Is Saying “I Quit” In The Heat Of The Moment An Effective Resignation?

When tensions arise in the workplace, it is not uncommon for an employee to say the words, “I quit”, or otherwise indicate they intend to part ways with their employer. Often enough, the employee does not intend to resign, but in what circumstances can their reaction be considered at law to be an effective resignation?

The recent decision of Hong v Green Drake Pty Ltd as Trustee for the Grey Unit Trust t/as Grey Farming [2026] FWC 1934 is a reminder that a statement presumably conveying an intention to quit may not be legally binding, particularly if conveyed under certain circumstances. There remains a burden on employers to clarify an employee’s true intentions before treating the employee’s reaction as a resignation and finalising a termination of employment.

The Mutual Mistake

The facts in Hong v Green Drake Pty Ltd as Trustee for the Grey Unit Trust t/as Grey Farming [2026] FWC 1934, in summary form, are as follows.

A long-term farm hand, Mr Hong, found himself in a distressed state following a heated discussion with his employer, Mr Grey, regarding his family’s business plans and his mental health.

When Mr Hong visited the farm to request sick leave from Mr Grey, Mr Grey asked Mr Hong if it was his intention to continue working at the farm. Mr Hong responded with words to the effect of, “no”.

A critical issue before the Fair Work Commission was assessing whether, at law, Mr Hong’s conduct amounted to him resigning. Did his conduct repudiate the employment relationship?

The Fair Work Commission considered both Mr Grey’s and Mr Hong’s evidence, and it was determined that:

1. Mr Grey was asking if Mr Hong intended to continue in his employment at all; and
2. Mr Hong understood Mr Grey to be asking of his intention to attend work that specific day.

Mr Grey subsequently asked Mr Hong to collect his belongings and sent him home.

Commissioner McKinnon characterised the situation as one of “mutual mistake”. Despite Mr Grey’s belief that a resignation had occurred, Commissioner McKinnon found that the employment ended at the employer’s initiative under s 386(1)(a) of the Fair Work Act 2009 (Cth) (the Act) because Mr Grey failed to clarify Mr Hong’s intentions after a reasonable time had passed.

Objective test for resignation

Commissioner McKinnon’s approach is a reminder of the objective test applied by the Commission when assessing whether an employee has, at law, resigned. The objective test (i.e., a test not based on the “subjective” belief of the employer) for resignation applied in Hong was drawn from the Federal Court decision of Koutalis v Pollett [2015] FCA 1165. In that case, the Court clarified that whether a resignation has occurred does not depend upon the subjective intentions or understandings of the employer or employee.

Instead, the legal inquiry focuses on what a reasonable person in the position of the parties would have understood the objective position to be, based on the words spoken and the conduct of each party in light of the surrounding circumstances.

The Bupa Test: two paths to dismissal

In assessing whether a dismissal has occurred under s.386(1) of the Act, Commissioner McKinnon considered the framework established by the Full Bench in Bupa Aged Care Australia Pty Ltd v Shahin Tavassoli [2017] FWCFB 3941. At paragraph [47] of the Bupa decision, the Full Bench summarised two distinct limbs of dismissal:

1. Termination at the employer’s initiative, where a resignation is legally ineffective because it was expressed in the “heat of the moment” or a state of emotional stress or mental confusion such that the employee could not reasonably be understood to be conveying a real intention to resign.
2. Forced resignation, where the employer’s conduct was intended to bring the employment to an end, or where termination was the probable result, leaving the employee with “no effective or real choice but to resign”.

In Hong, Commissioner McKinnon applied the first limb. It was found that while Mr Grey’s interpretation of Mr Hong’s words was not necessarily unreasonable, the circumstances of the exchange meant the resignation was not legally effective.

What this case reinforces for employers and employees

Hong reinforces several critical principles regarding the termination of the employment relationship:

1. Whether a resignation occurred depends not on the parties’ subjective intentions, but on what a reasonable person in the position of the parties would have understood based on the words, conduct, and surrounding circumstances.
2. If an employee is visibly distressed, suffering from mental health issues, or facing a language barrier, an employer generally ought to undertake further inquiry to determine whether resignation was truly intended by the employee.
3. If an employer simply treats a “heat of the moment” resignation as conclusive evidence that the employee has resigned without waiting a reasonable time to confirm the purported resignation’s validity, they run the risk that the action will be characterised as a termination at their initiative.
4. Clear language is important to avoid confusion.

Employers should exercise caution when an employee resigns in tense situations, such as when a state of high emotion is at play. Equally, employees should remember that comments they might make in the “heat of the moment” are not necessarily terminal to their employment relationship. Before processing final pay or directing an employee to leave the premises, it is advisable to allow a period of time to pass and then seek written confirmation of the employee’s intent to resign. Failing to do so, even in the absence of an intent to dismiss, can lead to a finding of dismissal and commencement of unfair dismissal or other similar proceedings by the employee.