Verbal Resignations: Managing Heat-of-the-Moment Decisions

The Challenges of Heat-of-the-Moment Resignations

We’ve all been there—pushed to the limit by a supervisor or boss until, in a moment of frustration, we imagine walking out or resigning on the spot. But what happens when that fleeting thought becomes a verbal resignation, expressed in the heat of the moment? As an employer, what are your rights? Do you have to accept the resignation? Can the employee take it all back?

These are critical questions, and two recent cases heard by the Fair Work Commission (FWC) involving a casual charity worker and an employee at a packaging company shed light on this issue. Understanding your obligations as an employer when faced with a heat-of-the-moment resignation is essential, and this is a time to pause and carefully reflect before making any decisions.

Key Cases: When Verbal Resignations Become Legal Matters

In the case of Harvey v Valentine Hydrotherapy Pools Inc (2021), the situation underscores why employers should seek written confirmation following a verbal resignation to avoid ending up in front of the Fair Work Commission.

In this case, a casual pool cleaner raised concerns about underpayment with his Newcastle-based charity employer, Valentine Hydrotherapy Pools. When the employer’s response was not what Mr Harvey expected, he stormed out of a meeting, yelling, “That’s it, I resign then!”

After taking a few days of sick leave, Mr Harvey texted his employer, stating his intention to resign. However, after speaking with his mother, he changed his mind and sent another text saying he would not be quitting and would return to work as usual, which he did.

Four days later, Mr Harvey received a termination letter stating that his resignation had been accepted. Upset, he took his complaint to the Fair Work Commission.

The Fair Work Commission ruled in his favour for two main reasons:

1. The nature of the resignation: It was an expression of intent to resign, not a formal resignation. Additionally, the employee retracted his intent to resign.
2. Continued work: The employee continued to turn up for work and perform his duties as usual.

Mariam Chalak, an employment lawyer at JFM Law, shares a three-tiered approach for employers in these situations:

1. Analyse the Situation: Especially in high-conflict situations, it’s crucial to assess all circumstances. A verbal resignation could constitute a resignation but often breeds ambiguity. Chalak notes, “It is very hard to be clear and unambiguous in verbal communications, and it obviously gives rise to an argument that the verbal notice of resignation wasn’t clear. However, a verbal notice of resignation can still be effective if it has been expressed clearly and on terms that cannot be disputed.”
2. Allow Breathing Space: Give a reasonable amount of time after the employee signals an intention to resign so that both parties can enter into conversations rationally and objectively. Chalak advises against rushing to accept a resignation in high-conflict situations, especially when there are performance issues or workplace investigations. “From a best practice point of view, take that extra step to verify the circumstances around the resignation, because if it goes wrong, the business will essentially be grappling with a legal claim,” she explains.
3. Seek Clarification in Writing: Employers should obtain written confirmation of the resignation. “These matters often arise because of uncertainty,” Chalak says. “To ensure that someone has resigned, get it in writing so you can rely on it later if the employee files an unfair dismissal application.” She also recommends involving an HR consultant to seek clarification objectively.

The Society of Human Resource Management provides templates for gaining clarification by correspondence if your organisation does not already have one in place.

Another Relevant Case: The Importance of Clear Communication

In Sean Jen Eyong v Vital Packaging [2017] FWC 887, the Fair Work Commission reviewed an unfair dismissal application stemming from a heated discussion between an employee and their employer.

During a disciplinary meeting, the employee became agitated, raising his voice and making inappropriate remarks. Despite the employer’s attempts to calm him, the employee verbally resigned, using abusive language before leaving the meeting and collecting his belongings.

To the employer’s surprise, the employee returned to work the next day. When asked to leave because of his resignation the previous day, the employee lodged an unfair dismissal claim with the Fair Work Commission.

The FWC found that the employee had unambiguously intended to resign during the heated exchange. The Commission noted that the employee had the opportunity to withdraw his resignation over the weekend but did not do so. Given the employee’s conduct, the employer was entitled to accept the resignation, and the unfair dismissal application was dismissed.

Tips for Employers

If there is any uncertainty surrounding an employee’s intention to resign, it’s crucial to clarify the situation. Before accepting a verbal resignation:

1. Clarify Intentions: Have a conversation with the employee to confirm their resignation and, if appropriate, ask them to reconsider.
2. Allow a Cooling-Off Period: Give the employee time to confirm their resignation after the initial emotional reaction.
3. Obtain Written Confirmation: If the employee still wishes to resign, confirm the resignation in writing.
4. Keep Detailed Records: Document all communications and decisions to support the resignation process.

Following these steps can help protect employers from unfair dismissal claims under the latest legislation. However, it’s important to remember that the Fair Work Commission may consider a heat-of-the-moment resignation as special circumstances, potentially allowing the employee to retract their resignation under certain conditions.