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February 26, 2020

Company founder ‘unfairly dismissed’ after saying “I won’t be back”

Judge rules that fellow directors were hell-bent on ensuring the founder of the business would not be allowed to return to the company.

Robert Rae, founder and Managing Director of Wellhead Electrical Supplies has won an unfair dismissal claim at the employment tribunal after the tribunal panel deemed that he was unfairly dismissed after stating during a heated meeting that, “I won’t be back” as that didn’t constitute a “real resignation despite how it appeared”.

Mr. Rae had founded the business in 1990 and worked there as Managing Director until his ‘resignation’ in March 2019.

The employment tribunal heard that in the months prior to Mr. Rae’s ‘resignation’ there had been some dispute between the directors about whether or not to provide the employees with a pay rise. Mr. Rae wanted to offer the pay rise however the other directors were reluctant to do so.

In March 2019 during a board meeting, Mr. Rae believed that a pay rise was agreed with his fellow directors and that two additional employees (one of them was Mr. Rae’s son and the other was a member of the sales team) would be provided with an additional rise to their salary, over and above the increase to the other employees.

Mr. Rae then told the two employees (his son and sales team member) about the increase however the additional money was not reflected in their payslips, which Mr. Rae said made him feel “embarrassed” and “devastated”.

Mr. Rae then went to see Charles Ogg, the companies Finance Director to challenge him about the two payslips. Mr. Rae is said to have shouted “I told you what was going to happen…I won’t be back”.

Mr. Ogg also claimed that Mr. Rae said “I resign”, which Mr. Rae denied. However, Mr. Rae did admit to saying to another company director “I believe I’ve just resigned”.

An emergency board meeting was called a few hours after Mr. Ray had walked out of the office and it was agreed by all board members to accept Mr. Rae’s resignation with immediate effect.

Mr. Rae then called two of his fellow directors to explain that he was not resigning and that he had been under a lot of pressure and stress, however, he was unable to speak to them so he left a message. Mr. Rae also saw his doctor who signed him off work until the 5th of April, although he did not return.

Mr. Rae did not receive a reply to his message, however, he did receive a letter the same day stating that the board had accepted Mr. Rae’s ‘unequivocal’ resignation.

Mr. Rae replied to dispute the resignation however he was then sent a second letter explaining that he was no longer a director of the company and he was not to communicate with any employees or interfere with the business moving forward. He also was sent his P45.

The employment tribunal judge accepted that Mr. Rae’s action on the day he stormed out of the business, amounted to an “unambiguous resignation” but also detailed how the company should have given more time and thought to the situation before unanimously removing him from the business.

Although it was accepted that Mr. Rae had previously made threats of resignation, the employment tribunal noted that the apparent resignation was clearly in anger and did not constitute a planned course of action, as it would have been normal practice for someone in a senior position to have to provide their resignation in writing. This is what happened when a former director resigned in 2011 and was given a ‘cooling-off period’.

The tribunal said that the directors were 100% focused on ensuring Mr. Rae did not return to the business in any circumstances, meaning Mr. Rae’s claim for unfair dismissal was upheld.

Caroline Wood, Director at HR Heroes, stated that a company has to be very careful about accepting resignations given ‘in the heat of the moment’ and if in fact, this does happen, the best course of action is to allow the employee some time to calm down, and then meet with them to discuss further if they still do want to resign.

If you don’t, then you can clearly see the consequences of accepting a resignation given during a fractious situation or conflict, without giving the employee concerned the opportunity of a cooling-off period and to retract their resignation.

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