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Resignation


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Introduction

Even during these difficult economic times, resignation rates are on the increase. In the last year resignations have risen from 1.8 to 2%, showing that there is still some level of movement within the labour market. 

Although not always welcomed by managers, resignations do allow a company the opportunity to review the current organisation structure, working practices and skills needed for particular roles. 

To ensure that the resignation process runs smoothly, make sure that you follow a few key steps.  Look to understand why the employee has decided to resign. If it’s a key employee you may wish to look to see if you are able to change their mind! If it’s a resignation that you have been hoping for for some time, act professionally throughout the exit process, and don’t celebrate the employee’s decision to leave! 

Once an employee has decided to leave your organisation you will need to assess if there is any risk to the employee working their notice. If they are leaving to work with a competitor you may not wish them to work their notice and offer payment instead, or you may consider placing them on garden leave. You will need to consider what approach you will take based on the risks involved. Where someone leaves with immediate effect, it often means you need an immediate replacement. You need to consider what effect that will have on the business and the morale of the remaining employees. 

Although a verbal resignation is acceptable, always try and get the employee to confirm their resignation in writing. This way it corroborates both parties’ understanding of when the actual resignation date is, and this will help you calculate when the notice period needs to commence.

Acknowledge the resignation

Once the employee has tendered their resignation you need to respond to this, confirming to the employee that you have accepted their decision to resign. Outline their notice period to them and that they will or will not be required to work it. Where you have decided that the employee is not required to work their notice period you will be required to make a payment in lieu of the contractual notice that they are entitled to. You should ensure that the employment contract allows you to make payment in lieu of the notice period prior to confirming this to the employee. 

In your acknowledgement letter confirm to the employee the process for handing in any company equipment, confirm any accrued outstanding holiday and if they are required to take this or will be paid for it, and outline to them when any final payments are due to be made, for example a bonus or commission that is due. 

Where it is appropriate you may wish to outline in the letter any handover that is required in light of outstanding projects, work or client commitments. In this way it focuses the employee’s attention on the areas that need to be closed off before they leave your organisation. 

Take the opportunity to confirm in writing the hard work and commitment that they have given to the organisation, and thank them for it.

Rescinding resignations

There is the odd occasion where an employee will submit their resignation and then look to rescind it. This could be down to any number of reasons, for example the next job opportunity may have fallen through or there may have been a change in personal circumstances. Whatever the reason, once an employee has submitted their resignation it cannot be rescinded without the employer’s agreement. There is only one exception to this, and that is where the resignation has been offered in the heat of the moment. 

Other than this one exclusion, employers are not legally bound to accept an employee who wishes to claim their job back. Employers may wish to consider requests and look at the previous service of the employee and consider whether or not they would be a loss to the organisation and then make their decision accordingly. 

Heat of the moment 

Dealing with resignations that occur after conflict within the office, or where an employee has undue pressures at home that lead them to make knee jerk decisions, can be tricky. Where a resignation has occurred after a heated discussion within the workplace, allow the employee some time to cool off and think seriously about their decision to resign. Often a little time away from the situation will ensure that the employee gives consideration to their actions and thinks through the consequences of their immediate resignation. The employee often concludes that resignation is not the route that they want to consider and in these instances you can allow them to rescind their resignation. 

Ambiguous resignations 

There may be a situation in the workplace where tempers flare and an employee is heard to shout, “That’s it, I’ve had it with this place!” and off they flounce. On the face of it, have they resigned? In such instances the resignation can be ambiguous and rather than make an assumption you should follow up in writing to confirm if the employee wishes you to accept their comments as a verbal resignation, and, as stated above, you should look to ask them to confirm their intention in writing. 

If the employee states that it is not the case you should then expect them to return to work forthwith.

Resignations during a disciplinary process

It is sometimes the situation where you commence the disciplinary process against any employee and during this they decide to resign from your organisation. Do you have to cease the disciplinary process that has already started? 

Where the employee still has a notice period to serve you can look to conclude the disciplinary process during their notice period. They are still employed by the organisation during this time so you are within your rights to look to conclude the hearing and apply the appropriate sanction.   

Where the disciplinary outcome is to dismiss on the grounds of gross misconduct you would apply this sanction and it would supersede any resignation. Therefore the employee would have been dismissed rather than resigned.

Resignations and constructive dismissal

Where an organisation has looked to make fundamental changes to an employee’s contractual benefits without their agreement, for example, removal of a bonus or commission scheme, or a reduction in salary, an employee could exercise their right to resign from the organisation. 

Where an employee resigns under this situation they could claim constructive dismissal, as through the actions of the employer there has been a fundamental breach of their employment contract. 

Other examples that would constitute constructive dismissal would be where the employer has failed to provide a safe working environment or where the employee has been forced to relocate to a different location and there is no contractual provision to do this.

Having outlined the risks of constructive dismissal, this does not mean to say that employers are not able to change an employee’s employment contract.  But to do so they should consult regarding the change, the change should have come about due to a significant business reason, and most importantly they should look to gain the employees’ agreement to the contractual change. Failure to do so, where the change is implemented, could give rise to claims of constructive dismissal.

Non acceptance of TUPE transfers

Where a TUPE (Transfer of Undertakings (Protection of Employment) Regulations) situation occurs an employee may assert that they do not wish to transfer to the new employer.   

Under TUPE, all employees in the business entity, who are subject to the transfer, automatically move across to the new employer on their existing employment terms and conditions.   

During the TUPE consultations an employee may raise objections to the transfer that is taking place. In most cases any objections can be discussed and settled during the consultation process. However, there are some situations where this is not the case and the employee may refuse to transfer. Where this occurs the employee is deemed to have resigned from the organisation effective from the date of the transfer. There is no dismissal, no redundancy and no obligation on the new employer to enforce the transfer of their contract. The role still exists with the new employer under the same employment terms and conditions, it has become the employee’s choice not to follow the transfer and therefore it is deemed that they have resigned.

Leaver’s checklist

Once you have received and accepted an employee’s resignation there are a number of areas that you need to ensure are followed from an administrative perspective so that your own systems and procedures are closed properly and there is no risk to the organisation. 

These can include such areas as: 

  • Removal from your organisation’s IT systems;
  • Calculating final payments and raising a P45;
  • Conducting an exit interview;
  • Arranging the return of all company equipment, security passes, laptops, etc.; and
  • Cancelling fuel cards and mobile phone contracts.

Finally, where appropriate, you may wish to organise a leaving party or gift to thank the employee for their commitment and service to your organisation. 

Once you have reviewed your leaver’s arrangements, consider if you need a replacement in the role. Take the opportunity to look at the organisation’s structure – are the same key skills required and have the duties changed?  A resignation is a great chance to review exactly what your business needs, rather than replace like for like.

Key points

  • Make sure that the employee’s resignation is confirmed in writing.
  • Do ensure that you acknowledge in writing their resignation.
  • Understand the reasons why the employee is leaving.
  • Be clear about the notice period of the employee who is leaving, whether they have provided you with right length of notice, and if you need them to work their notice.
  • Ensure all company property is returned and any work is handed over promptly.

Legislation

  • Employment Rights Act 1996.

Sources of further information

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Author

Suzanne McMinn
Suzanne McMinn More information

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