Company director not allowed to retract his ‘heat of the moment’ resignation was unfairly dismissed, tribunal finds

7 Feb 2020 By Siobhan Palmer

Judge rules fellow bosses were ‘blinkered’ by a desire to ensure the director would not be able to return to work

A managing director has won a claim of unfair dismissal against a company he founded after his fellow bosses accepted a resignation made in anger and terminated his employment hours after he stormed out of a meeting. 

An employment tribunal (ET) heard Robert Rae, former managing director of Wellhead Electrical Supplies, told his fellow directors “I won’t be back” as he left a meeting about employees’ pay.

Despite contacting the directors the day after the disagreement to clarify he was not resigning, he was told his resignation had already been accepted, and he was not to interfere with the business of the company any more, or speak to staff.

The ET ruled this was an unfair dismissal, as Rae offered “no real resignation despite what might have appeared at first sight”.

Rae founded Wellhead Electrical Supplies in 1990, and worked there until his apparent resignation on 21 March 2019. 

The ET heard that in the month leading up to the end of Rae’s employment, he had been discussing the issue of employee salary increases with his fellow directors. It became an issue of contention, as Rae wanted to offer a pay rise while the other directors were more resistant to the proposal.

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In a board meeting on 7 March 2019, a pay rise was agreed and Rae was under the impression that in addition to a general pay increase, two employees – Rae’s son and a member of his sales team – would be given a larger pay rise. In previous informal discussions Rae had threatened to resign if the proposed pay increases did not go through, the tribunal heard.

Rae told the two employees about the increase, but this was not reflected in their next pay cheques. The ET heard Rae was “devastated” and “embarrassed” by this. 

Rae pursued the issue with the company finance director Charles Ogg, and confronted him on 21 March. The tribunal heard that Rae threw his keys on Ogg’s desk and shouted: “I told you what was going to happen”. He then left, and said to Ogg “I won’t be back”.

Ogg also claimed Rae said “I resign”, but Rae disputed this. Rae did concede saying to the other company director, Greg Rastall, in a loud voice: “I believe I’ve just resigned,” or words to that effect.

Two hours after Rae walked out of the office, an emergency board meeting was called, where it was unanimously agreed Rae’s resignation should be accepted.

The following day, Rae contacted Ogg and Rastall to explain he would not be resigning and that he was suffering from stress. He then went to see a doctor and was signed off work until 5 April. He did not, however, return to work.

Rastall did not reply to Rae’s message, but sent him a letter the same day saying Rae had resigned in unequivocal terms, and that the company had accepted this and would be moving forward with the resignation.

When Rae replied disputing this, he was sent another letter telling him he was no longer a director at Wellhead. It warned him not to interfere with any future company business or communicate with any staff members. Rae was then sent a P45 at the end of March. 

The judge accepted that Rae’s actions on the day he walked out “amounted to an apparently unambiguous resignation”. But he also noted the circumstances in which it had happened meant the company should have given more thought before ending his employment.

Although he had previously threatened to resign, the tribunal noted Rae’s apparent resignation was tendered in anger, and therefore did not amount to him carrying out a planned course of action. The ET noted “it would be normal practice for someone in a senior position to resign by giving written notice”, and when a former director of Wellhead resigned in 2011, he was allocated a ‘cooling off’ period.

The tribunal said “the directors were blinkered by an overwhelming desire to ensure that the claimant would not be allowed to return to work, in any circumstances, and that no explanation whatsoever from him for his conduct, even though it was unprecedented in some thirty years, would be accepted.” Rae’s claim of unfair dismissal was therefore upheld.

Paul Holcroft, associate director at Croner, said the case represented “a clear example of why employers should always respond carefully to situations where employees resign ‘in the heat of the moment’”.

He said: “Tempers can flare in the workplace, and it is advisable in these circumstances to give the employee time to calm down, contact them later, and get them to confirm in writing that they do wish to resign.”

Thalis Vlachos, employment law partner at Gunnercooke, said when someone a business wants to get rid of apparently resigns, the employer can’t assume this means they’re legally protected in not allowing the employee to go back on the resignation: “The danger point for the employer is that if they then do not allow that person to retract their resignation, then they've followed no procedure. It's then considered a dismissal and they then face an employment tribunal claim, as in this case.”

Wellhead Electrical Supplies declined to comment on the ruling. Rae could not be contacted for comment. A settlement is yet to be agreed.

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