An employee who retracted her resignation two days after submitting it has had her unfair dismissal claim rejected. Here’s what HR needs to know.

The Industrial Relations Commission of New South Wales (IRC) decided that an administrative support officer was not allowed to withdraw her resignation after the fact, as the common law position that allows for resignations to be withdrawn in exceptional circumstances did not apply in this case.

The employee reported working in a “hostile” and “debilitating” work environment as part of her reason to resign. Two days later, she tried to rescind her resignation, stating that she had “not [been] thinking rationally due to stress”, however the employer did not accept this.

Following this, the employee began unfair dismissal proceedings, which were rejected. Now, her appeal has also been quashed by the IRC.

According to Susan Sadler CPHR, CEO of HR consultancy Red Wagon Workplace Solutions, the results of this case are noteworthy insofar as they are straightforward and expected.

“This case reinforces the point of common law that there is no automatic right to be able to rescind a formal resignation, unless there were exceptional circumstances,” she says.

Later, we’ll look at the rare cases when an employee might be allowed to rescind their resignation and return to the workplace, but first let’s delve into the case itself.

Hostile environment triggered resignation

In her resignation letter, which was emailed to an HR duty officer on 10 June 2020, the employee pointed to several key factors contributing to her decision to resign, namely toxic personal relationships and workplace culture.

She claims to have experienced consistent harassment from her manager about her absenteeism, which she says was “due to illness and prolonged recovery from pneumonia and iron deficiency”.

The employee argued that being placed on a performance improvement plan was unreasonable given her chronic fatigue and respiratory infections, and that she had produced medical certificates to explain her absence.

“Generally speaking, you probably wouldn’t allow them to come back unless there was a positive relationship in place anyway, which would suggest that reintegration wouldn’t be particularly challenging.” – Susan Sadler CPHR, Red Wagon Workplace Solutions

In the letter, she stated that “not only [was] it unconscionable for [her] to work in such a hostile environment, it [was] also physically and mentally debilitating to work under such stressful circumstances.”

She concluded: “I leave my role today with no savings or assets and no way to support myself financially. I have no entitlements by way of leave that will be paid to me. The work environment is so hostile that I am forced to face severe financial distress and certain long-term unemployment rather than return to the workplace.”

When judging the employee’s unfair dismissal claim in January 2021, Commissioner John Murphy stressed the common law position that “notice of resignation, once given, cannot be unilaterally withdrawn, except where the notice is given in the ‘heat of the moment’, and the withdrawal occurs immediately after the ‘heat dies down.’”

Commissioner Murphy concluded that there was “no suggestion” that the ‘heat of the moment’ exception was applicable to this particular matter.

The employee then appealed the decision on three grounds, that:

• Commissioner Murphy erred in finding that the common law principle did not apply in this case.
• The employer should not have accepted her resignation due to it being submitted with less than four weeks’ notice.
• She moved to withdraw her resignation prior to it being accepted.

In her reading of the case, Sadler is keen to stress the unsurprising nature of the result.

“It was clear from what the employee wrote in her resignation letter that she didn’t make the decision to resign lightly. The employee had clearly thought through the process and the financial consequences.

“It would be very difficult, on the basis of her resignation letter, for her to soundly argue that it was a heat-of-the-moment decision.”

A ‘heat-of-the-moment decision’ would typically be characterised by a verbal resignation as the result of an argument, for example, or perhaps notice of resignation sent via text message, according to Sadler.

Otherwise, an employee’s chances of walking back on a conscientious and predetermined decision to quit are slim.

Back into the fold

But what happens when an employee does return to the workplace after tendering their resignation?

Sadler says such a scenario is rare, and the circumstances would be noticeably different to the setup of this case.

“An example would be when the employee resigned because they had plans to move interstate due to their partner’s work, for instance. Let’s say those plans didn’t come to fruition and they asked to rescind their resignation. If they were a good employee, why wouldn’t you agree to keep them on?”

Sadler doesn’t think that welcoming such an employee back to the workplace would prove too difficult.

“Generally speaking, you probably wouldn’t allow them to come back unless there was a positive relationship in place, which would suggest that reintegration wouldn’t be particularly challenging,” she says.

“From a practical perspective, however, if you’d already processed their termination and paid out their leave, that’s difficult to reverse. What you could do is issue them a new employment contract, meaning that their employment would start anew rather than continue from where it left off.”

Sadler has the following recommendations if HR is reintegrating an employee into the organisation:

• Respect their confidentiality. “If their resignation has been rescinded, that might be due to something sensitive. They might not want to have that conversation broadcast publicly.”
• Communicate with the employee about performance expectations. “If you’re prepared to allow someone to return to the workplace after they’ve resigned, be clear about performance and behavioural expectations.”
• Clarify the terms of resignation from the outset. “Ensure termination and resignation clauses are clearly articulated in the contract of employment, and that policies are not incorporated into the contract.”

In any case, employers aren’t likely to find themselves in a similar situation to the employer in this case.

“When I reflect on my 20 years of experience in HR, there are only a handful of times when we’ve agreed to rescind a resignation,” says Sadler. “You have to consider each request on its own merits.”

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