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BC Court Invalidates Resignation of Employee Who Quits under Threat of Termination

Posted On: January, 21 2015

Philip Chan was a general manager for Denny’s restaurants and had been employed with Denny’s for 15 years when he resigned from his job after his supervisor criticized his performance and threatened him with dismissal.

Believing that his termination was imminent, Mr. Chan submitted a resignation letter to his employer, which provided the following explanation for his resignation: “After my vacation ended a week ago, I then realized that my wife needs my attention more than I anticipated as well as looking after my own health…[I was] advised by my family physician to slow down.”

In its decision following the trial of Mr. Chan’s wrongful dismissal suit, the British Columbia Supreme Court found that Mr. Chan’s resignation was no resignation at all. The Court found that Mr. Chan had submitted the letter of resignation in order to “save face,” and because he was under the reasonable belief that he would be terminated imminently if he did not resign.

The BC Court confirmed the principle that when an employee is left with no choice but to resign or be fired, the resignation is not voluntary and a letter of resignation is tantamount to a dismissal.

As Mr. Chan’s resignation was deemed invalid and because his dismissal was without cause, the Court found that Mr. Chan was entitled to reasonable notice of his termination. In light of his age of 63, his 15 years of service, his position and other factors, the Court awarded Mr. Chan 18 months of pay in lieu of notice. -

The Court declined to award damages for bad faith termination as a result of the manner in which Mr. Chan was dismissed. Although the Court was critical of the manner in which Mr. Chan’s supervisor had forced his resignation, the Court found that the employer’s conduct did not reach the level of malicious or outrageous conduct to give rise to an award of punitive damages.

The full text of the decision can be read here: Chan v Dencan Restaurants Inc., 2011 BCSC 1439.

 

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