Canada: Resignation As A Bargaining Weapon – A Double-Edged Sword

Threatening to resign, when used by an employee to bargain for better working conditions, is a weapon that cuts both ways. A tactic of this sort can easily backfire on the person making the threat, a point that was illustrated in a recent decision of the Quebec Court of Appeal in De Montigny c Valeurs mobilières Desjardins.¹

The facts

This case involved a suit filed by a former president and chief operating officer against his ex-employer for more than $3M, claiming constructive dismissal.

Stating that he was dissatisfied with his total compensation, the plaintiff had tendered a letter of resignation to his employer. Orally, he explained that the resignation was to take effect only if the problems related to his compensation were not resolved and if a strategic plan was not established by a certain date. Initially, the employer refused to accept the plaintiff's resignation and reiterated its confidence in him, and the negotiations continued. A few weeks later, the employer had second thoughts and accepted his resignation following the publication of an internal audit report on the compliance practices of a branch for which the plaintiff was responsible.

In first instance, Justice Paul Mayer concluded that tendering the resignation letter had amounted to a pressure tactic aimed at obtaining a salary increase and that, in such a situation, the employer was not required to give in to an employee's blackmail. Moreover, the resignation had been free and voluntary. In the view of the trial judge, the plaintiff had "taken the calculated risk that he might lose his job if the resignation was accepted and now had to suffer the consequences of his action."²

This reasoning was affirmed by the Court of Appeal, which failed to detect any determinative error in Justice Paul Mayer's findings. On the contrary, it went further, noting that "the appellant knowingly used resignation as a weapon to try to achieve his ends"³ and that "the fact that the weapon backfired on him did not make the act of using it less free and more involuntary."⁴ Based on the foregoing, the highest Quebec court thus went on to dismiss the appeal and reject the appellant's argument that he had been constructively dismissed.

Conclusion

To be sure, this decision makes it clear that an employer will not have to give in to an ultimatum by an employee who brandishes the threat of resignation in an effort to secure certain advantages.

Resignation nevertheless remains an employee's prerogative and must be free and voluntary. Establishing that a resignation was free and voluntary will normally require a court to make a detailed analysis of the circumstances in which it was given. However, the Court of Appeal has now confirmed that threatening to resign cannot be used by an employee as a ploy to get whatever he or she wants and that, at the very least, the employee must be prepared to assume the risks and consequences of resorting to such tactics.

Footnotes

^{1 2013 QCCA 600, Dalphond, Dufresne and Gascon JJA.}

^{2 Para. 49 of the decision. (our translation)}

^{3 Para. 73 of the decision. (our translation)}

^{4 Id. (our translation)}

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