Resignations: Will I Stay Or Will I Go?

When it comes to resignations, the facts matter and the decision of Nagpal v. IBM certainly proves it. In another notable case on resignations in Ontario, Schabas J. had to determine whether an employee's failure to return to the workplace after his disability benefits were denied amounted to voluntary resignation or abandonment of employment.

This case also deals with some interesting issues of when policies can be incorporated by reference but that is a topic for another day.

The Facts

The facts were relatively straight forward. Nagpal commenced employment with IBM in 1988. In January 2012 he was a promoted to a leadership position on two new projects. He experienced difficulties with one particular employee in his new position. Over the course of 2012 he began taking more absences and requesting additional support from his superiors in dealing with the problem employee. In January 2013, he received a poor performance evaluation. Nagpal's prior reviews had been excellent. He called in sick on March 14, 2013 and his doctor recommended he take 6 weeks off due to stress. Nagpal never returned to work.

Nagpal was initially approved for short-term disability benefits under a group plan with Manulife. The Policy paid 100% of benefits up to 26 weeks. The Policy stipulated that if benefits were denied, the employee had two options: Appeal or return to work. If an employee did not appeal, or return to work, the Policy deemed the employee to have voluntarily resigned their position.

Manulife denied ongoing STD benefits on July 19, 2013. Nagpal was advised of the option to appeal but was reportedly told there was no point if there was no further medical documentation available. He never appealed.

On July 22, the employer wrote to Nagpal advising he could either return to work or appeal the denial as per the Policy. On July 29, Nagpal obtained counsel who wrote to the employer advising Nagpal was not capable of returning to work and would consider an "exit package". This letter was ignored.

Over the next several months the employer maintained its position: return to work or consider your employment at an end. Nagpal's lawyer continued to maintain that he would return when medically cleared. Nagpal did not return to work. On October 9, 2013, the employer advised Nagpal that it considered his employment position to have been abandoned. Nagpal brought a claim for wrongful dismissal. The employer alleged he had voluntarily resigned/abandoned his position...