When can a “heat of the moment” resignation be withdrawn?

“The general principle and starting premise is that, once given by an employee, a resignation cannot be unilaterally withdrawn. However, a resignation which reflects a “heat of the moment” statement can be regarded as a “special circumstance” such that it may be unreasonable for an employer to assume a resignation and consequently accept it.
This principle was addressed at some length by Gray J in Birrell v Australian National Airlines Commission [1984] FCA 378 (Birrell). His Honour observed:
“The giving of notice of termination of a contract, in accordance with the terms of that contract, is a unilateral right. Its exercise does not depend in any way on the acceptance or rejection of the notice by the other party to the contract. The giving of such a notice operates to determine the contract by effluxion of the period of notice. It is clear that such a notice could be withdrawn by the consent of both parties to the contract; it seems unnecessary to determine whether, in the case of withdrawal of a notice by consent, the existing contract continues or a new contract comes into being. A question does arise, however, whether unilateral withdrawal of a notice is possible.”
His Honour then continued to address a limited range of authorities dealing with this issue. He concluded:
“These authorities all support the view that unilateral withdrawal of a notice of termination of a contract of employment is not possible. In principle, this conclusion must be correct. The purpose of providing in a contract for a period of notice of termination is to enable the party receiving the notice to make other arrangements. An employee given notice by his or her employer has a period of time in which to seek another job; an employer who receives notice has time to arrange for a substitute employee. It would be harsh if arrangements so made during the running of the notice could be disrupted, and parties could be held to their contracts by unilateral withdrawal of the notice at the last minute. Such withdrawal, if possible, could lead to an employee being bound by contracts of employment with two employers, or an employer being bound by contracts of employment with two employees, each being required to give notice to one or the other in order to be extricated from this position, or possibly to suffer the requirement to forfeit or pay wages for a period of time. In my view, I should lean against the adoption of any principle which could lead to such unfortunate consequences, and I should follow the authorities which tend to establish that withdrawal of a notice of termination of a contract of employment can only be effected by consent of both parties. This conclusion is consistent with authority to the effect that unilateral withdrawal by a landlord of notice to quit is not possible: see Tayleur v. Wildin (1868) L.R. 3 Exch. 303.
Dr. Jessup relied on Martin v. Yeoman Aggregates Ltd. (1983) I.C.R. 314, a decision of the Employment Appeal Tribunal, as establishing an exception to the general rule as to withdrawal of notice of termination, where the notice was given by a person in a highly emotional state, and retracted upon recovery from that state. In that case, a director of an employer company had engaged in an argument with an employee, which resulted in the director telling the employee he was dismissed. Within five minutes, the director cooled down and retracted the dismissal. The employee insisted that he was dismissed, and sought to pursue his statutory remedies for unfair dismissal. The Employment Appeal Tribunal held that it was possible to have second thoughts, and that words of dismissal spoken in the heat of the moment were ineffective if withdrawn immediately the heat died down. In the present case, I have no hesitation in accepting that the Applicant was in a state of emotional turmoil; over the weekend of 7th and 8th May 1983, he was involved in making a choice between accepting termination or resigning, a choice which might have profound effects on his livelihood, his family and his future standing as a pilot. All this having been said, I regard the decision in Martin v. Yeoman Aggregates Ltd. as confined to its facts, and therefore as not extending beyond permitting the withdrawal of words uttered in the heat of the moment, when those words are retracted swiftly.”
To the extent that there is any question about the relevance of the approach in Mohazab v Dick Smith Electronics Pty Ltd (No 2) (1995) 62 IR 200, the recent Full Court of the Federal Court decision in Mahoney v White [2016] FCAFC 160 [19]-[23] clearly confirms that position.
The approach in Birrell is consistent with that adopted by the Industrial Relations Court of Australia in Gunnedah Shire Council v Grout (1995) 134 ALR 156 where the Full Court considered the status of a resignation in a circumstance where the employee was receiving psychiatric care. The Court addressed this issue in the following terms:
“The qualification relates to Mr Grout’s mental state at the time he submitted his letter of resignation. It seems to us that, if the council knew, or should have known, that Mr Grout was then suffering such a degree of confusion or pressure that his act of resignation was not a considered and voluntary act, it was not open to it to resolve to accept the resignation. Although the factual situation is very different, the position is similar in principle to that discussed recently in Mohazab v Dick Smith Electronics Pty Ltd (IRC of A, 28 November 1995, Lee, Moore and Marshall JJ, unreported) where an employee resigned while being questioned about suspected dishonesty. The court held that, notwithstanding the resignation, the termination was a termination at the initiative of the employer, so as to fall within Div 3 of Pt VIa of the Industrial Relations Act. The court said that “an important feature’’ of termination at the initiative of the employer “is that the act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee’’. Because voluntariness is critical, it is important to consider carefully the evidence concerning Mr Grout’s mental condition at the time he submitted his resignation letter.”
The Court concluded that the employee made a considered decision to leave his employment despite being given the opportunity to reconsider his position.
The approach in Birrell is also consistent with that adopted by Murphy JR in Minato v Palmer Corporation Ltd (1995) 63 IR 357, where the words used by the employee in that matter appear to bear some similarity to Ms Carter’s circumstances. In that matter, Murphy JR noted that the employee, engaged in a retail store was under significant personal pressure which she discussed with her manager. In the course of an argument over rostering arrangements, the employee said she was going to resign and then proceeded to advise her manager to “shove the …. job up her a…” before leaving the store. In discussions with senior management immediately after this event the applicant maintained that she was still employed. The senior manager advised that she would sort out the matter and advised the applicant accordingly.
