Resignation in the Heat of the Moment – EAT Sets Out the Legal Principles

When an employee utters words of resignation in the heat of the moment, employers are often left in doubt as to whether they should take them at face value. In an important ruling, the Employment Appeal Tribunal (EAT) has for the first time drawn together the legal principles that apply to such cases.

A community advice centre employee said words of resignation after an altercation with his line manager, giving one month’s notice of his departure. The precise words that he used were disputed. In a subsequent conversation, his employer apparently recognised that he wanted to continue in its employ, but his line manager no longer wished to work with him. The employee agreed to confirm his decision in writing but, rather than doing so, he later sought to formally retract his resignation.

In rejecting his unfair and wrongful dismissal complaints, an Employment Tribunal (ET) found that he had uttered unequivocal words of resignation, thereby bringing his employment contract to an end. He was an intelligent man with experience in the workplace and had not immediately sought to retract his decision.

Upholding his challenge to that outcome, the EAT found that the ET had erred in failing either to make adequate findings of fact or to direct itself in accordance with the applicable legal principles. The latter failure was understandable in that those principles had not previously been drawn together in a single ruling. The case was remitted for a full rehearing by a freshly constituted ET.

Giving guidance for the future, the EAT observed that a notice of resignation, once given, cannot be unilaterally retracted. In other words, the giver of the notice cannot change their mind unless the other party agrees. Words of apparent resignation must be construed objectively, taking into account all background circumstances, in accordance with the normal rules of contractual interpretation.

The subjective, uncommunicated intention of the speaking party is irrelevant and, although the understanding of the recipient is relevant, it is not determinative. The test to be applied is whether a reasonable bystander in the position of the recipient would understand that the speaker’s words constitute an immediate resignation. It is insufficient if the speaker merely expresses an intention to resign in the future.

It must appear to such a reasonable bystander that the words of resignation used are, at the time they are uttered, seriously, consciously and rationally meant or really intended. The speaker must objectively appear to genuinely intend to resign and to be in their right mind when doing so.

The EAT acknowledged that the difference between a case where resignation is not really intended at the time and one where there has been an impermissible change of mind is likely to be a fine one. The question of which side of that line a case falls is an issue of fact to be addressed by ETs in the light of all surrounding circumstances.

The EAT recognised that, in the vast majority of cases where unequivocal words of resignation are used, there will be no doubt as to what was really intended. In such cases, ETs are only required to inquire further if the question of intent is argued before them or if fairness demands that they raise the issue themselves.