How to respond to an employee’s resignation

Staff come and go. How you deal with employees resigning is important. Failure to provide the correct notice period or the correct pay may lead to a claim being made against you.

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

What does resignation mean?

Resignation is the act of formally giving up a job or position, typically involving a formal notice to the employer and a specified period of notice before leaving. It's also known as ‘handing in your notice’ or ‘quitting your job’.

As an employer, it's important to understand the reasons why someone may choose to submit their resignation.

There are a few reasons why people resign from their jobs. For example:

• Job unhappiness

• Found a new job or trying a new career path

• A change in individual circumstances, such as caring for a family member

• Conflict with a colleague or manager

How should an employee resign?

As an employer, you should make the process for resigning clear.

Encourage your employees to write a letter if they want to leave their job. A written resignation letter is more formal, creates a record, and helps to assure there's no confusion on when their resignation needs to be handed in.

What should be included in a resignation letter?

Employees need to ensure they include all the relevant details within a resignation letter. Include this list in their employee handbook so they know what is most important.

For example, the letter should:

• Clearly state their decision to resign

• State how much notice they are giving (this should be highlighted in their contract)

• When their last day at work will be

Receiving a resignation in writing will ensure you know the last day for which they must be paid.

How should an employer respond to a resignation?

Once a resignation letter has been submitted, you should aim to promptly set up a meeting. This allows you to discuss their reasons for leaving and ensuring no hard feelings between both parties. After all, you may need their support in completing a handover of their work over to a colleague when they leave.

During the discussion, explain to the employee that you expect them to work with full dedication up until their last day of work.

Can an employee take back their resignation?

Once a letter has been handed in, it cannot be taken back. The only way it can be retracted is if the employer agrees or the employment contract makes it possible.

What is the notice period for resignations?

Your employee’s employment contract should highlight the notice period for when someone resigns. For example, you may require one month’s notice to hire a replacement.

So, if you have employees who want to leave, they must check their notice period before handing in their resignation.

It's important to remember that whilst staff are working off their notice, you must pay them as you normally would.

Does an employee have to work their notice period?

Following a member of staff handing in their notice and resigning, you may want to end their employment contract immediately. To do this, you must pay them payment in lieu of notice (PILON). This must be included within their employment contract.

Payment in lieu of notice is a financial cost calculated from:

1. Salary

2. Any other contractual benefits, for example accrued holiday pay

You may also choose to send an employee on garden leave during their notice period. If this is the case, you must have included a garden leave clause in their contract at the start of their employment.

What should be included in an employee's final pay?

When it reaches the last day of an employee’s notice period, you should provide them with their final pay and an outlined breakdown of what they’re receiving.

Make sure employees are paid:

• Wages and salary

• Any bonuses or overtime payments

• Payment for any annual leave or holiday accrued

An employee's final paid amount is also affected by how much holiday has been taken throughout the year before the resignation. If they have gone over their statutory holiday entitlement, this may be deducted from their final pay.

You may also deduct money from the final pay for loans or training courses. It's also advised to have written details of every financial benefit provided on their last day or leading weeks.

What happens if you force someone to resign?

Resignation should never be forced. It is completely against employment law to make employees feel like they were forced to resign.

If this is the case, they may file a constructive dismissal claim against you.

Manage employee resignations with ease with the support of BrigthHR

Employees will leave your company from time to time, but how you deal with someone resigning is important.

As an employer, you must meet legal contract requirements like their notice period or official last day or weeks. Failure to act lawfully during this process may lead to a claim being made against you.

BrightHR helps you manage your resignation process with ease. For case-by-case advice, our employment relations experts are on hand 24/7 to answer your burning questions.

Book in a free product demo or give us a call on 1 300 029 198.