Murphy JR noted some additional authorities on this issue in the following terms:
“The legal position is set out in the case of Sovereign House Security Services Ltd v Savage [1989] IRLR 115 where at 116 May LJ said:
“In my opinion, generally speaking, where unambiguous words of resignation are used by an employee to the employer direct or by an intermediary, and are so understood by the employer, the proper conclusion of fact is that the employee has in truth resigned. In my view tribunals should not be astute to find otherwise …
However, in some cases there may be something in the context of the exchange between the employer and the employee or, in the circumstances of the employee him or herself, to entitle the tribunal of fact to conclude that notwithstanding the appearances there was no real resignation despite what it might appear to be at first sight.”
Those comments were considered in another case: Kwik-Fit (GB) Ltd v Lineham [1992] ICR 183 where at 188 Wood J said that he saw no difference in principle between words or actions of resignation. At 191 he set out the position as follows:
“If words of resignation are unambiguous then prima facie an employer is entitled to treat them as such, but in the field of employment personalities constitute an important consideration. Words may be spoken or actions expressed in temper or in the heat of the moment or under extreme pressure (‘being jostled into a decision’) and indeed the intellectual make-up of an employee may be relevant: see Barclay v City of Glasgow District Council [1983] IRLR 313. These we refer to as ‘special circumstances’. Where ‘special circumstances’ arise it may be unreasonable for an employer to assume a resignation and to accept it forthwith. A reasonable period of time should be allowed to lapse and if circumstances arise during that period which put the employer on notice that further inquiry is desirable to see whether the resignation was really intended and can properly be assumed, then such inquiry is ignored at the employer’s risk. He runs the risk that ultimately 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.”
United Kingdom authorities to similar effect were followed in a recent decision in Queensland: Achal v Electrolux Pty Ltd (1993) 50 IR 236. (Cf Connally v Malifind Pty Ltd (unreported, Industrial Relations Court of Australia, Murphy JR, 1 March 1995) for a discussion of the position in relation to an “ambiguous” resignation.) Applying the above cases the issue is whether the circumstances of the applicant are such as to come within the term “special circumstances” such as to require clarification of her intention to resign, or of her actions at the store on 23 December.”
In concluding that these circumstances should be described as “special circumstances” so that the circumstances of the matter were fully considered before the purported resignation was accepted, Murphy JR concluded that the employer “accepted” the resignation at a time when it was clearly apparent that the employee had not intended to terminate her employment.
Before leaving the relevant authorities, it is appropriate to comment on the issue of repudiation. The distinction between termination of employment and a contract of employment which continues until it is repudiated is succinctly summarised in Searle v Moly Mines Ltd [2008]AIRCFB 1088 [22], [23].
In Gunnedah Shire Council v Grout (1995) 134 ALR 156 the Court considered the extent to which a notice of resignation was ineffective because it provided inadequate notice. The Court addressed this in the following terms:
“The starting point of Moore J’s reasoning in relation to termination of the employment was that Mr Grout’s letter of 18 May was ineffective to terminate his employment because he gave an inadequate period of notice. We accept that three days’ notice of termination of the employment of an abattoir manager would generally be inadequate. The more contentious aspect of his Honour’s decision is its second limb: that an inadequate notice is ineffective even if that notice is accepted by the recipient. In relation to that matter, his Honour quoted some observations of Denning LJ in Hill v CA Parsons & Co Ltd [1972] Ch 305 at 313:
“Then comes the important question: what is the effect of an invalid notice to terminate? Suppose the master gives the servant only one month’s notice when he is entitled to six? What is the consequence in law? It seems to me that if a master serves on his servant a notice to terminate his service, and that notice is too short because it is not in accordance with the contract, then it is not in law effective to terminate the contract — unless, of course, the servant accepts it. It is no more effective than an invalid notice to quit. Just as a notice to quit which is too short does not terminate a tenancy, so a notice which is too short does not terminate a contract of employment.”
Moore J did not accept the qualification imposed by the words “unless, of course, the servant accepts it’’. He gave two reasons. First, he said that, in Hill, the (United Kingdom) “Court of Appeal was considering the effect of notice given by an employer which was not reasonable and had not been accepted by the employee’’; so:
“Denning LJ’s observations about the effect of acceptance by the employee of notice which is too short were not essential to the determination of the appeal and, in any event, it may have been a reference not to the legal effect of the notice simpliciter but rather termination of the contract of employment by agreement.”
Secondly, he thought that what Denning LJ said was opposed to two Australian decisions: Birrell v Australian National Airlines Commission (1984) 5 FCR 447 and Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435.

As to the first reason, it is true that, in Hill, the servant did not accept the notice. So the qualification about acceptance was not germane to the facts of the case. But it was included because Denning LJ obviously thought an unqualified statement would be inaccurate. In other words, although a too-short notice is ordinarily ineffective to terminate a contract of employment, it may be made effective by the recipient’s acceptance. It is inappropriate to disregard one element in a comprehensive statement of principle simply because that element did not apply to the case in which the statement was made.”
Carter v The Trustee for the CFC Employment Trust trading as CFC Employment Trust T/A Centurion Transport (2016) FWC 9176 delivered 22 December 2016 per O’Callaghan SDP