64-year-old Employee Entitled to Unilaterally Rescind Retirement Notice Weeks Later: Ontario Court of Appeal

The Ontario Court of Appeal recently held that an employee had the right to unilaterally revoke her notice of resignation due to changing circumstances, and was wrongfully dismissed when her employer would not permit her to do so. 

The plaintiff in English v. Manulife Financial Corporation[1] was in her early 60s in September 2016, when Manulife announced that it would be implementing a new computer system. The plaintiff had originally planned to retire at the end of 2017. However, she was concerned about her ability to learn a new system and decided she would retire early to save herself and the company the time and effort that training on the new system would entail at the end of her career.

The plaintiff accordingly met with her supervisor to give formal notice that she would be retiring as a result of the new computer system. She handed him a retirement letter she had typed herself, stating the following:

Dear Clive,

This will serve formal notice that I will be retiring effective December 31, 2016.

I have enjoyed working at Standard Life/Manulife for the past 10 years very much, and want to thank you very much for all your support during my tenure.

I especially want to express my gratitude for all your support and understanding during my very difficult times in 2012 and again in 2015.

I will entertain a part-time position, two or three days per week, should be possible (sic), but I understand if it is not.

Again thank you so much for everything.

Sincerely,

Elisabeth English

Her supervisor asked if she was sure she wanted to resign, and she said “not totally.” He then offered the plaintiff an opportunity to reconsider and told her that she could rescind the notice of retirement if she changed her mind. Shortly thereafter, the plaintiff’s imminent retirement was announced at a staff meeting with her consent.

Less than three weeks later, on October 11, 2016, Manulife announced that it would not be proceeding with the computer conversion. The next day, the plaintiff advised her supervisor that because the company was not changing systems, she was withdrawing her retirement notice. Her supervisor informed the company’s human resources department and asked for instructions. On November 25, 2016, he notified the plaintiff that the company would not recognize a rescission of her retirement notice. The company had planned to transfer the plaintiff’s responsibilities to other regions and managers and to eliminate her position following her retirement.

The plaintiff subsequently sued for wrongful dismissal, arguing that she was entitled to rescind her notice of resignation essentially at any time up until the end of December 2016, her effective date of retirement. On a motion for summary judgment, Justice Edwards of the Superior Court of Justice ruled against the plaintiff, finding that her resignation was clear and unequivocal, and that she could not resile from it unilaterally.[2] The motion judge noted that the plaintiff typed her retirement letter herself and submitted it to her supervisor willingly and freely, with the full intention of resigning effective December 31, 2016. Further, in the motion judge’s analysis, after Manulife accepted the notice, a “binding contract” was formed, regardless of whether the company placed detrimental reliance on it.

The Court of Appeal ultimately overturned the motion judge’s decision and found in favour of the plaintiff. Justice Benotto, writing for the Court, held that the motion judge had erred in concluding that the plaintiff’s retirement notice was “clear and unequivocal.” To the contrary, “[h]er resignation notice was equivocal given the circumstances in which she presented it to Manulife…and her equivocation was condoned by Manulife through the actions of [her supervisor].” The Court of Appeal reasoned that the computer conversion was the impetus for the plaintiff’s early retirement, and once that conversion was cancelled, “the basis for [her] resignation disappeared.” The plaintiff was therefore entitled to reconsider her decision, as her supervisor had told her she could. Manulife was bound by the supervisor’s promise to the plaintiff that she could change her mind.

In light of its conclusion that the plaintiff’s resignation was equivocal in the circumstances, the Court of Appeal found it unnecessary to address “the issue of whether and in what circumstances an unequivocal notice of resignation may be rescinded by an employee.”

Takeaway for Employers

It is well-established in law that a valid resignation must be clear and unequivocal. However, the application of these principles in any given case remains highly fact- and context-dependent, as English v. Manulife Financial Corporation demonstrates. This can put employers in a precarious position, as the front-line arbiters of employee resignations in borderline cases.

Employers should be vigilant that circumstances beyond their knowledge and control may undermine the efficacy of an employee’s resignation. This has always been true of heat-of-the-moment resignations, where duress, provocation, distress, and emotion can confound what might otherwise appear to be an employee’s unequivocal intent to resign.

English cautions that a broader inquiry into the surrounding circumstances should be undertaken before acting decisively on the basis of an employee’s notice of resignation in contentious cases.

If you have any questions or require advice about a resignation, do not hesitate to contact one of the members of our Labour & Employment Group.

[1]English v. Manulife Financial Corporation, 2019 ONCA 612.

[2] 2018 ONSC 5135 (CanLII).

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