Dismissing an employee is never easy. But what happens if circumstances change and you want the employee to stay?
Consider this example: a company makes several positions redundant, and the affected employees are notified of their termination.
The company realises one position needs to be maintained and attempts to withdraw the notice of dismissal. The affected employee has already accepted an offer of employment with another company and rejects the employer’s offer.
The company believes the employee has to accept the withdrawal of dismissal. If not, it wants to treat the termination as a resignation by the employee, meaning the employee would forfeit the redundancy pay entitlements.
Can the employer withdraw the dismissal notice and withhold monies due on termination because the position is no longer redundant?
Notice of termination
Industrial courts and tribunals have generally determined that notice, once given by an employer, cannot be withdrawn except with the agreement of the employee.
This is because an employee may have already obtained employment with another employer (as has happened in this instance). If an employer could unilaterally withdraw the notice, the employee could be bound by two concurrent contracts of employment. See Re Birrell v Australian National Airlines Commission [1984] FCA 378.
In the above example, the original notice of dismissal will stand if the employee did not agree to the notice being withdrawn by the employer. This means the termination is ‘at the initiative of the employer’ and is not considered a resignation. The employee would be entitled to the appropriate entitlements in relation to the position becoming redundant.
Employee resignation
The same logic applies to the withdrawal of notice by an employee. The requirement for an employee to give the appropriate period of notice is to allow an employer sufficient time to fill the position.
If an employee could withdraw notice at any time, it could result in the replacement employee being left without a job, having already terminated their employment with a previous employer to accept the vacated position. See Gunnedah Shire Council v Grout [1995] IRCA 694.
An exception to this is where the employee's mental state at the time of the resignation meant the giving of notice was not considered a voluntary act.
The heat of the moment resignation
If words of resignation are unambiguous, an employer is entitled to treat them as such. However, words may be said by the employee “in the heat of the moment”, which industrial tribunals refer to as "special circumstances".
Where special circumstances arise, it may be unreasonable for an employer to assume a resignation and accept it. A reasonable amount of time should be allowed to lapse. If circumstances arise that put the employer on notice that further enquiry is desirable to see whether the resignation was intended and can adequately be assumed, then such enquiry is ignored at the employer’s risk.
An employer runs the risk that evidence may be forthcoming, which indicates that in the "special circumstances", the intention to resign was not the correct interpretation when the facts are judged objectively.
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