A GUIDE TO A GUIDE TO RESIGNATION Resignation Resignation is where an employee decides to terminate a contract by resigning in a similar way to an employer terminating a contract by dismissal. Resignation and dismissal are unilateral decisions. In other words, they are taken exclusively by one party: the employee in the case of resignation, and the employer in the case of a dismissal. It is usual for a resignation to be in the form of a resignation letter, although there are times when a resignation may be verbal and sometimes in the heat of the moment. It is possible for verbal resignations to be withdrawn as long as it is done so very quickly. It is a good idea to find out early on the reason for the resignation, particularly where you want to retain the employee. It may be possible to prevent the resignation by changing terms and conditions egg working hours, responsibilities etc. It is good practice to acknowledge a resignation in writing on its receipt. This is a good opportunity to confirm the employee’s notice period, and the expected last day of work, as well as reminding him or her of any particularly relevant terms and conditions, such as confidentiality, that continue to apply. If an employee holds a position with regular contact with clients or access to business-sensitive information, and they are leaving to work for a competitor, it is good practice (if the contract allows this) to either: • • remove the employee from that role to work their notice elsewhere in the organisation send them home on “garden leave” for the duration of their notice period. Exit interviews It is good practice to carry out an exit interview with all leavers to establish the reason behind their resignation. In order to gain the most out of such interviews it is better for a neutral person to conduct the interview, e.g. a Trustee or someone other than the line manager. Constructive dismissal If the employee can show that the employer has breached the contract, and he or she was “forced” to resign as a result of that breach, this is known as constructive dismissal. In order to claim constructive dismissal, an employee must show that four requirements have been met: 1. The employer must have breached a fundamental term of the contract or indicated that such a breach was going to happen. The breach can be of an express or implied term, for example unilaterally changing terms and conditions of employment such as hours of work or pay, or failing to protect an employee from harassment in the workplace. 2. The breach must be serious enough to repudiate the contract. Group Development Resources A GUIDE TO A GUIDE TO RESIGNATION 3. The employee must leave the employment quickly after the breach, because any delay would suggest that the breach wasn’t so bad after all, and that the employee had accepted it. 4. The reason the employee gives for leaving must be in response to the employer’s conduct. In cases of constructive dismissal the employee would usually leave immediately and not work their notice period. In order for the employee to take their claim of Constructive dismissal to an Employment Tribunal, they must have followed step one of the Statutory Grievance Procedure i.e. made a formal grievance in writing to their employer and waited 28 days for a response. Notice periods The contract of employment usually states the required notice period in the event of resignation. The Employment Rights Act 1996 (ERA) states that any employee who has at least one month’s continuity of employment must not give less than one week’s notice. In practice it is difficult to enforce such notice periods although an employer could pursue a breach of contract claim through the courts. In order to be successful the employer has to substantiate a loss that resulted from the employee’s failure to honour his or her notice period. A loss can be either difficult to establish or just not cost-effective to pursue. Garden leave If an employer decides that it does not want the employee to work his or her period of notice, a common approach is to send the employee home on “garden leave” and exclude him or her from the premises or from having any contact with other employees, customers or suppliers. During a period of “garden leave” the employee continues to receive all pay and benefits and is bound by both the express and implied terms of the contract. The contract of employment should be drafted to expressly provide for the employer to invoke a period of garden leave. Pay in lieu of notice Payments in lieu of notice can be used to pay an employee in preference to working his or her notice period. Any such payment will be taxed in the usual way. If there is no express clause in the contract, to impose a payment in lieu of notice may be regarded as a breach of contract. Termination by mutual agreement Contracts may also be terminated through mutual agreement, i.e. both parties agree to the contract’s ending and so releasing each other from its obligations. The employee’s consent must be genuine. It is a good idea to use a compromise agreement signed by both parties to seal mutual terminations. A binding compromise agreement is essential to prevent employees from pursuing unfair dismissal or any other claims in tribunal at a later date. Group Development Resources A GUIDE TO A GUIDE TO RESIGNATION Giving references Recent legislative decisions have resulted in a more cautious approach from people giving references. Generally all data given in a reference should be based on fact or capable of independent verification. As a guide, references should be fair, accurate and not give a misleading overall impression of the employee. Referees should be very cautious about giving any subjective opinion about an individual's performance, conduct or suitability, which they cannot substantiate with factual evidence. It is a good idea to have a standard format for references, detailing simple, factual information e.g. dates of employment, job title, job responsibilities and accountabilities. Example reference checklist for former employees • • • • • • • • • Who has the authority to give references – directors/managers/human resources? How are oral references, if any, to be recorded? Is there a bare minimum policy/job description, length of service, reason for leaving? Should more be included – details of abilities, performance, disciplinary record, attendance record, character strengths? Is the overall impression accurate, and not misleading or unfair? Has the employer avoided the inclusion of information that the employee does not know about? Has the employer avoided the revelation of spent criminal convictions? Has the fact that the employee complained about the employer’s discriminatory conduct been an issue? If so, has the employer avoided victimisation of the employee in the reference? Is the reference addressed to a named person only, and not ‘to whom it may concern’, and marked ‘addressee only’? (There is something known as a defence of qualified privilege in any defamation claim which will not apply if the reference is passed on to someone other than the addressee.) Group Development Resources