Can you say NO when an employee changes their mind on a resignation?

Quick Answer: Yes you can. Longer Answer: Yes you can, but it’s a good idea to look at all the circumstances.

There are some resignations that leaders are sad to receive. Their favourite employee resigning; their much trusted business analyst who is a wizard on excel; the office manager who brings so much joy and fun to the workplace; there are lots of resignations that we wish wouldn’t happen. And then there are the resignations that we are quietly happy to receive. The ones from employees with performance concerns, poor attitudes and those who are quite frankly detracting from the workplace. So, what happens when ‘those’ employees then decide to rescind their resignation. They change their minds. Does the organisation have to go along with this change of heart?

Let’s explore the potential risks to an organisation, and the situations where accepting a resignation retraction may be the best course of action.

Fair Work Australia's Perspective on Resignation Retraction

Under Australian law, specifically in relation to the Fair Work Act 2009, resignation is considered a voluntary termination of employment. When an employee resigns, they are generally indicating their intent to end their employment with the organisation. However, unlike dismissal or redundancy, which are governed by specific legal frameworks, resignation is a unilateral decision made solely by the employee. As such, Fair Work Australia (FWA) does not directly legislate on resignation retractions, leaving employers with some flexibility in handling these cases; and unfortunately, also some ambiguity on the outcomes of this.

There is no formal legal requirement to accept a retraction, however, Fair Work Australia does suggest that organisations should consider both fairness and the circumstances in which the resignation retraction is requested. Organisations should consider whether the resignation was given under duress or influenced by unreasonable pressure; in such circumstances, the employer might have a legal obligation to discuss the potential retraction.

Risks around resignation retractions

While it may seem like a goodwill gesture to allow an employee to retract their resignation, organisations must carefully weigh the risks involved in this decision. Below are some of the key risks:

1. Operational Disruption: If an organisation accepts a retraction, it could disrupt internal planning and scheduling. For instance, other employees may have been recruited to fill the role, or restructuring plans may have been made based on the assumption that the employee would be leaving.

2. Employee Morale: If the retraction is granted, it could send the wrong message to other employees. This is particularly relevant for poor performing employees or employees who are considered the ‘bad apple’ in an otherwise healthy fruit bowl. It may create confusion about the stability of job security, especially if the retraction is seen as a 'temporary solution' to an employee's dissatisfaction. It might also lead to other employees questioning whether they could walk away and return without consequences.

3. Trust and Commitment Issues: When an employee resigns and later retracts their resignation, it can impact the trust and commitment that both the employee and the organisation have in each other. Leaders often conclude that the employee isn’t going to stick around, and this causes distrust within the leader/employee dynamic. There may be lingering doubts about the employee’s loyalty and dedication which also impact the relationship.

4. Legal Risks: While Fair Work Australia doesn't specifically dictate how resignation retractions should be handled, organisations must be cautious about potential discrimination or unfair treatment claims. If an employee retracts their resignation and the organisation refuses to accept it without a valid reason, the employee may claim that the refusal was unjust or discriminatory.

5. Exhausted Resources: The time and resources invested in the recruitment process for a replacement, as well as training or preparing for the employee’s departure, could be wasted. If an employee returns after retracting their resignation, these costs are essentially incurred twice.

   
   
   
   

When Should an Organisation Accept a Resignation Retraction?

While there are clear risks, there are certain occasions where accepting a resignation retraction may benefit both the employee and the organisation. These situations may include:

1. Genuine Change of Heart: If the employee expresses a genuine desire to remain in their role after resigning, and their decision was made hastily due to personal pressures (e.g., health issues or family problems), accepting the retraction may be reasonable. However, this should be done only after assessing whether the employee is truly committed to staying.

2. Employee Retention: If the employee is a key player within the organisation and is highly skilled or difficult to replace, it may be in the organisation’s best interests to try to retain them. This could be especially true for employees in senior or highly specialised positions where a replacement would take significant time and resources to find and train.

3. Mutual Understanding: If the resignation was submitted in a moment of frustration or emotional distress, and the employee reconsiders once they have had time to reflect, it may be worth allowing them to retract. In these cases, mutual understanding and a frank discussion about expectations going forward will be crucial.

4. No Adverse Impact: If the employee's decision to retract their resignation will not cause operational disruptions, such as if the organisation has not made significant changes to accommodate their departure, accepting the retraction may be simpler. It’s important to ensure that the employee’s return won’t be more disruptive than beneficial.

5. Constructive Conversation: If the employee’s resignation was triggered by a legitimate concern that could be addressed, such as dissatisfaction with working conditions or a specific grievance, the employer could use this opportunity to open a dialogue for improvement. In these cases, retracting the resignation might help retain an employee who could otherwise leave due to unresolved issues.

   
   
   
   

Conclusion

Deciding whether to accept a resignation retraction is a complex issue that requires careful consideration of both the employee’s situation and the organisation's needs. Organisations should consider the opinion of the immediate leader and possibly also factor in how far into the process the retraction came. If an employee has waited until the end of their notice period, the likelihood is that an organisation will be well and truly established in their processes to hire a replacement. Fair Work Australia leaves this decision to the discretion of the employer, while encouraging fairness and taking into account any potential undue pressure on the employee when they made their resignation decision.

If you need any assistance or advice in relation to a termination or resignation, please give ANSON a call and book in a free 30 minute consultation.