Resignation Letters Not Always Determinative

“You can’t fire me, I quit!”  is a common movie refrain and one that many employees have probably repeated – at least in their own heads.  But what about the reverse?  Can one claim that he has not quit, but rather was fired – even if he has tendered a letter of resignation?

That question was at the heart of the recent decision of the British Columbia Supreme Court case in Chan v. Dencan Restaurants Inc., 2011 BCSC 1439.

The facts in Chan are straightforward enough: long-term Denny’s Restaurant employee is faced with an ultimatum from his supervisor:  you can resign, or we can fire you.  Given the choice and fearing what a termination would mean for future job prospects Mr. Chan elected to ‘resign.’ He later claimed constructive dismissal claiming damages for same.

In resolving that Mr. Chan had been dismissed from his employment the Honourable Justice Nathan Smith, citing the 1991 Saskatchewan Court of Appeal decision in Deters v Prince Albert Fraser House Inc. (1991), 93 Sask. R. 205, held that:

When an employee is left with no choice but to resign or be fired, the resignation is not voluntary and a letter of resignation is tantamount to a dismissal.

On the facts of the case Justice Smith was able to find that notwithstanding the employee’s supposed “resignation letter” the fact was that it was the employer’s decision to end the employment relationship, not the employee’s.  On this point Justice Smith repeated the key questions posed at paragraph 47 of the reasons for decision in Templeton v. RBC Dominion Securities Inc. 2005 NLTD 130, 43 C.C.E.L. (3d) 279:

"Who terminated the employment relationship?" Did the employer end the relationship, or did the employee, freely and voluntarily, choose to terminate his or her employment?  [Emphasis added.]

Clearly, where one is faced with an ultimatum such as that which Mr. Chan received the ability to “freely and voluntarily choose” is removed.  Justice Smith therefore had no problem finding that Mr. Chan had been constructively dismissed and that he was entitled to notice of dismissal.

The case thus serves as a warning to employers, if an employer wishes to terminate the employment of one of its employees it is far wiser to do so properly (i.e. on proper notice) than to litigate the matter afterwards.

If you feel that you have been forced out of your employment in Ontario, or if you are considering terminating the employment of one of your employees in Ontario, I would be happy to speak to you.

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As always, everyone’s situation is different.  The above is not intended to be legal advice for any particular situation and it is always prudent to seek professional legal advice before taking any decisions on one’s own case.

Sean Bawden is an Ottawa, Ontario employment lawyer and wrongful dismissal lawyer. He tweets from @SeanBawden.