How do I Quit my Job? Understanding Retirement and Resignation.

By Steph Walsh in Employment Law, Wrongful Dismissal on October 16, 2024

Retirement & Resignation: Kieran v. Ingram Micro Teaches us How to do it Right.

The question of when an employee’s words or actions legally amount to a resignation is a complex one that often leads to disputes – but the Court of Appeal has provided guidance which can help and valuable guidance on this issue.

The seminal case of Kieran v. Ingram Micro centred around Andrew Kieran, a high-level executive who had worked with the company for nearly a decade, rising through the ranks to become Senior Vice President of Purchasing, earning over $200,000 per year. In 1996, when Ingram Canada’s president resigned, Kieran and another senior VP, Gordon Schofield, both vied for the top job.

Pending the appointment of a new president, Ingram’s worldwide president, Jeffrey Rodek, put in place a temporary “office of the president” consisting of Kieran, Schofield, and the SVP of Finance to run the Canadian operations jointly. In a private meeting with Rodek, Kieran expressed serious reservations about Schofield’s leadership abilities and told Rodek he “couldn’t work for Gord.”

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Kieran said that if Schofield was chosen as president over him, he would consider it “a slap in the face” and would need to be transferred to another Ingram Micro office internationally.

Rodek cautioned Kieran about making such statements but assured him the company would try to find a suitable position abroad if Schofield got the job. Ingram did not suggest Kieran’s inability to work under Schofield would be cause for dismissal. The two men understood that working closely with the president was an integral part of Kieran’s SVP role.

Matters Escalate

After Kieran had a verbal altercation with another executive, Schofield became the clear frontrunner for president. Kieran reiterated to Rodek that he would require an international transfer if Schofield was promoted and that he would leave Ingram if one could not be arranged. Rodek promised to try to find a position, but in May 1997, Schofield was appointed president without a transfer for Kieran.

Days later, Kieran met with Rodek and Schofield separately, asserting his commitment to stay with Ingram Canada and support Schofield.

However, Ingram then took the position that Kieran had resigned and his continued employment was no longer an option. In June 1997, the company presented Kieran with an offer for a different job with a significant pay cut, which he declined. Ingram then sent Kieran a letter confirming his “resignation.”

Kieran sued Ingram for wrongful dismissal.

Did Kieran Resign?

At trial, Ingram argued Kieran’s statements that he could not work with Schofield amounted to a clear resignation, which the company relied on to its detriment by trying to secure him another position. They claimed Kieran could not later change his mind and withdraw his resignation.

The trial judge sided with Ingram, finding that Kieran’s statements, though contingent on Schofield’s promotion, amounted to an “unequivocal resignation” that took effect once Schofield got the job. The judge also concluded Kieran could not later rescind his resignation because Ingram had acted to its detriment by relying on it.

Overturn

The Court of Appeal overturned this ruling. The appellate court confirmed that a resignation must be “clear and unequivocal” to be legally valid. Whether that high threshold is met must be determined objectively – would a reasonable person, looking at all the surrounding circumstances, understand the employee’s words and actions to demonstrate a clear intention to quit? Resignations cannot be casually implied but must be definite.

Examining the full factual context, the Court of Appeal found Kieran had not unequivocally resigned. His statements about being unable to work with Schofield were accompanied by an expressed desire for an international transfer, which Rodek had assured Kieran the company would try to arrange. Kieran, a valued senior employee, believed such a transfer was possible based on his discussions with Rodek and Ingram’s prior confirmations that foreign positions were available.

Importantly, Rodek and Ingram never warned Kieran that a transfer might not be possible or that his statements could be construed as an immediate resignation regardless of whether a suitable foreign position was secured. Given this context, the Court held Kieran’s words reflected a desire for an alternate position if Schofield became president, not a clear intent to resign in any event. A reasonable person would not understand Kieran to have unambiguously quit.

The Case Takeaway

The Court of Appeal’s decision provides critical reminders for employers and employees. Resignations have serious legal consequences. As the court emphasized, they must be clear and unequivocal to be binding, which is a high threshold. Expressing frustrations, exploring alternate roles, or making contingent statements about leaving are not necessarily resignations, even if the employer interprets them that way.

For employers, the key takeaway is to refrain from prematurely concluding an employee has resigned based on ambiguous statements or requests for different positions, even ones suggesting they might eventually leave. If an employee’s true intentions are unclear, the employer should clarify the situation before unilaterally asserting there has been a resignation. Treating an employee as having resigned when the objective circumstances do not support that conclusion risks substantial liability for wrongful dismissal.

Employees, in turn, must understand that definite statements about quitting may be treated as binding resignations. They should be cautious about making unconditional assertions that they are leaving, even in the heat of the moment or when exploring other options. If they do not truly intend to resign, they should make that clear.

The Kieran case demonstrates the importance of both sides being unambiguous in their words and intentions when it comes to potential resignations. When disputes arise, courts will look at the entire factual context to determine whether a reasonable person would find there has been a clear, unequivocal resignation. Absent such clarity, an employer may face significant damages for wrongful dismissal.

Lalande Takeaway

Here is our takeaway with a thought on both resignation and retirement:

Clear Communication: The courts will require that the employee clearly and explicitly communicate their intention to resign or retire to their employer. A vague or ambiguous statement such as “I might retire soon” or “I’m thinking of retiring” likely wouldn’t meet the threshold of a clear and unequivocal resignation. In our experience, if you are going to resign or retire, put it in writing, date and sign it.

Voluntariness: The decision to resign or retire must be voluntary. If an employer pressures or forces an employee into retirement, the resignation may not be considered clear and unequivocal. In these situations, employees could potentially claim constructive dismissal or argue that their retirement was involuntary.

Employer Interpretation: If an employee communicates their intent to retire, and the employer acts on that communication (e.g., by preparing for the employee’s departure), the courts are more likely to treat that communication as a binding resignation. However, if the communication is unclear or ambiguous, the employer should seek clarification before taking any steps. Courts expect employers to confirm the employee’s retirement intentions to avoid disputes where retraction of resignation was considered due to ambiguity.

Retraction of Retirement: An employee may attempt to retract their resignation or retirement notice before the effective date, especially if the employer has not yet taken definitive action based on that notice. Courts will consider whether the employer has reasonably relied on the employee’s retirement notice in determining whether retraction is possible.

Have you Been Wrongfully Dismissed?

While fact-specific, the Kieran decision provides helpful guidance for navigating this complex area. Employers and employees should both be aware of the high bar for finding a binding resignation and avoid acting rashly. With open communication, many resignation disputes can hopefully be prevented. When litigation arises, a careful examination of the surrounding circumstances, not just the employee’s words in isolation, will be essential in determining the legal outcome.

Navigating a sudden job loss can be stressful and overwhelming, but we’re here to help. Our Hamilton employment lawyers have an excellent track record with wrongful dismissal and termination cases. If you’ve been fired, please don’t hesitate to reach out and schedule a consultation.

Call us today at 905-333-8888. Alternatively, you can send a confidential email through our website to set up a consultation and learn your legal options. Our team is ready to help you understand your rights and the legal pathways available for seeking justice and compensation.

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