09 July 2019

For business owners, employees come and go all the time. However, you must manage the process for resignations correctly. For example, providing the correct final pay and notice period.

Failure to carry out your legal obligations can lead to a claim being raised against you. Make sure you make it clear to your employees to provide resignations in writing.

In this guide, we'll discuss what a resignation is, what to do when you receive a resignation, and your legal obligations.

What is resignation?

Resignation is when an employee chooses to end their employment contract and stops working for their job.

It’s also known as ‘handing your notice in’ or ‘quitting your job’. And unfortunately, resignations are common in the workplace. As an employer, you must understand why employees choose to quit their job.

Examples of why employees resign from their job

Employees resign from their job for a number of reasons. For example:

  • Starting a new job.
  • Learning skills under a new employer.
  • Taking a break from work.
  • Starting retirement.
  • Personal circumstances, like having a baby.
  • Facing job dissatisfaction.

To successfully manage resignations, you must know how an employer should respond to a resignation.

How should you respond to a resignation?

As an employer, you don’t always have to accept resignations. But it can prove difficult if an employee wants to leave.

Once an employee has mentioned their choice to leave, set up an in-person meeting to discuss their next steps. This will help to ensure the employment ends on a positive note.

Employees are often nervous about handing their notice to their employer. So, hold a meeting to make them feel at ease.

Remember, you can ask employees to reconsider their decision. But avoid telling them they’re making a bad choice.

An image of a person working.

How to manage an employee resigning from their job

All employees must fully understand what the requirements are when thinking about resignations.

It's important to include the process in employment contracts. This will help anyone who wishes to submit their resignation.

Here are ways to manage an employee resigning from their job:

Present a resignation letter

When an employee resigns from their job, they need to present a resignation letter. The letter formalises their decision for leaving; and should be submitted in print or as an email.

A resignation letter should include:

  • The date the letter is being handed in.
  • Their reasons behind their decision for resignation.
  • When their expected last day of work will be.

Make staff aware it's good practice to submit their resignations through written form. Although it isn't a legal requirement, it can stand as evidence in future hearings.

Outline their notice period

As an employer, it's vital you understand how to manage employees leaving their job this way. That’s why you need to outline appropriate notice periods.

Statutory notice period is calculated in this format:

  1. If the employee has worked for less than a month: No notice.
  2. If the employee has worked for one month or more: One week's notice.

All employees must know how much notice they need to provide before leaving. You might have timeframes added within their contracts. So, it’s important they follow the terms to avoid contract breaches and business disruptions.

Offer final pay and benefits

An employee's final pay and benefits must be paid before they leave their role. Final payments can include:

  • Salary and wages.
  • Commission or performance-based bonuses.
  • Pay for accrued holiday.

An office with employees.

Can a resignation letter be withdrawn?

In normal circumstances, once a notice has been handed in, it cannot be withdrawn.

However, you can agree to them being allowed to withdraw their resignation letter. This is entirely to your discretion, but it’s better to add this to employment contracts, handbooks, and policies.

Can you force an employee to resign?

If an employee is forced to resign due to their your actions, they may claim constructive dismissal. Avoid should never force employees to resign, as this is against employment law.

Constructive dismissal claims are heard in employment tribunals. Here, if you’re found guilty, you could face monetary fines and reputational damages.

What happens if an employee refuses their notice during resignation?

Employees don't have to work their notice during resignation is both parties agree. However, immediately ending an employment after resignation requires certain means.

For example, you need to ensure they receive end-of-employment contractual benefits, like final salary, PILON, and accrued holiday pay.

Get expert advice on resignations with Peninsula

Over time, employees will choose to leave your company. This could be down to job unhappiness or personal circumstances. But how you deal with resignations is highly important.

As an employer, you must meet legal contract requirements. For example, ensuring they receive the correct amount of final pay. Failure to act lawfully during this process may lead to a claim being made against you.

Peninsula offers 24/7 HR advice which is available 365 days a year. We take care of everything when you work with our HR experts. Want to find out more? Contact us on 0800 051 3687 and book a free consultation with one of our HR consultants.

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