When will a resignation not be the end of employment?

An employment tribunal has found that the managing director of an electrical supplies firm, who resigned during a dispute, had been unfairly dismissed on the basis that it was unreasonable for his resignation to be accepted by the company.

Wellhead Electrical Supplies accepted Mr Rae’s resignation following a dispute over worker’s salary increases.

Mr Rae had proposed a five per cent pay increase for staff members in the sales team, with the exception of three members of staff who would receive a 25 per cent increase. One of these staff members was Rae’s son.

Two other directors, Mr Ogg and Mr Rastall, believed that only the general five per cent increase and one other pay increase had been agreed.

Following the completion of the next month’s payroll, Mr Rae found that his son and the other staff member’s salaries had not increased. He shouted to Mr Ogg “I told you what was going to happen”, referencing a previous conversation in which he threatened to leave if the salary increases were not agreed upon.

Following the altercation Mr Rae was alleged to have stated “I resign” before leaving but disputed this. Rae later said “I won’t be back” and told Rastall “I believe I’ve just resigned”.

Crucially, Mr Rae phoned the next day to inform Mr Ogg that it was not his intention to resign, that he would be seeing his doctor and would be taking some time off due to stress. However he instead spoke with Mr Randall, who was alleged to have said: “You are no longer f****** MD. I am and I’ll see you in f****** court”.

It was argued by Wellhead Electrical Supplies’ solicitor that Rae’s had made two statements in his intention to resign, that he had not attempted to contact either of his fellow directors later that day and had handed in his keys. For this reason it was not unreasonable for the company to accept Rae’s resignation.

The tribunal noted that although it is a “general rule” that an employer can accept the resignation once an employee has spoken “unequivocal and unambiguous” words of resignation, there were “special circumstances” where the resignation could not be relied upon – such as words “expressed in temper”.

The Employment Tribunal found: “What he said and did was an angry, emotional outburst. He was suffering from stress not just at work but also at home with added responsibilities there due to his wife’s leg break and immobility. He was signed off work the following day with stress by his GP.”

“The claimant had worked with his two fellow directors for almost 30 years. They were aware of how strongly he felt about the salary increases. It was clear that he was very angry when he said and acted the way he did on 21 March. He was not acting rationally.”

Highlighting the danger of just accepting the resignation the Employment Judge said: “In their desire to rid themselves of the claimant, Rastall and Ogg seized upon what he said and did on 21 March. At no time did they ever contemplate considering whether the claimant had really meant to resign, even when they became aware the following day of the state of the claimant’s health.”

The judgment concluded that Mr Rae’s resignation was unreasonably accepted in all the circumstances and his claim of unfair dismissal was therefore upheld.

For professional and independent advice on any aspect of employment law, contact Hethertons employment team on 01904 528200.