, the employer sent a letter to Yang’s home address confirming receipt and acceptance of the oral resignation.[5]

Yang challenged this and lodged a FWC unfair dismissal application, contending his employment was terminated by the employer.

The Decision

The totality of the actions of the employer was found to amount to a termination of Yang’s employment amounting to an unfair dismissal and awarding compensation to the amount of $4,402.90.[6]

Why? An employer is generally able to treat a clear and unambiguous resignation as a resignation, however, this case highlights the complexities employers face when a resignation is given orally, and in circumstances that give rise to the authenticity of an employee’s statement.

It is not uncommon for an employee in the heat of the moment to resign from their employment or express an intent to resign. It is in these circumstances employers need to consider how they respond to such a statement from an employee. That is because a heat of the moment resignation may be viewed as a statement made without the actual intention of the employee to resign.

The same applies to a non specific statement of wanting to leave, or they are going to leave.

This decision confirms this, with the FWC determining the resignation the employer relied on was a heat of the moment resignation, and therefore one that should not be relied on, without follow up to confirm with the employee that resignation is, in fact, the employee’s intention.

What does this mean in reality?

Employers will need to consider the facts and circumstances that give rise to an employee giving an oral resignation, whether in the heat of the moment or not. An employee’s resignation needs to be clear and unambiguous. When a resignation is given orally, employers should not accept it without question, in circumstances where it is not clear and unambiguous the employee is resigning their employment.

What should an employer do when an employee resigns verbally?

Following an employee’s oral resignation, employers should take reasonable steps to confirm the employee is resigning. A resignation from an employee should be clear and unambiguous, and as a matter of best practice confirmed in writing clearly identifying the final date of employment.

Ask the employee if what they have said to you means they are resigning their employment. An employee will generally confirm intention pretty quickly in response to this question.

Where the employee confirms their intention is to resign, ask them to put it in writing so you can then respond in writing that you accept the resignation.  In the absence of the employee putting it in writing, write to the employee confirming the verbal resignation, as provided in response to your clarification question, and that you accept it.

Employers should never rely on an employee’s oral resignation given in the heat of the moment to bring employment to an end as doing so can land you hot water before the FWC.

Again, in the absence of a clear and unambiguous resignation in circumstances that are not heated, asking an employee if it was their intention to resign is a quick way to confirm whether or not the employee means to resign.

[1] Tao Yang v SAL HR Services Pty Ltd [2023] FWC 1325 (4 July 2023).

[2] Tao Yang v SAL HR Services Pty Ltd [2023] FWC 1325 (4 July 2023) [29]-[33].

[3] Tao Yang v SAL HR Services Pty Ltd [2023] FWC 1325 (4 July 2023) [37]-[41].

[4] Tao Yang v SAL HR Services Pty Ltd [2023] FWC 1325 (4 July 2023) [43].

[5] Tao Yang v SAL HR Services Pty Ltd [2023] FWC 1325 (4 July 2023) [44].

[6] Tao Yang v SAL HR Services Pty Ltd [2023] FWC 1325 (4 July 2023) [118].