After angrily storming out of a meeting - making a comment appearing to resign his position - a managing director has won his claim of unfair dismissal against a company he founded in 1990.

In December, the Employment Tribunal hearing the claim of Mr Robert S Rae v Wellhead Electrical Supplies Ltd were told that Mr Rae - as he left the meeting about employee’s pay - told his fellow directors, Mr Charles Ogg (Finance Director/Company Secretary) and Mr Greg Rastall, that he would not be back.

The tribunal heard that from early 2019, company employees repeatedly asked Mr Rae about salary increases as there had not been any since 2014, due to a downturn in business. As he was very much in favour of awarding increases - to ensure that valued members of staff were retained - he raised the issue on a number of occasions with his fellow directors, in particular Mr Ogg, the Finance Director.

On 7 March 2019, at a board meeting, a pay rise was agreed and Mr Rae was under the impression that - in addition to a general pay increase - Mr Rae’s son and a member of his sales team would be given a higher pay rise.

The tribunal were told that, in previous informal discussions, Mr Rae had threatened to resign if the proposed pay increases did not go through.

After the pay rise agreement, Mr Rae informed the two employees about their expected increase, but this was not reflected in their next pay cheques. Mr Rae was devastated and embarrassed by this.  

On 21 March, Mr Rae followed up the matter with Mr Ogg and, on asking Mr Ogg if the higher pay increase had gone through he was told that it had not. The tribunal heard that Mr Rae then threw his keys on Mr Ogg’s desk and shouted, “I told you what was going to happen. I won’t be back.” Mr Ogg reported that Mr Rae also said, “I resign” - which was disputed by Mr Rae. However, Mr Rae did agree that he stated to Mr Rastall, “I think I have just resigned” or words to that effect.

Two hours later, an emergency board meeting was held and it was agreed to accept Mr Rae’s resignation. Minutes were taken at the meeting - which stated, “Mr Rae’s actions were a direct result of three previous threats to resign should his son Mark and assistant Yvonne not be given payroll increases out with the current salary scale structure.”

When cross-examined about this, Mr Ogg agreed that there had only been two other occasions and that the word ‘resignation’ had not been used but that what Mr Rae had stated amounted to that. The minutes also recorded that both the other directors agreed to accept Mr Rae’s remarks as his resignation, due to his hostile attitude at the last board meeting.

The following day, Mr Rae telephoned the company to say that he was going to the doctor that day as he was suffering from stress and would return when he was better. He spoke to Mr Rastall who, Mr Rae alleged swore at him – which the employment judge accepted because Mr Rastall had told the tribunal that he was “quite happy with Rab resigning”. The judge had already put on record that Mr Rae gave his evidence at the tribunal “in a measured, consistent and convincing manner”, presenting as credible and reliable.

Mr Rae saw a doctor that day and was signed off work until 5 April, but he did not return to work. Mr Rastall did not reply to Mr Rae’s message, sending him a letter the same day saying that the company had accepted his resignation.

When Mr Rae disputed this, he received another letter telling him he was no longer a director at Wellhead and warned him not to interfere with any future company business or communicate with any staff members. He then received his P45.  

The tribunal accepted that on the day Mr Rae walked out, his actions “amounted to an apparently unambiguous resignation” but in the circumstances in which it had happened, the company should have given more thought before ending Mr Rae’s employment. They stated that “it would be normal practice for someone in a senior position to resign by giving written notice”. It was also noted that when a former director of Wellhead resigned in 2011, he was allocated a ‘cooling off’ period.

The tribunal stated that “the directors were blinkered by an overwhelming desire to ensure that the claimant would not be allowed to return to work, in any circumstances, and that no explanation whatsoever from him for his conduct - even though it was unprecedented in some thirty years - would be accepted.”

Paul Holcroft - associate director at Croner - commented:

“Tempers can flare in the workplace, and it is advisable in these circumstances to give the employee time to calm down, contact them later, and get them to confirm in writing that they do wish to resign.”

Thalis Vlachos - employment law partner at Gunnercooke - said:

“The danger point for the employer is that if they then do not allow that person to retract their resignation, then they've followed no procedure. It's then considered a dismissal and they then face an employment tribunal claim, as in this case.”

No settlement has yet been agreed.