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Court clarifies law on employee’s right to rescind resignation

A recent Ontario Superior Court decision involving a woman who provided her employer with written notice of retirement only to rescind it a month later offers overdue clarity on the law of employee resignation, Toronto civil litigator Bruce Baron tells AdvocateDaily.com.

“This ruling is notable because it deals with to what extent an employee can rescind a resignation,” says Baron, principal of Gaertner Baron Professional Corporation. “Previous case law cast an arguably and, perhaps understandably, employee-friendly landscape but left employers in costly and uncertain legal scenarios, often resulting in protracted disputes and litigation when an employee changed his or her mind.”

The matter involved the plaintiff, now 66, who began working for the defendant employer in March 2006. Towards the end of 2015, her employer announced that all of its customer information would be converted to a new computer system beginning in January 2016. On Sept. 22, 2016, the plaintiff met with her supervisor and advised him that she would be retiring at the end of the year.

On Oct. 11, 2016, her employer announced that it would suspend the conversion indefinitely and, as a result of this change, the plaintiff decided to withdraw her notice of retirement. There were numerous emails between the supervisor and the employer’s HR department and ultimately the plaintiff was told the company would honour her request to retire and was advised she need not come back to work.

Baron, who was not involved in the matter and comments generally, says previous case law —  one 1986 B.C. Court of Appeal decision and an Ontario Court of Appeal ruling in 2004 — essentially found an employee may rescind a resignation provided there has been no detrimental reliance on the part of the employer.

“According to those appellate decisions, the plaintiff ought to have been able to rescind her resignation,” he says. “One might have expected the Superior Court to simply follow in tow, but Justice Mark Edwards departed from the previous stream of analysis and made an important legal distinction aligning the law of resignation with already established principles of contract law.”

In his ruling, Edwards noted the law “in my view has evolved, and is now more a reflection of basic contract law. If the evidence establishes that there has been an offer in the form of a notice of resignation and an acceptance of that offer by the employer, basic rules of contract dictate that there is a binding contract between the parties which cannot be resiled from.”

Baron says the court found, as a fact, that the resignation had been accepted by the company and accordingly, could not be withdrawn irrespective of whether the employer had relied on it to its detriment.

“This argument makes good sense,” he says. “Take the converse — if an employer offered you a job which you accepted only to renege a week before your start date and refuse to employ you, are they not liable to you for breach of contract? Once an offer is accepted, the deal is struck, and that should be the end of the query.

“This case is a fine example of our courts’ continuing efforts to evolve, clarify and offer reliable and consistent legal principles for both for employees and employers,” Baron adds.

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