Managing director unfairly dismissed after resigning in anger

The Employment Tribunal has ruled that a managing director was unfairly dismissed after his colleagues accepted a resignation letter he wrote ‘in the heat of the moment’.

The case involved Robert Rae, who was managing director of Wellhead Electrical Supplies.

Rae and other directors of the company had spent months discussing salary increases for their employees – with Rae more in favour of the idea than his colleagues.

During one board meeting a pay rise was agreed. After the meeting, Rae was under the impression that his son and another employee would be given a larger pay rise. During informal conversations, he had previously said that he would resign if this didn’t happen.

He told the two employees about the pay rise, but when their next pay cheques arrived, the rise had not been added.

Rae confronted company finance director Charles Ogg and threw his keys at his desk, shouting: “I won’t be back.”

He later told company director, Greg Rastall: “I believe I’ve just resigned.”

Two hours after Rae left Ogg’s office, the directors called an emergency board meeting and unanimously decided to accept the resignation.

The following day, Rae told his colleagues he was not resigning. He then went to see a doctor and was signed off work with stress.

Rastall sent Rae a letter saying his resignation had been accepted and that the company was moving forward on that basis.

Rae disputed this but was told he was no longer a director and that he must not contact employees or interfere with company business.

He took legal action against Wellhead and the tribunal ruled in his favour.

The judge said that his actions may have appeared to be an unambiguous resignation, but under the circumstances, the company should have given more consideration before terminating his employment.

The resignation was given in anger and taken back the following day. There had also been no written resignation, which would have been normal practice.

The judge said: “There was no obvious reason why it was necessary to convene such a meeting so quickly.

“The fact that they did, reinforced my view that the directors were blinkered by an overwhelming desire to ensure that the claimant would not be allowed to return to work, in any circumstances.”

The tribunal ruled that Rae had been unfairly dismissed and called for the parties to agree an appropriate remedy between themselves. If they fail to do so, a remedy hearing will be arranged.

For more information about the issues raised in this article or any aspect of employment law please call Joanne on 01228 516666.

By Joanne Stronach Head of Employment & HR