As an employer, have you ever had a situation where an employee has backdated their letter of resignation? Or have you backdated an employee’s termination?
An employer cannot terminate an employee without notifying them. Whilst a contract may allow for immediate termination without prior communication (e.g., serious misconduct), it is unusual for a contract to end retrospectively, even if there is a mutual agreement between the employer and employee.
A retrospective dismissal date can inhibit an employee from filing a timely application to contest their dismissal and potentially cause them to miss the application deadline. However, this is not necessarily the case with a retrospective resignation date, as the employee chooses the date they resign.
Stay v R & K M Jordin Pty Ltd
In the case of Stay v R & K M Jordin Pty Ltd (2024), Mr Stay made an unfair dismissal application to the Fair Work Commission (FWC) on the basis he was forced to resign due to the ongoing conduct of the company.
On 22 March 2024, Mr Stay sent an email to the company owner, business manager and company lawyer with a resignation letter attached stating:
“Following an email from Jayne (Business Manager) to my legal representative on 18 March 2024, I understand now that a resolution is not possible. Subsequently, I feel that my position is untenable, and I am forced to resign effective from that date.”
In their consideration of the application, the FWC had to determine the genuine termination date to see if the unfair dismissal claim was filed within the 21-day time limit.
There was no argument the resignation was communicated to the company on 22 March 2024. An extension of time to file for unfair dismissal would not be required if this is found to be the effective date as it is within the 21-day time limit. If the resignation took effect on 18 March 2024, the effective date Mr Stay identified in his resignation letter, an extension of time would be required because the 21-day filing period ended three days before Mr Stay’s application was filed.
The FWC considered practical problems with the idea that a resignation can operate retrospectively. An employee is bound to comply with the employment contract and implied duties until the employer becomes aware of any resignation. Likewise, the employer is bound to comply with obligations to an employee until they are aware of the resignation. This can include obligations such as Workers Compensation.
The FWC continued to explain it would be unusual if an employee is able to potentially circumvent actions constituting a breach in their employment contract or implied duties during a period of employment by retrospectively resigning, effective from a date that preceded the relevant breach.
Therefore, the termination date was determined to be when the resignation was communicated, and the unfair dismissal claim was deemed within the 21-day limit.
What can employers do?
Employers need to ensure that any resignation or termination is communicated effectively. This includes seeking written confirmation if an employee verbally resigns. Any documentation should clearly stipulate the date on which the resignation or termination is effective. If there is uncertainty about dates, employers should contact the relevant employee for clarity.
If the employee refuses to put their resignation in writing, you can write to the employee confirming the details of their resignation as you understand it. In the correspondence, you can provide the employee with the opportunity to correct any ‘misunderstandings’ about the details to their resignation. If they take up this opportunity to correct any misunderstandings, you would address their response accordingly – the lack of a response can be taken as agreement.
Employers must notify employees of employer-initiated terminations in writing, e.g. dismissal, redundancy.
