Retiring worker changes mind too late

Worker thought she could rescind her retirement notice, but once employer accepted it there was no obligation to allow her to rescind it
By Jeffrey R. Smith
|Canadian Employment Law Today|Last Updated: 10/26/2018

An Ontario worker who thought she could change her mind about retiring and rescind her retirement notice is out of luck and out of a job.

Elisabeth English, 66, was a senior customer relationship manager for group savings and retirement at an Ontario branch of Standard Life, an insurance company based in Montreal, starting in March 2006. In 2015, Standard Life merged with another insurance company, Manulife Financial Corporation.

Soon after the merge, Manulife informed its employees that all of its customer information would be converted to a new computer system. The conversion would begin in January 2016 and progress over time until completed.

English was concerned the new computer system would be difficult for her to learn, so she met with her supervisor on Sept. 22, 2016, and told him she had decided to retire effective Dec. 31. She gave the supervisor a written notice of retirement that she had typed up herself that stated her planned retirement date and she would “entertain a part-time position, two or three days per week... but I understand if it is not (possible).”

English’s supervisor asked her if she was sure she wanted to retire and told her that she could rescind or reconsider her resignation if she changed her mind during the meeting, but English replied that she had had some doubts earlier, but had spoken to “a number of people” and she was now sure she wanted to retire. The supervisor informed the human resources department about the retirement notice and Manulife began to develop a plan to prepare for English’s retirement. The plan included eliminating her position, moving some of her subordinates to another office that needed more capacity, and distributing her caseload to other customer relationship managers in the region.

Over the next few days, English told some of her co-workers about her retirement plans and agreed to have her supervisor announce it at a staff meeting.

Company scrapped new computer system; worker changed her mind

Less than three weeks later, on Oct. 11, Manulife announced that it was suspending the computer data conversion indefinitely. As a result, English decided to withdraw her notice of retirement and asked her supervisor if anything had progressed with regards to it. On Oct. 26, she formally informed her supervisor that she was rescinding her notice of retirement because the computer conversion was no longer proceeding. Her supervisor acknowledged her wish, but was unable at the time to confirm anything.

The supervisor advised the human resources department about English’s request to rescind her retirement notice and advised it to respond. English didn’t follow up with any written communication to Manulife confirming her intentions.

After a series of back-and-forth communication between the supervisor and the human resources department, it was determined Manulife would continue to honour English’s notice of resignation. The supervisor informed English, who said she was surprised since she had been told she could “always rescind her notice of retirement if she changed her mind.” The supervisor responded by saying the company had accepted her retirement and would be honouring the request on Dec. 31.

English worked until Dec. 12, when Manulife told her she didn’t need to come back to work. She then filed a complaint for wrongful dismissal demanding payment of 16 months’ salary in lieu of notice. She argued that her supervisor told her she could rescind her retirement notice and her decision to retire was based on her not wanting to retrain for the announced computer conversion, which Manulife later suspended indefinitely.

Manulife argued that the notice of retirement was clear and unequivocal, English didn’t communicate the reason for her decision to rescind the notice, and it had already started staffing changes to prepare for her retirement.

The Ontario Superior Court of Justice found English’s letter of retirement was a clear and unequivocal notice of her decision to retire — she typed it up herself, she came to the meeting with her supervisor with the letter, and there was no evidence there was any persuasion for her to make the decision. The court also found that while the supervisor had told her she could rescind her notice of retirement while they were discussing it during the Sept. 22, 2016, meeting, English had responded by reiterating her decision. There was no indication the offer to rescind was valid up until her intended retirement date of Dec. 31, and the supervisor accepted her notice by the end of that meeting, said the court.

Employer didn't accept rescission of resignation

The court also found the supervisor did not indicate he accepted her rescission a few weeks later and English didn’t formally notify Manulife that she had changed her mind — which was important since the company had initiated plans to go into effect upon her retirement.

The court determined that English’s notice of retirement on Sept. 22, 2016, was a clear and unequivocal “offer by (English) to retire as an employee effective Dec. 31, 2016” and this offer was accepted by her supervisor. Once accepted, the offer became a binding contract between English and Manulife, the court said.

The court noted that Manulife could have allowed English to rescind her notice of retirement once she found out the computer conversion wasn’t going forward, but it wasn’t obligated to do so once it accepted her retirement offer; nor did it indicate it accepted her offer to rescind the notice. The company may have been silent in response to English’s verbal request, but “silence does not equate to acceptance,” said the court.

“(Manulife) could, perhaps, have handled the situation better, by advising (English) in mid- or late October that her notice of retirement was binding on her,” said the court. “There is, however, nothing in the evidence that would suggest that (Manulife) led (English) along to believe that her intention to resile had, in fact, been accepted by the (company).”

The court dismissed English’s complaint, finding the retirement agreement was binding and Manulife had no obligation to allow English to rescind it — nor did it take any action to indicate it accepted her intention to rescind it. The court also noted that had there been wrongful dismissal, English would be entitled to 12 months’ salary in lieu of notice, not the 16 months English wanted in her claim.

For more information see:

English v. Manulife Financial Corporation, 2018 CarswellOnt 14425 (Ont. S.C.J.).

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