Man talking to his boss

Should you give your employer the “give me a raise or I quit” ultimatum?

Norman Grosman|

If you find yourself thinking of giving your boss the old “Give me a raise or I quit” ultimatum, consider the following: are you prepared to keep your word?

A recent trial decision out of Nova Scotia (Kerr v. 2463103 Nova Scotia Ltd.) highlights how things can go wrong when an employee demands a pay raise, and either hints at quitting or expressly threatens to quit if the request is not met.

Not surprisingly, there was a significant difference between the evidence of Kerr, the plaintiff employee suing for wrongful dismissal, and that of the representatives of the employer, a company known as Valley Volkswagen. In dealing with the issues of reliability and credibility, the judge preferred the evidence of the employer.

The court found that Kerr gave a clear and unequivocal ultimatum to his employer to either give him a raise of $100 per week or he would quit. Kerr had also stated that he had another employment opportunity that would pay him more money. The court found that management warned him that his performance was substandard due to excess inventory and that consideration of a pay raise depended on his improved performance. Moreover, during the following three weeks, Kerr did not withdraw his ultimatum, and did not appear to take any steps to solve the inventory problem.

Mr. Kerr’s threat to resign was made in clear and unambiguous terms, and the court concluded that a reasonable person would have understood that Kerr was serious in his intention to resign and accept another job opportunity that would pay him more money if he was not given the demanded raise. Three weeks following the initial discussion and ultimatum, management told Kerr that it had no choice but to accept his resignation.

In reviewing the law of resignation, the Nova Scotia court turned to the Ontario Court of Appeal which has stated:

    “A resignation must be clear and unequivocal. To be clear and unequivocal, the resignation must objectively reflect an intention to resign, or conduct evidencing such an intention…

    Whether words or actions equate to resignation must be determined contextually. The surrounding circumstances are relevant to determine whether a reasonable person, viewing the matter objectively, would have understood [the employee] to have unequivocally resigned.”

This decision provides a clear warning to employees think it might be be a good idea to give their employer such an ultimatum. There is a very real possibility that the employer will seize the opportunity to accept the resignation, and ultimatum will backfire, both practically and legally.


Category: Employment Law,