When is a resignation actually an effective resignation?
In the recent case of East Kent Hospitals University NHS Foundation Trust v Levy, an employer was found to have unfairly dismissed an employee for refusing to allow an employee to retract an ambiguous resignation letter.
For an employer or employee to lawfully terminate a contract of employment, notice is usually required. To be effective, the notice must be clear and unambiguous and must specify the date of termination or at least contain facts from which the end date can be worked out – otherwise the notice is not valid and will not end the employment relationship. It is only when a notice is valid that it cannot be retracted without the agreement of the other party.
Mrs Levy was employed by East Kent Hospitals (the Hospital) in the Records Department but because she was having difficulties in that department, she applied for a position in the Radiology Department. Her application was successful, subject to pre-appointment checks. After an argument with a member of staff in the Records department she wrote a letter to her manager which said, “Please accept one month’s notice from the above date”. The manager responded the same day accepting Mrs Levy’s “notice of resignation” and referred to her last working day within the Records Department.
The manager did not complete a staff termination form, did not mention Mrs Levy leaving her employment or to any other usual issues you would normally deal with on termination, such as accrued holiday. Mrs Levy’s offer of employment to Radiology was subsequently withdrawn and she then tried to retract her “notice”. However, the Hospital refused to agree and confirmed her employment would end at the end of her notice period.
Mrs Levy subsequently brought a claim of unfair dismissal against the Hospital, claiming she had been directly dismissed by the Hospital. The Hospital defended the claim and stated that she had resigned.
The Employment Tribunal found in Mrs Levy’s favour and held that although her letter was ambiguous about whether she was giving notice to leave the department or her employment generally, the Hospital had in fact understood she was only giving notice of leaving the department based on a reasonable construction of the manager’s letter. Accordingly, the Tribunal held that it was the Hospital who ended Mrs Levy’s employment because it would not let her return to her job in the Records Department.
The Hospital appealed against the finding of unfair dismissal.
The Employment Appeal Tribunal (EAT) dismissed the appeal. The Judge agreed that Mrs Levy’s notice was ambiguous. Given this, the Judge said the Tribunal had applied the correct test which was to ask what a reasonable recipient would have understood by the notice in light of the particular circumstances known to the recipient when the notice was received. These included the fact that the Hospital knew Mrs Levy was intending to transfer to an internal position still in the Hospital’s employment. The EAT held that the Tribunal had not made a mistake in its approach or in its conclusion that Mrs Levy’s employment had been terminated by dismissal and not resignation.
Points to note
The Hospital should have considered at the time whether the resignation was valid or not, rather than assuming – as appears to have happened – that because Mrs Levy asked to retract her notice, they were under no obligation to agree to this. By refusing to allow Mrs Levy to retract her “notice of resignation” and telling her that her employment would end when her notice expired, the Hospital effectively ended her employment.
Action to take
1. If you receive a letter of resignation that is unclear or does not specify an end date, check with the employee what they mean first before accepting it.
2. A resignation given “in the heat of the moment” does not necessarily amount to a genuine resignation. It is good practice to give the employee the opportunity to clarify their intentions once they have cooled down.
3. It can be tempting to react quickly when an opportunity appears to present itself to say goodbye to a difficult employee, but as this case demonstrates – this can be a risky and costly move! If in doubt, seek legal advice.
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