A New Jersey court decided a former employee is entitled to unemployment benefits regardless of whether he was asked to resign or was fired. The decision reversed the state's highest review board for unemployment benefit decisions, like wrongful termination and at-will employment, in the Department of Labor.
The case could have far-reaching effects, including how employers choose to terminate at-will employees. The decision may also lead to an increase in unemployment benefit claims, because even employees that resigned may be eligible.
The court, a panel of New Jersey Superior Court judges, believed there was no difference between firing and requesting resignation. "Even if the employer's action was fully justified from a business standpoint, the fact remains that appellant's separation from his job was employer, rather than employee, initiated," the court said.
The employee in the case was asked to resign, effective immediately, after he was unable to go to work for three days because of car problems. The Board of Review found that the employee, not the employer, was responsible for the termin ation in employment.
According to the review, the employee failed to arrive at work, thus ending the employment. Generally, unemployment benefits are only available for those who lose their employment position through no fault of their own.
However, the employee in this case will receive unemployment benefits because he was asked to resign, effective immediately. If fired, the worker may not have been eligible for unemployment because there was "cause" for the termination. Baseline eligibility for unemployment requires an employee to have worked 20 weeks or have earned $7,300.
The decision gives employers one more consideration when firing an employee. Before this case, requesting a resignation would preclude unemployment benefits but that distinction is now gone. Employers have a strong interest in who receives unemployment benefits because they fund the program through taxes. An experienced employment law attorney can help create sound human resource employment policies to avoid employment litigation.
Source: NJ.com, " Involuntary resignation at issue in employment court decision," Elliot Caroom, April 15, 2012