Voluntary resignations – do I take it or not?
Recently we have seen a surge in organizations presenting the option of voluntarily resignations, compared to outright terminations, especially in the tech, finance, and telecommunications industries.
What does this mean?
In these types of situations, the employer will offer some type of incentive, usually an amount of money that represents separation pay. You probably heard it before: "if you resign, we will give you x weeks/months of pay."
But let us review employment law 101 quickly: Absent cause, the employer must provide notice, or pay in lieu of notice, when terminating an employee. For more information on an employee's entitlement to notice, read our blog here.
On the other hand, if the employee resigns or retires, the employer is not obligated or required to provide any compensation. Note, the employer cannot ever force a resignation. Therefore, in a situation where the employer wants to encourage the employee to resign, the idea of a "voluntary resignation" package emerges. This is essentially where the parties meet in between.
Before accepting a voluntary resignation though, as an employee, you should know what you may be forfeiting when you opt for this. It is important to remember that once you sign a separation package with a Release, it may be very difficult to turn things back.
Therefore, it will be worth it to consider the following:
First and foremost, what does the offer contain? Is it just the Employment Standards Act minimums? Or is the offer closer to your entitlement at common law? Is the offer similar or better to what you may get if terminated? To determine this, you may wish to consult with an employment lawyer to get a more accurate range of what your termination entitlements may be.
Second, consider your personal employment history. Do you have a potential human rights claim? Constructive dismissal? If so, signing the Release will likely prohibit you from being able to bring such claims later on.
Third, do you intend to apply for Employment Insurance (EI)? Employees who voluntarily resign generally are not entitled to EI. Thus, depending on how your exit is characterized, the code used on your Record of Employment (ROE), and the separation payments being provided, your eligibility to claim EI could be impacted.
Ultimately, you should never feel forced to resign. Simply rejecting the voluntary resignation offer is not grounds for just cause dismissal or reprisal. Should you experience this, we strongly encourage you to speak with an employment lawyer.
Takeaway:
With the increase of these often-enticing offers, we recommend speaking with an employment lawyer before accepting (and signing the Release) to ensure that the offer does not fall too far below your legal entitlements and that you understand the consequences of accepting. We are here to help.
