Case in Focus – Wellhead Electrical Supplies Ltd

scale of justice

Robert S Rae v Wellhead Electrical Supplies Limited

What happened?

In early 2019, Robert Rae, founder and former Managing Director of Wellhead Electrical Supplies, proposed a 5% general pay increase for company employees and a higher pay increase for his son and a member of his team. When these proposals were discussed in a board meeting on 7 March 2019, Mr Rae believed they’d been accepted and informed his son and the member of his team of their salary increase. Awkwardly, other directors, Mr Ogg and Mr Rastall, submitted that only the 5% general increase was agreed.

At a meeting on 21 March, Mr Rae threw his keys on Mr Ogg’s desk and shouted, ‘I told you what was going to happen’. On his way out he said, “I won’t be back.” To Mr Rastall he commented: “I believe I’ve just resigned.” Two hours later, at an emergency board meeting, the directors unanimously agreed to accept this. On the next morning, Mr Rae called to undo his resignation, saying that his actions were the result of stress.

On 22 March, Mr Rastall wrote to Mr Rae, stating “the company has accepted your resignation and does not accept that you have simply chosen to take time off.” Mr Rae responded that his actions were in the “heat of the moment” without any real intention of resigning. In a letter sent on 25 March, Mr Rastall told Mr Rae he no longer worked for the company and should not communicate with any staff regarding the business. A P45 followed.

The Hearings

The Employment Tribunal found several “special circumstances” that could justify the finding that there was no resignation, for example Mr Rae had been very angry and acted in the “heat of the moment”; he was suffering from stress; and someone in a senior position would be expected to resign in writing. The ET believed it would have been clear how upset Mr Rae was at the meeting. The directors’ quick acceptance of his resignation was motivated by their “desire to rid themselves” of him. In 2011, the ET noted, a previous director was given a cooling off period after submitting a resignation. Therefore, the ET concluded it was unreasonable for the directors to assume Mr Rae really intended to resign and accept his resignation so quickly. Mr Rastall’s further communications, telling Mr Rae he no longer worked for the company, amounted to a dismissal. Since no fair reason was given for the dismissal, the ET found Mr Rae was dismissed unfairly,

Take-away points

  • Employers should be cautious about accepting resignations too quickly, especially when an employee is clearly acting in the heat of the moment. A hastily accepted resignation may in fact be a dismissal and, if no procedure is followed, could result in unfair dismissal.
  • You should always seek HR support if you are unsure about something, it is much better to get the process correct, saving further issues down the line.

Nicholsons offer a comprehensive outsourced HR service, so if you want to discuss your business needs, get in touch.

Posted in Blog, HR.