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What is a Wrongful or Forced Resignation

Whitten and Lublin | Nov 20, 2017

There is a major financial difference between getting fired by your employer and choosing to resign.  Simply put, most employees who are fired are entitled to severance packages, while employees who resign are not entitled to anything.  This gives employers a financial incentive to encourage employees to resign and this incentive sometimes results in employers mistreating or placing undue pressure on employees in an effort to have them resign.

This mistreatment can take many forms.  For example, some employers try to blow minor disciplinary issues out of proportion and suggest that they would be justified in firing an employee for cause (another situation where employees are entitled to nothing).  Knowing that employees are fearful of being fired for cause and the impact it would have on their reputation and reemploy, they offer the opportunity to resign (or sometimes retire) as a way for the employee to avoid reputational harm.

As another example, some employers fail to address workplace issues that make your work environment hostile, toxic or intolerable.  Rather than address the issues – many of which can trigger legal obligations for the employer under the Human Rights Code, Occupational Health and Safety Act, and other legal obligations – the employer either “waits you out” or actively encourages you to resign if you don’t like your workplace.

If you feel like you are being pressured to resign, resist the pressure, take your time to consider your options and seek legal advice.  Consider:

  1. Will it be helpful to document relevant conversations with your manager, co-workers and/or human resource departments?
  2. What will happen if you don’t resign? Will the company fire you?  If they will, were you guilty of any misconduct that was so serious that they can justify withholding your severance? (Hint: withholding severance is only appropriate in the very most serious instances of misconduct and depends on all of the surrounding circumstances)
  3. Are you able to negotiate a severance package despite the fact that this will be called a resignation? How about a positive reference letter?
  4. Do you have a back-up plan – another job offer, consulting work or a return to school?
  5. If you resign, will you forfeit an entitlement to collect Employment Insurance payments?

In some cases, courts will accept that an employee’s resignation was coerced and find that they were essentially being fired – this is known as constructive dismissal.  However, it is better to try resolve these issues before resigning.  In short, don’t let your employer bully or pressure you to resign without first understanding your rights and options, as doing so could cost you your severance.