Once again, employment law is in the news following the resignation of Mark Warburton from Rangers. There was initially some confusion regarding events, with Warburton and his team adamant they had not resigned from their position.
This post looks at the legalities surrounding resignation, and examines what does and what doesn’t amount to a resignation.
The relationship between an employer and employee can be terminated by either party and, depending on the circumstances, this can be with notice or without notice. If, following a disciplinary process, an employee is found to have committed an act of gross misconduct then this may result in the employer dismissing the employee without notice pay. In a similar way, if the employee feels that there has been a fundamental breach of their contract of employment by the employer, then this may allow the employee to resign without notice and thereafter claim constructive dismissal.
In the majority of terminations, notice by the party will normally be given. The minimum notice periods are set out at section 86 of the Employment Rights Act 1996. When an employee has been employed for more than one month but less than two years, the notice period will be one week. The notice period will then increase for each year of service up to a maximum of 12 weeks. Notice periods can be increased in the contract of employment and so this document should always be checked before notice of termination is given.
There are no set requirements for a valid resignation. A resignation can in some circumstances be inferred from the conduct of the employee. A verbal resignation can be just as effective. Good practice however would be for an employee to set out their resignation in writing to the employer.
Once an employee gives notice that they wish to terminate their employment, this cannot unilaterally be withdrawn by the employee. An employer will be entitled to treat the employee as having resigned from their employment even if the employee at a later date wishes to stay. A resignation by an employee will only be withdrawn if there is agreement between both parties.
Employers should also take care as to the difference between an ‘intention to resign’ and actual resignation. If an employee sets out to the employer that they may resign sometime in the future, the Employment Tribunal may consider this as merely an intention rather than an actual resignation. Employers should always consider the wording (or spoken terms) of any resignation to ensure it will constitute a valid resignation. If the employer is in doubt, then they should seek clarity from the employee.
An example of an intention to resign may be when an employee approaches the employer to say that there is the possibility of the employee finding alternative work. In the case of Ely v YKK Fasteners (UK) Ltd 1994 ICR 164, an employee was looking to leave for an alternative job in Australia. The employee told the employer that they would be resigning in the near future although no date was provided. The job in Australia fell through and wished to stay. The employer decided that the employee had resigned. The Employment Tribunal held that there had been no resignation as no termination date was provided and one could not be established from the facts of the case. However, the Tribunal decided that the employer genuinely expected the employee to resign and that the resignation would be supplied in a few days. The Tribunal found that while there was no resignation, there was a dismissal for ‘some other substantial reason’. The Employment Tribunal’s decision was upheld by the Court of Appeal.
Ambiguity can often occur in the heat of the moment. An employer may say to an employee that “you’re finished” or “get off my site” which may lead the employee to question if their employment has been terminated or if this is just the ramblings of a stressed manager that will be forgotten about after an hour. The wording of an employee may also be ambiguous with some examples including “I’ve had enough” or “I’m done”. It is often the case that matters are resolved within the work place. However, there will be occasions when the Employment Tribunal will have to determine if there has been a resignation.
In these cases, the Employment Tribunal will consider (1) the surrounding circumstances and (2) how would a reasonable employer or employee have understood the words in the circumstances. The Employment Appeal Tribunal has held that when there is ambiguity, it will be construed against the person who is seeking to rely on it. The Employment Tribunal will use the same two stage test when considering correspondence between the parties and not just for the oral words that may have been used.
An Employment Tribunal will not find that an employee has resigned if they have been forced to do so by the employer. The principles that will be applied by the Employment Tribunal in such cases was set out in the Court of Appeal case of Martin v Glynwed Distribution Ltd 1983 ICR 511.This can happen when an employee is told that they have no future with the company and it may be better for their future prospects if they have resigned rather than be dismissed. An employer in these circumstances will not be able to rely solely on a resignation letter to maintain that there has been a resignation.
When an employee is subject to disciplinary proceedings, then the employee may decide that resignation is a better outcome than a dismissal for gross misconduct. In these circumstances it will normally be held that it was the employee who resigned by their own choice.
When an employer has acted in such a way to obtain a resignation by dishonest or deceptive means, the Employment Tribunal is likely to find that there has been a dismissal by the employer rather than a resignation. An example may be when an employer suggests that there may be mass redundancies in order to reduce staff levels. Staff may look to resign and seek alternative employment rather than wait on the inevitable. If there was no basis for such a claim, then the Employment Tribunal may find that there was a dismissal rather than a resignation.
Care should always be taken when either an employer or employee decides to terminate the working relationship. Parties should be clear and concise and make reference to the termination date when the relationship will cease. Good practice is for any termination by the employee to be in writing. The resignation should always come from the employee themselves and not through an agent or third party. If there is a resignation by a third party on behalf of the employee, the Employment Tribunal may find (depending on the circumstances of the case) that there has been no resignation by the employee.
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