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When you are ready to retire, make sure you are really ready.

There is rarely any upside to an employee to give an employer more than a few weeks notice of their retirement or resignation Things change and you could change your mind when it is too late.

Margaret worked for an insurance company for 9 years when it was announced that the entire computer system was going to be transitioned to a new system.  Retraining was involved and Margaret wasn’t interested in going through the hassle.  She was in her sixties when the announcement was made and typed a polite letter giving the employer 3 months’ notice of her resignation. There was nothing equivocal about it. It did not say that the retirement was dependent on the conversion going ahead and in fact did not even mention that issue.

The boss liked Margaret and told her that she could rescind or reconsider her resignation. He did not put a timeline on it.  At some point in the next few weeks he told human resources about the retirement and management started making plans as to what they would do with Margaret’s caseload when she left.  A couple of weeks later it was announced that the computer conversion was on hold indefinitely.  Margaret met with the boss and told him she was rescinding her retirement. He acknowledged her communication but made no comment. Eventually the employer told her they were not allowing her to withdraw her retirement. On the day that she had chosen her employment ended and she sued for wrongful dismissal.

She was claiming that by not allowing her to rescind her retirement notice as promised the employer had effectively terminated her and owed her pay in lieu of notice. Margaret was not successful.

The judge decided that Margaret’s retirement letter was clear and unequivocal and freely given. Nobody talked her into it or pressured her to leave. When she submitted it, she had no idea that her boss would say she could rescind it for over a month. Although her boss did not put a time limit on his offer to allow her to reverse course, it would appear that the judge thought a month was too long.

Margaret’s journey does not change longstanding case law which says that a resignation coerced by the employer or provoked by maltreatment in the workplace can be considered a termination. Even when the employer is not at fault, a resignation uttered in the heat of the moment and rescinded quickly thereafter will usually not be binding on the employee.

But there is still an important lesson in Margaret’s case. Over the last 26 years of practicing law I have been contacted on several occasions by employees of both our local large steel manufacturers with the same scenario.  After 30 years or more service they retired and within a month or 2 voluntary severance packages were offered to people in their age group with their seniority and they missed out.  They are sure that the HR person or manager they dealt with was aware these voluntary severance packages were on their way but told them nothing. It must certainly feel unfair and callous.  It is not, however, illegal. They were out of luck.

My father only left Bell Canada after 37 years of service as a linesman when the third voluntary severance package for older workers in 3 years came out and it was finally rich enough to convince him to call it a day. 
Of course many employees cannot possibly guess that a voluntary severance arrangement  is on it's way or that another one is coming. It is always a risk one takes when one submits that letter. But putting off your retirement hoping somebody will fire you or offer you some sort of a package can be a fool’s game.

My father-in-law started at E.D. Smith when he was 20 and retired at the age of 62 when he wanted to. Tragically he got all of 10 months of retirement before he passed. Finally, I am not trying to discourage people who have had a long and rewarding career and want to give their valued employer lots of notice of their retirement. They want to go out with the grace and professionalism that they feel they have been treated with by their employer. Just be aware that if things change, you can’t go back.
Ed Canning
Ed Canning
P: 905.572.5809