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Employment tribunal rules that Director was unfairly dismissed after sudden resignation

An employment tribunal has ruled that the managing director of an electrical supplies firm who resigned during a dispute was unfairly dismissed.

The company accepted Mr Rae’s resignation following a dispute over salary increases. However, the tribunal found that his resignation had been forced by the other directors’ ‘considerable ill-feeling’ towards him.

Mr Rae had proposed a five per cent pay increase for the majority of employees in the sales team, with three to receive a 25 per cent increase.

Following the completion of payroll, Rae found that the salaries had not increased, and told one of the directors “I told you what was going to happen”, referencing a previous conversation in which he had threatened to leave if there were no salary increases.

Mr Rae was alleged to have said “I resign” but he disputed this. He phoned the following day to say that it was not his intention to resign and that he would be seeing his doctor and taking time off due to stress.

The judgement notes that Mr Rae’s decision was not in writing, which was a requirement of the firm. Despite there being a general rule that once an employee has spoken ‘unequivocal and unambiguous’ words of resignation an employer can accept the resignation, there are certain instances in which these words cannot be relied on.

Judge Nicol Hosie said: “The claimant had worked with his two fellow directors for almost 30 years. They were aware of how strongly he felt about the salary increases. It was clear that he was very angry when he said and acted the way he did. He was not acting rationally.”

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Amanda Hyam

Amanda Hyam

Associate – Dispute Resolution / Employment
I have specialised in Dispute Resolution, Civil Litigation and Employment law for more than 15 years.  I understand how daunting the prospect of litigation can be and because of this I am always available to discuss concerns.

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